Exhibit 10.1

 

 

 

CREDIT AGREEMENT

 

Dated as of May 3, 2010

 

among

 

KKR FINANCIAL HOLDINGS LLC

 

and

 

THE SUBSIDIARIES OF

 

KKR FINANCIAL HOLDINGS LLC

 

PARTIES HERETO

 

as the Borrowers,

 

CITIBANK, N.A.,
as Administrative Agent

 

CITIBANK, N.A.,

as Swingline Lender and Issuing Bank

 

and

 

The Other Lenders Party Hereto

 

and

 

CITIGROUP GLOBAL MARKETS INC.,

as

Sole Lead Arranger and Sole Book Manager

 

and

 

BANK OF AMERICA, N.A.,

and

DEUTSCHE BANK AG NEW YORK BRANCH,

as Syndication Agents

 

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TABLE OF CONTENTS

Section

 

Page

 

 

 

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

 

1

1.01

Defined Terms

 

1

1.02

Other Interpretive Provisions

 

27

1.03

Accounting Terms

 

28

1.04

Rounding

 

28

1.05

Exchange Rates; Currency Equivalents

 

29

1.06

Times of Day

 

29

 

 

 

 

ARTICLE II. THE COMMITMENTS AND BORROWINGS

 

29

2.01

Revolving Loans

 

29

2.02

Borrowings, Conversions and Continuations of Revolving Loans

 

29

2.03

Swingline Loans

 

31

2.04

Letters of Credit

 

33

2.05

Prepayments

 

38

2.06

Termination or Reduction of Commitments

 

39

2.07

Repayment of Loans

 

39

2.08

Interest

 

39

2.09

Fees

 

40

2.10

Computation of Interest and Fees

 

41

2.11

Evidence of Debt

 

41

2.12

Payments Generally; Administrative Agent’s Clawback

 

42

2.13

Sharing of Payments by Lenders

 

43

2.14

Increase in Commitments

 

44

2.15

Concerning Joint and Several Liability of the Borrowers

 

45

2.16

Contribution

 

48

2.17

Collateral Security

 

48

2.18

Additional Borrowers

 

49

2.19

Defaulting Lender Provisions

 

49

 

 

 

 

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

 

52

3.01

Taxes

 

52

3.02

Illegality

 

54

3.03

Inability to Determine Rates

 

54

3.04

Increased Costs; Reserves on Eurodollar Loans

 

55

3.05

Compensation for Losses

 

56

3.06

Mitigation Obligations

 

57

3.07

Survival

 

57

 

 

 

 

ARTICLE IV. CONDITIONS PRECEDENT TO BORROWINGS

 

57

4.01

Conditions to Effectiveness

 

57

4.02

Conditions of Initial Borrowing

 

57

4.03

Conditions to all Borrowings

 

59

 

 

 

 

ARTICLE V. REPRESENTATIONS AND WARRANTIES

 

59

5.01

Existence, Qualification and Power

 

59

 

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5.02

Authorization; No Contravention

 

60

5.03

Governmental Authorization; Other Consents

 

60

5.04

Binding Effect

 

60

5.05

Financial Statements; No Material Adverse Effect

 

60

5.06

Litigation

 

61

5.07

No Default

 

61

5.08

Insurance

 

61

5.09

Taxes

 

61

5.10

ERISA Compliance

 

61

5.11

Properties

 

61

5.12

Investment Company Act

 

62

5.13

Disclosure

 

62

5.14

Compliance with Laws

 

62

5.15

Solvency

 

62

5.16

Borrowing Base Report

 

62

 

 

 

 

ARTICLE VI. AFFIRMATIVE COVENANTS

 

62

6.01

Financial Statements

 

62

6.02

Certificates; Other Information

 

63

6.03

Notices

 

65

6.04

Payment of Obligations

 

65

6.05

Preservation of Existence, Etc.

 

65

6.06

Maintenance of Properties

 

65

6.07

Maintenance of Insurance

 

65

6.08

Compliance with Laws

 

66

6.09

Books and Records

 

66

6.10

Inspection Rights

 

66

6.11

Audit Rights

 

66

6.12

Use of Proceeds

 

66

6.13

Investment Policies

 

66

6.14

Further Assurances

 

66

6.15

Portfolio Valuation and Diversification, Etc.

 

67

6.16

Calculation of Borrowing Base

 

68

 

 

 

 

ARTICLE VII. NEGATIVE COVENANTS

 

73

7.01

Liens

 

73

7.02

Investments

 

74

7.03

Indebtedness

 

74

7.04

Fundamental Changes

 

75

7.05

Dispositions

 

76

7.06

Restricted Payments

 

77

7.07

Transactions with Affiliates

 

77

7.08

Burdensome Agreements

 

77

7.09

Financial Covenants

 

78

7.10

Fiscal Year

 

79

7.11

Lines of Business

 

79

7.12

Margin Regulations; Securities Laws

 

79

 

 

 

 

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

 

79

8.01

Events of Default

 

79

8.02

Remedies Upon Event of Default

 

80

 

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8.03

Application of Funds

 

81

 

 

 

 

ARTICLE IX. ADMINISTRATIVE AGENT

 

81

9.01

Appointment and Authority

 

81

9.02

Rights as a Lender

 

82

9.03

Exculpatory Provisions

 

82

9.04

Reliance by Administrative Agent

 

83

9.05

Delegation of Duties

 

83

9.06

Resignation of Administrative Agent

 

83

9.07

Non-Reliance on Administrative Agent and Other Lenders

 

84

9.08

No Other Duties, Etc.

 

84

9.09

Administrative Agent May File Proofs of Claim

 

84

9.10

Collateral Matters

 

85

 

 

 

 

ARTICLE X. MISCELLANEOUS

 

85

10.01

Amendments, Etc.

 

85

10.02

Notices; Effectiveness; Electronic Communication

 

87

10.03

No Waiver; Cumulative Remedies

 

88

10.04

Expenses; Indemnity; Damage Waiver

 

88

10.05

Payments Set Aside

 

90

10.06

Successors and Assigns

 

91

10.07

Treatment of Certain Information; Confidentiality

 

94

10.08

Right of Setoff

 

95

10.09

Interest Rate Limitation

 

95

10.10

Counterparts; Integration; Effectiveness

 

96

10.11

Survival of Representations and Warranties

 

96

10.12

Severability

 

96

10.13

Replacement of Lenders

 

96

10.14

Governing Law; Jurisdiction; Etc.

 

97

10.15

No Advisory or Fiduciary Responsibility

 

98

10.16

U.S. PATRIOT Act Notice

 

99

10.17

Entire Agreement

 

99

10.18

Judgment Currency

 

99

 

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SCHEDULES

 

 

 

 

 

 

2.01

Commitments and Applicable Percentages

 

 

5.06

Litigation

 

 

7.01

Existing Liens

 

 

7.03

Existing Indebtedness

 

 

7.08

Burdensome Agreements

 

 

10.02

Administrative Agent’s Office; Certain Addresses for Notices

 

 

10.06

Processing and Recordation Fees

 

 

 

 

 

 

EXHIBITS

 

 

 

 

 

 

A

Form of Revolving Loan Notice

 

 

B

Form of Swingline Loan Notice

 

 

C

Form of Promissory Note

 

 

D

Form of Borrowing Base Report

 

 

E

Form of Compliance Certificate

 

 

F

Form of Assignment and Assumption

 

 

G-1

Form of Opinion of Simpson Thacher & Bartlett LLP

 

 

G-2

Form of Opinion of In-house General Counsel for the Borrowers

 

 

G-3

Form of Opinion of Maples and Calder

 

 

 

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (this “Agreement”) is entered into as of May 3, 2010,
among KKR FINANCIAL HOLDINGS LLC, a Delaware limited liability company (“KKR
Financial”); KKR FINANCIAL HOLDINGS II, LLC, a Delaware limited liability
company (“KKR Holdings II”); KKR FINANCIAL HOLDINGS III, LLC, a Delaware limited
liability company (“KKR Holdings III”); KKR FINANCIAL HOLDINGS, INC., a Delaware
corporation (“KKR Holdings”); KKR FINANCIAL HOLDINGS, LTD., a Cayman Islands
company (“KKR Holdings LTD”); KKR TRS HOLDINGS, LTD., a Cayman Islands company
(“KKR TRS LTD”); KKR FINANCIAL CLO 2009-1, LTD., a Cayman Islands company (“KKR
CLO 2009”); KFH III HOLDINGS LTD., a Cayman Islands company (“KFH III”); and any
other Borrower from time to time party hereto; each lender from time to time
party hereto (collectively, the “Lenders” and individually, a “Lender”);
CITIBANK, N.A., as Swingline Lender and Issuing Bank; and CITIBANK, N.A., as
Administrative Agent.

 

W I T N E S S E T H:

 

The Borrowers, the Lenders, the Administrative Agent, the Issuing Bank and the
Swingline Lender agree as follows:

 

ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS

 

1.01        DEFINED TERMS.  AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL
HAVE THE MEANINGS SET FORTH BELOW:

 

“Adjusted Consolidated Tangible Net Worth” means, as of any date of
determination, an amount equal to (a) the Consolidated Net Worth for KKR
Financial and its consolidated Subsidiaries (as of such date of determination,
and calculated without regard to any accumulated other comprehensive income or
loss), less (b) the Intangible Assets for KKR Financial and its consolidated
Subsidiaries (as of such date of determination), excluding accumulated other
comprehensive income or loss (a component of shareholders’ equity) plus
(c) Trust Preferred Indebtedness (as of such date of determination, but in no
event greater than $440,000,000).

 

“Adjusted Total Liabilities” means, as of any date of determination,
Consolidated Total Liabilities less (i) Non-Company VIE Liabilities and
(ii) Trust Preferred Indebtedness (as of such date of determination, but in no
event greater than $440,000,000).

 

“Administrative Agent” means Citibank, N.A. in its capacity as administrative
agent under any of the Loan Documents, or any successor administrative agent.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify to the
Borrowers and the Lenders.

 

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

 

“Affiliate” means, with respect to any 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

 

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specified; provided, however, that neither Maples Finance Limited nor any
special purpose companies for which it provides corporate administrative
services shall be deemed to be an affiliate of KKR TRS LTD.

 

“Affiliated Debt Fund” means any investment fund managed or advised by
Affiliates of Kohlberg Kravis Roberts & Co. L.P. that is a bona fide debt fund.

 

“Agent Parties” has the meaning specified in Section 10.02(c).

 

“Aggregate Commitments” means, collectively, all Commitments of all Lenders at
any time outstanding.

 

“Aggregate Commitment Amount” means the aggregate principal amount of the
Aggregate Commitments from time to time.  On the date hereof, the Aggregate
Commitment Amount equals $210,000,000.  The Aggregate Commitment Amount may be
increased to an amount up to $600,000,000 in accordance with Section 2.14.

 

“Agreement” means this Credit Agreement, as further amended, restated, extended,
supplemented or otherwise modified in writing from time to time.

 

“Allocable Amount” has the meaning specified in Section 2.16.

 

“Alternate Currency” means Euros, British Pounds Sterling, Canadian Dollars,
Australian Dollars and any other currency reasonably acceptable to the
Administrative Agent that is freely convertible into Dollars and readily
available in the London interbank market.

 

“Alternate Currency Equivalent” means, at any time, as to any amount denominated
in Dollars as of any date of determination, the equivalent amount thereof in the
applicable Alternate Currency as determined by the Administrative Agent at such
time on the basis of the Spot Rate (determined in respect of the most recent
Revaluation Date) for the purchase of such Alternate Currency with Dollars.

 

“Alternate Currency Loan” means each Loan denominated in an Alternate Currency.

 

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitment
Amount represented by such Lender’s Commitment at such time.  If the commitment
of each Lender to make Loans has been terminated pursuant to Section 8.02 or if
the Aggregate Commitments have expired, then the Applicable Percentage of each
Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments.  The
initial Applicable Percentage of each Lender is set forth opposite the name of
such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable.

 

“Applicable Rate” means a per annum rate equal to (a) 2.25%, in the case of Base
Rate Loans and (b) 3.25%, in the case of Eurodollar Loans.

 

“Applicable Time” means, with respect to any borrowings and payments in any
Alternate Currency, the local time in the place of settlement for such Alternate
Currency as may be determined by the Administrative Agent to be necessary for
timely settlement on the relevant date in accordance with normal banking
procedures in the place of payment.

 

“Approved Currency” means: (a) with respect to Base Rate Loans and Daily
Floating Eurodollar Loans, Dollars; (b) with respect to Fixed Period Eurodollar
Loans, each of Dollars, Euros, British Pounds

 

2

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Sterling, Canadian Dollars, Australian Dollars and any other Alternate Currency;
and (c) with respect to Specified Financial Assets, each of Dollars, Euros,
British Pounds Sterling, Canadian Dollars, Australian Dollars and Yen.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Arranger” means Citigroup Global Markets Inc., in its capacity as sole lead
arranger and sole book manager.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee with the consent of any party whose consent is
required by Section 10.06(b), and accepted by the Administrative Agent, in
substantially the form of Exhibit F or any other form approved by the
Administrative Agent.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

 

“Audited Financial Statements” means the audited consolidated balance sheet of
KKR Financial and its Subsidiaries for the fiscal year ended December 31, 2009,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of KKR Financial and its
Subsidiaries, including the notes thereto.

 

“Australian Dollars” means the lawful currency of Australia.

 

“Availability” shall mean, at any time, an amount equal to the Line Cap minus
the Total Revolving Credit Exposure.

 

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination
of the commitment of each Lender to make Loans pursuant to Section 8.02.

 

“Bank” means a financial institution that (i) has, or is part of a Consolidated
Group that has, at least $2.0 billion in capital, and is, or is an affiliate of
another entity within such Consolidated Group that is, regulated by the Office
of the Comptroller of the Currency, the Federal Reserve or the Office of Thrift
Supervision; or (ii) is, or is an affiliate of another entity within a
Consolidated Group that is, a registered broker/dealer under the Securities
Exchange Act of 1934, and has, or is part of a Consolidated Group that has, a
senior unsecured debt rating of at least A-/A3; provided, that an institution
that does not meet the criteria of clause (i) or clause (ii) above may
nonetheless be classified as a “Bank” on the following conditions: (x) the
Administrative Agent, in its sole discretion, exercised in a commercially
reasonable manner, which discretionary decision shall not be unreasonably
withheld or delayed, shall have expressly agreed to such classification, and
(y) the Value of all Eligible Specified Financial Assets that are Bank Loans
originated by such financial institution does not exceed $50 million (or such
greater amount as the

 

3

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Administrative Agent, in its sole discretion, exercised in a commercially
reasonable manner, may determine) at any time.

 

“Bank Loan” has the meaning specified in Section 6.16(b).

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Citibank, N.A. as
its “base rate” and (c) the Eurodollar Rate for loans with an Interest Period of
one (1) month in effect on such date plus 1%.  The “prime rate” is a rate set by
Citibank, N.A. based upon various factors including Citibank, N.A.’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in such rate announced by Citibank, N.A. shall
take effect at the opening of business on the day specified in the public
announcement of such change.

 

“Base Rate Loan” means a Loan that bears interest at a per annum rate equal to
the Base Rate plus the Applicable Rate.

 

“BBA LIBOR” has the meaning specified in the definition of “Daily Floating
Eurodollar Rate”.

 

“Borrowers” and “Borrower” means (i) each of KKR Financial, KKR Holdings II, KKR
Holdings III, KKR Holdings, KKR Holdings LTD, KKR TRS LTD, KKR CLO 2009 and KFH
III and (ii) any other direct or indirect wholly owned Subsidiary of KKR
Financial, reasonably acceptable to the Administrative Agent, that becomes party
to this Agreement by executing a joinder agreement in accordance with
Section 2.18.

 

“Borrowing” means (i) Revolving Loans of the same Interest Rate Type and
Currency Type, made, converted or continued on the same date and, in the case of
Fixed Period Eurodollar Loans, as to which a single Interest Period is in
effect, or (ii) Swingline Loans of the same duration, as applicable.

 

“Borrowing Base” has the meaning specified in Section 6.16(a).

 

“Borrowing Base Deficiency” means, at any date on which the same is determined,
the amount, if any, that (a) the amount of Total Revolving Credit Exposure as of
such date exceeds (b) the Borrowing Base as of such date.

 

“Borrowing Base Report” means a report signed by a Responsible Officer of each
of Borrowers, in substantially the form of Exhibit D hereto, delivered to the
Administrative Agent.

 

“Borrower Materials” has the meaning specified in Section 6.02.

 

“Bridge Loan” means debt financing with an original maturity of not more than
one (1) year with an expected repayment from a capital markets transaction.

 

“British Pounds Sterling” means the lawful currency of Great Britain.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office with respect to
Obligations denominated in Dollars is located and:

 

(a)           if such day relates to any interest rate settings as to a
Eurodollar Loan denominated in Dollars, any fundings, disbursements, settlements
and payments in

 

4

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Dollars in respect of any such Eurodollar Loan, or any other dealings in Dollars
to be carried out pursuant to this Agreement in respect of any such Eurodollar
Loan, means any such day on which dealings in deposits in Dollars are conducted
by and between banks in the London interbank Eurodollar market;

 

(b)           if such day relates to any interest rate settings as to a Fixed
Period Eurodollar Loan denominated in Euros, any fundings, disbursements,
settlements and payments in Euros in respect of any such Eurodollar Loan, or any
other dealings in Euros to be carried out pursuant to this Agreement in respect
of any such Eurodollar Rate Loan, means a TARGET Day;

 

(c)           if such day relates to any interest rate settings as to a Fixed
Period Eurodollar Loan denominated in an Approved Currency other than Dollars or
Euros, means any such day on which dealings in deposits in the relevant Approved
Currency are conducted by and between banks in the London or other applicable
offshore interbank market for such Approved Currency; and

 

(d)           if such day relates to any fundings, disbursements, settlements
and payments in an Approved Currency other than Dollars or Euros in respect of a
Fixed Period Eurodollar Loan denominated in a currency other than Dollars or
Euros, or any other dealings in any Approved Currency other than Dollars or
Euros to be carried out pursuant to this Agreement in respect of any such
Eurodollar Loan (other than any interest rate settings), means any such day on
which banks are open for foreign exchange business in the principal financial
center of the country of such Approved Currency.

 

“Canadian Dollars” means the lawful currency of Canada.

 

“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.

 

“Cash Collateralize” means, in respect of an obligation, to provide and pledge
(as a first priority perfected security interest) cash collateral in Dollars, at
a location and pursuant to documentation in form and substance reasonably
satisfactory to the Administrative Agent (and “Cash Collateralization” has a
corresponding meaning).

 

“Cash Equivalents” has the meaning specified in Section 6.16(b).

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

 

“Change of 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 SEC
thereunder as in effect on the date hereof), of Equity Interests representing
more than 50% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of KKR Financial; (b) occupation of a majority
of the seats (other than vacant seats) on the board of

 

5

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directors of KKR Financial by Persons who were neither (i) nominated by the
board of directors of KKR Financial nor (ii) appointed by directors so
nominated; or (c) the acquisition of direct or indirect Control of any Borrower
by any Person or group (within the meaning of the Securities Exchange Act of
1934 and the rules of the SEC thereunder as in effect on the date hereof) not in
Control of any such Borrower on the Closing Date. It is understood and agreed
that KKR Financial LLC does not Control KKR Financial solely for purposes of
this definition.

 

“CLO” means a special purpose entity managed by KKR Financial Advisors II, LLC
or its Affiliates that is formed for the purpose of securitizing corporate debt
instruments and of which at least one Person unaffiliated with KKR Financial
holds any of the issued and outstanding notes.

 

“Closing Date” means the earliest date on which each of the conditions precedent
set forth in Sections 4.01, 4.02 and 4.03 have either been satisfied or waived.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral” means the specific Eligible Specified Financial Assets and other
property, accounts, rights and interests of the Borrowers that are or are
intended to be subject to the Liens created by the Security Documents.  It is
understood and agreed that the Borrowers shall be permitted to replace, withdraw
or otherwise dispose of Collateral at any time for any reason so long as after
giving effect to any such replacement, withdrawal or disposition, the Borrowers
remain in compliance with each of the financial covenants set forth in
Section 7.09.  For the avoidance of doubt, Collateral shall include a first lien
pledge on the notes and common shares held by the Borrowers in the CLOs (other
than KKR CLO 2009).

 

“Collateral Agreement” means the Collateral Agency Agreement to be executed and
delivered in connection with this Agreement, among the Borrowers, the
Administrative Agent and the Custodian, as further amended, restated, extended,
supplemented or otherwise modified in writing from time to time, or such other
agreement (the terms of which will be substantially consistent with the existing
Collateral Agreement at such time, unless otherwise agreed by the Borrowers) in
replacement thereof as the Administrative Agent may require, with the consent of
the Borrowers, which consent shall not be unreasonably withheld or delayed.

 

“Commitment” means, as to each Lender, its obligation to (a) make Revolving
Loans to the Borrowers pursuant to Section 2.01 and (b) purchase participations
in Swingline Loans, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.

 

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

 

“Consolidated Group” means the collective group of affiliated entities that are
required, in accordance with GAAP, to issue consolidated financial statements.

 

“Consolidated Net Worth” means, as of any date of determination, the aggregate
sum of all amounts which would be included on a consolidated balance sheet of
KKR Financial and its Consolidated Subsidiaries under shareholders’ equity as of
such date in accordance with GAAP.

 

“Consolidated Total Assets” means, as of any date of determination, the sum of
(a) all assets (“consolidated balance sheet assets”) of KKR Financial and its
Subsidiaries determined on a consolidated

 

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basis in accordance with GAAP, plus (b) without duplication, all assets leased
by KKR Financial or any Subsidiary as lessee under any Synthetic Lease to the
extent that such assets would have been consolidated balance sheet assets had
the Synthetic Lease been treated for accounting purposes as a capital lease,
plus (c) without duplication, all proceeds of sold receivables in respect of
sales of (i) accounts or general intangibles for money due or to become due,
(ii) chattel paper, instruments or documents creating or evidencing a right to
payment of money or (iii) other receivables (collectively “receivables”),
whether pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Persons relating thereto
or a disposition of defaulted receivables for collection and not as a financing
arrangement, and together with any obligation of such Persons to pay any
discount, interest, fees, indemnities, penalties, recourse, expenses or other
amounts in connection therewith, to the extent that such receivables would have
been consolidated balance sheet assets had they not been sold.

 

“Consolidated Total Liabilities” means, as of any date of determination, all
liabilities of KKR Financial and its Subsidiaries determined on a consolidated
basis in accordance with GAAP and classified as such on the consolidated balance
sheet of KKR Financial and its Subsidiaries and, without duplication, all other
Indebtedness of KKR Financial and its Subsidiaries, whether or not so
classified; provided, that for purposes of this definition, in the case of a
Trust Preferred Securities Transaction of KKR Financial or any Subsidiary of KKR
Financial, only the Trust Preferred Indebtedness issued or incurred by KKR
Financial or any Subsidiary of KKR Financial in connection therewith, excluding
Trust Preferred Indebtedness relating solely to the common equity securities of
the applicable Trust Preferred Financing Vehicle, shall be included in
determining the liabilities and other Indebtedness of KKR Financial and its
Subsidiaries.  Notwithstanding the foregoing, Consolidated Total Liabilities
shall not include liabilities arising out of any Disposition by KKR Financial of
all of its residential real estate assets as contemplated by
Section 7.05(b) (i) that are nonrecourse to the Borrowers and (ii) are recorded
by KKR Financial based on required application of FAS 140 or FIN-46(R).

 

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

 

“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.

 

“Convertible Securities” has the meaning specified in Section 6.16(b).

 

“Currency Type” means, with respect to any Loan, its character based upon the
Approved Currency in which it was made and is repayable.

 

“Custodial Account” means the account established and maintained pursuant to the
Collateral Agreement in which Collateral will be deposited by the Borrowers and
pledged to the Administrative Agent and any demand deposit account established
and maintained in connection therewith.

 

“Custodian” means The Bank of New York Mellon or another institution selected by
the Administrative Agent with the consent of the Borrowers, which consent shall
not be unreasonably withheld or delayed.

 

“Daily Floating Eurodollar Loan” means a Loan that bears interest at a per annum
rate equal to the Daily Floating Eurodollar Rate plus the Applicable Rate.

 

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“Daily Floating Eurodollar Rate” means, for any day, a fluctuating rate per
annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to
time) at approximately 11:00 a.m. (London time) on such day (if such day is a
Business Day) or the immediately preceding Business Day (if such day is not a
Business Day), for deposits in the relevant Approved Currency with a term
equivalent to one (1) month.  If such rate is not available at such time for any
reason, then the “Daily Floating Eurodollar Rate” shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in the
relevant Approved Currency in Same Day Funds in the approximate amount of the
Daily Floating Eurodollar Loan being made, continued or converted by Citibank,
N.A. and with a term equivalent to one (1) month would be offered by Citibank,
N.A.’s London Branch to major banks in the London interbank eurodollar market
for such Approved Currency at their request at approximately 11:00 a.m. (London
time) on such day (if such day is a Business Day) or the immediately preceding
Business Day (if such day is not a Business Day).

 

“Debt Rating” means, as of any date, the rating that has been most recently
assigned (either publicly or privately, and including a “shadow” rating) by S&P
or Moody’s (or, if no such rating is available with respect to Rule 144A Debt
Securities only, NAIC), as the case may be, for either (i) any Eligible
Specified Financial Asset or (ii) if no such rating is available from any such
rating agency with respect to senior unsecured Bank Loans only, for a class of
non-credit enhanced long-term senior unsecured debt issued by the applicable
obligor of such senior unsecured Bank Loan.  For purposes of the foregoing,
(a) if only one of S&P or Moody’s (or, if no such rating is available with
respect to Rule 144A Debt Securities only, NAIC) shall have in effect a Debt
Rating, the Debt Rating for the purposes of this Agreement shall be determined
by reference to the available rating, (b) if more than one Debt Rating shall be
in effect, the Debt Rating for the purposes of this Agreement shall be
determined by reference to the lowest rating issued by S&P or Moody’s, (c) if
any Debt Rating established by S&P or Moody’s (or, if no such rating is
available with respect to Rule 144A Debt Securities only, NAIC) shall be changed
after the date of initial determination thereof hereunder or if any agency
establishes a Debt Rating for any Eligible Specified Financial Asset where,
previously, there was no Debt Rating, such new Debt Rating shall be effective,
subject to clause (b) above, as of the date on which such change is first
announced publicly or privately by the rating agency making such change or
issuing such rating, as applicable, and (d) if S&P or Moody’s (or, for Rule 144A
Debt Securities, NAIC) shall change the basis on which Debt Ratings are
established, each reference to the Debt Rating assigned by S&P or Moody’s (or,
for Rule 144A Debt Securities, NAIC), as the case may be, shall refer to the
then equivalent rating by S&P or Moody’s (or, for Rule 144A Debt Securities,
NAIC), as the case may be.

 

“Debt Securities” as used in the other definitions contained herein, means
securities evidencing debt obligations, including, without limitation,
certificates representing an interest in a trust, the principal assets of which
consist of debt obligations.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all
other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Default Rate” means, when used with respect to Obligations, (i) with respect to
Base Rate Loans, an interest rate equal to (A) the Base Rate plus (B) 2% per
annum; and (ii) with respect to a Eurodollar Loan, an interest rate equal to
(A) the interest rate (including any Applicable Rate) otherwise applicable to
such Eurodollar Loan plus (B) 2% per annum.

 

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“Defaulting Lender” means, at any time, a Lender (i) that has failed for three
or more Business Days to comply with its obligations under this Agreement to
make a Loan, make a payment to the Issuing Bank in respect of an LC Payment
and/or make a payment to the Swingline Lender in respect of a Swingline Loan
(each a “funding obligation”), (ii) that has notified the Administrative Agent,
or has stated publicly, that it will not comply with any such funding obligation
hereunder, or has defaulted on its funding obligations under any other loan
agreement or credit agreement or other financing agreement, (iii) that has, for
three or more Business Days, failed to confirm in writing to the Administrative
Agent, in response to a written request of the Administrative Agent, that it
will comply with its funding obligations hereunder, or (iv) in respect of which
a Lender Insolvency Event has occurred and is continuing, in the case of clauses
(i) through (iv) above unless the subject of a good faith dispute and such
Lender has notified the Administrative Agent in writing of such (provided that
neither the reallocation of funding obligations provided for in
Section 2.19(c) as a result of a Lender’s being a Defaulting Lender nor the
performance by Non-Defaulting Lenders of such reallocated funding obligations
will by themselves cause the relevant Defaulting Lender to become a
Non-Defaulting Lender).  Any determination that a Lender is a Defaulting Lender
under clauses (i) through (iv) above will be made by the Administrative Agent in
its reasonable discretion acting in good faith.  The Administrative Agent will
promptly send to all parties hereto a copy of any notice to the Borrowers
provided for in this definition.

 

“Delayed Draw Loan” means, as of any date, a term loan that has not yet been
fully funded.

 

“Delayed Draw Reserve” means, as of any date, an amount equal to the aggregate
amount of the respective Unfunded Delayed Draw Amounts for each Delayed Draw
Loan that is a Specified Financial Asset as of such date.

 

“Disposition” means the sale, transfer, license, lease or other disposition
(including any sale and leaseback transaction) of any property by any Person,
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

 

“Dollar” and “$” mean the lawful currency of the United States.

 

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

 

“Eligible Assignee” means (a) any Person that meets the requirements to be an
assignee under Sections 10.06(b)(iii), 10.06(b)(v) and 10.06(b)(vi), (b) a
commercial bank organized under the laws of the United States, or any State
thereof, having total assets in excess of $500,000,000 or any commercial finance
or asset based lending affiliate of any such commercial bank, (c) a savings and
loan association or savings bank organized under the laws of the United States,
or any State thereof, having a net worth of at least $250,000,000 calculated in
accordance with GAAP, (d) any Lender (or any Affiliate of any Lender) listed on
the signature page of this Agreement, (e) other financial institutions with a
net worth of at least $250,000,000 and (f) any Affiliated Debt Fund.

 

“Eligible Specified Financial Asset” means a Specified Financial Asset, or a
Participation Interest therein, of any Borrowers:

 

(A)           IN WHICH, TO SECURE THE OBLIGATIONS, WHETHER CONTINGENT OR
OTHERWISE, THE ADMINISTRATIVE AGENT HAS A SECURITY INTEREST (I) PERFECTED BY THE
ADMINISTRATIVE AGENT’S POSSESSION OR BY “CONTROL” (AS

 

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DEFINED IN §§ 8-106, 9-104, 9-105 AND 9-106 OF THE UNIFORM COMMERCIAL CODE OF
THE STATE OF NEW YORK) IN FAVOR OF THE ADMINISTRATIVE AGENT (WITH, IF THE
ADMINISTRATIVE AGENT SO ELECTS AND TERMINATES THE COLLATERAL AGREEMENT, ANOTHER
CUSTODIAN OR SECURITIES INTERMEDIARY DESIGNATED BY THE ADMINISTRATIVE AGENT WITH
THE BORROWERS’ CONSENT, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR
DELAYED, FOR THE PURPOSES OF OBTAINING CONTROL), OR, IF IN THE REASONABLE
OPINION OF THE ADMINISTRATIVE AGENT IT IS NOT POSSIBLE OR PRACTICABLE TO PERFECT
THE SECURITY INTEREST BY THE ADMINISTRATIVE AGENT’S POSSESSION OR BY “CONTROL”
IN FAVOR OF THE ADMINISTRATIVE AGENT, IS OTHERWISE PERFECTED, AND PERFECTED IN
SUCH A WAY AS TO BE ENTITLED TO FIRST PRIORITY, TO THE REASONABLE SATISFACTION
OF THE ADMINISTRATIVE AGENT AND (II) IS CAPABLE OF BEING ENFORCED BY THE
ADMINISTRATIVE AGENT WITHOUT THE CONSENT OF ANY THIRD PARTY (OTHER THAN, IN THE
CASE OF A SPECIFIED FINANCIAL ASSET THAT IS A LOAN, THE CUSTOMARY REQUIREMENT OF
THE CONSENT OF THE ADMINISTRATIVE AGENT OR, UNLESS THE LOAN IS IN DEFAULT,
BORROWER OR MATERIAL OBLIGOR OF THE LOAN) OR RESORT TO JUDICIAL PROCESS;

 

(B)           WHICH IS NOT OTHERWISE SUBJECT TO ANY EQUAL OR PRIOR SECURITY
INTEREST, LIEN OR ENCUMBRANCE OTHER THAN LIENS IN FAVOR OF THE ADMINISTRATIVE
AGENT FOR THE BENEFIT OF THE LENDERS;

 

(C)           WHICH IS NOT IN DEFAULT AS OF THE DATE ON WHICH SUCH ASSET WAS
ACQUIRED BY THE BORROWERS;

 

(D)           WHICH IS NOT SUBJECT TO ANY RIGHT OF RECOUPMENT OR SET-OFF;

 

(E)           FOR ANY LOAN COLLATERAL (AS DEFINED IN THE SECURITY AGREEMENT) OF
ANY BORROWER, IN RESPECT OF WHICH, THE ADMINISTRATIVE AGENT OR THE CUSTODIAN, ON
BEHALF OF THE ADMINISTRATIVE AGENT, AS DIRECTED BY THE ADMINISTRATIVE AGENT, HAS
RECEIVED AN ORIGINAL OR COPY OF (1) A CREDIT AGREEMENT INDICATING SUCH BORROWER
AS A LENDER THEREUNDER WITH RESPECT TO THE LOAN OR ADVANCE, (2) A PROMISSORY
NOTE INDICATING SUCH BORROWER AS A PAYEE OF THE LOAN OR ADVANCE, (3) AN
ASSIGNMENT AGREEMENT INDICATING SUCH BORROWER AS AN ASSIGNEE OF THE LOAN OR
ADVANCE OR (4) A PARTICIPATION AGREEMENT OR PARTICIPATION CERTIFICATE INDICATING
SUCH BORROWER AS A PARTICIPANT IN THE LOAN OR ADVANCE;

 

(F)            IN RESPECT OF WHICH, UNLESS UNDER THE “CONTROL” (AS DEFINED IN §§
8-106, 9-104, 9-105 AND 9-106 OF THE UNIFORM COMMERCIAL CODE OF THE STATE OF NEW
YORK) OF THE ADMINISTRATIVE AGENT ACTING AS A SECURITIES INTERMEDIARY, SUCH
BORROWER HAS ISSUED TO THE APPLICABLE ISSUER OR MATERIAL OBLIGOR (OR, IF
PAYMENTS ARE MADE THROUGH AN AGENT, TO THE APPLICABLE AGENT) AN INSTRUCTION
DIRECTING ALL PAYMENTS OF AMOUNTS PAYABLE TO SUCH BORROWER IN RESPECT OF SUCH
SPECIFIED FINANCIAL ASSET TO THE CUSTODIAL ACCOUNT OR ANOTHER ACCOUNT APPROVED
BY THE ADMINISTRATIVE AGENT OVER WHICH THE ADMINISTRATIVE AGENT HAS SUCH
“CONTROL”;

 

(G)           THE VALUE OF WHICH TO BE INCLUDED, FOR PURPOSES OF THE COMPUTATION
OF THE APPLICABLE BORROWING BASE AT ANY TIME, HAS BEEN DETERMINED, OR, IF
REQUIRED TO BE UPDATED, HAS BEEN DETERMINED IN RESPONSE TO THE UPDATE
REQUIREMENT SET FORTH IN SECTION 6.02(D), (E) OR (F), AND TO THE EXTENT SUCH
VALUE IS NOT BEING DISPUTED BY THE ADMINISTRATIVE AGENT;

 

(H)           FOR WHICH THE DEPOSITARY BANK, ISSUER OR MATERIAL OBLIGOR, AS THE
CASE MAY BE, EXCLUDING ANY ISSUER OF SECURITIES BY A SPECIAL PURPOSE ENTITY IN A
SECURITIZATION, IS ORGANIZED AND HAS ITS CHIEF EXECUTIVE OFFICE IN (I) THE
UNITED STATES OF AMERICA, OR (II) IF APPROVED BY THE ADMINISTRATIVE AGENT IN ITS
SOLE DISCRETION, WHICH SHALL BE EXERCISED IN A COMMERCIALLY REASONABLE MANNER,
BELGIUM, FRANCE, ITALY, LUXEMBOURG, NETHERLANDS, GERMANY, DENMARK, IRELAND,
UNITED KINGDOM, AUSTRIA, FINLAND, SWEDEN OR JAPAN;

 

(I)            WHICH IS DENOMINATED IN DOLLARS, EUROS, BRITISH POUNDS STERLING
OR YEN;

 

(J)            IS NOT “MARGIN STOCK” AS DEFINED IN REGULATION U OF THE FEDERAL
RESERVE BOARD;

 

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(K)           IN THE CASE OF A FIRST OR SECOND LIEN BANK LOAN, A MEZZANINE
OBLIGATIONS OR A BRIDGE LOAN, THAT IS A TERM LOAN, AND IS EITHER A DELAYED DRAW
LOAN OR HAS BEEN FULLY FUNDED (I.E., IS NOT SUBJECT TO AN ADDITIONAL LENDING
COMMITMENT) AND IS NOT IN DEFAULT; AND

 

(L)            IN THE CASE OF A PARTICIPATION INTEREST, WHICH THE ADMINISTRATIVE
AGENT IS REASONABLY SATISFIED IS A “TRUE” PARTICIPATING INTEREST RATHER THAN
BEING A FINANCING AND IS CONSISTENT WITH MARKET NORMS FOR AGREEMENTS BETWEEN
UNAFFILIATED ENTITIES DEALING AT ARM’S LENGTH.

 

Notwithstanding the foregoing, the Borrowing Base on any date may include an
asset to be purchased by any Borrower with the proceeds of a Loan to be made on
that date so long as (i) the Administrative Agent has been directed by such
Borrower to pay the proceeds of such Loan directly to the seller of the asset
(to the extent of the purchase price thereof), and (ii) the seller has been
directed to deliver the asset to the Administrative Agent or its nominee before
or against payment by such Borrower, or, if such delivery is not possible or
practical, in such other manner as is reasonably acceptable to the
Administrative Agent to satisfy the requirements of clauses (a), (b) and (c) of
this definition of “Eligible Specified Financial Asset.”  In such instance, the
requirements of clauses (a), (b), (c) and (d) need not be met for the asset to
qualify as an Eligible Specified Financial Asset until the expiration of three
Business Days following the date of the Borrowing so long as during the three
Business Day period, the Administrative Agent has a first priority perfected
security interest in the asset, provided, however, that the Value of the asset
does not exceed $25,000,000.

 

“Environmental Laws” means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of KKR Financial or any of its respective
Subsidiaries 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.

 

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.

 

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

 

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

 

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“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by any Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by a any Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon any Borrower or any ERISA Affiliate.

 

“Euro” means the single currency of the members of the European Union from time
to time which adopt a single, shared currency.

 

“Eurodollar Loans” means Fixed Period Eurodollar Loans or Daily Floating
Eurodollar Loans.

 

“Eurodollar Rate” means the Fixed Period Eurodollar Rate or the Daily Floating
Eurodollar Rate.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of any Borrower hereunder, (a) taxes imposed on or measured by its overall gross
or net income (however denominated), and franchise taxes imposed on it (in lieu
of net income taxes), in each case, by the jurisdiction (or any political
subdivision thereof including, without limitation, a state of the United States
and any political subdivision of such state) under the laws of which such
recipient is organized (or political subdivision thereof) 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 or any similar tax imposed by any other jurisdiction (or
political subdivision thereof) in which any Borrower is located, (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by any
Borrower under Section 10.13), any and all Taxes (including withholding tax)
that are imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party hereto (or designates a new Lending Office),
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 any Borrower with respect to such withholding
tax pursuant to Section 3.01(a), or are attributable to such Foreign Lender’s
failure or inability (other than as a result of a Change in Law) to comply with
Section 3.01(e), (d) any and all Taxes imposed on it as a result of a trade or
business, a permanent establishment, or a present or former connection between
such Lender or the Administrative Agent (as the case may be) and the
jurisdiction of the Governmental Authority imposing such tax or any taxing
authority thereof or therein (other than any connection resulting from being a
Lender hereunder) and (e) any taxes that are imposed by reason of Section 1471
or Section 1472 of the Code.

 

“Existing Credit Agreement” means that certain Credit Agreement, dated as of
November 10, 2008 (as amended) among certain of the Borrowers and the lenders
and agents party thereto.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average (rounded upwards, if necessary, to a whole multiple of 1/100 of
1%) of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding

 

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such day; provided that (a) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate (rounded upward, if necessary,
to a whole multiple of 1/100 of 1%) charged to Citibank, N.A. on such day on
such transactions as determined by the Administrative Agent.

 

“Fee Letter” means the fee letter agreement, dated the date hereof, among the
Borrowers and the Administrative Agent, as amended.

 

“Financing SPE” means any bankruptcy-remote special purpose Subsidiary formed by
any Borrower or an Affiliate and which is, or is established for the purpose of
becoming, an issuer in a Securitization.  It is understood and agreed that KKR
CLO 2009 is a Financing SPE for purposes of this Agreement.

 

“First Lien Bank Loan” has the meaning specified in Section 6.16(b).

 

“Fixed Period Eurodollar Loan” means any Revolving Loan that bears interest at a
per annum rate equal to the Fixed Period Eurodollar Rate plus the Applicable
Rate.

 

“Fixed Period Eurodollar Rate” means, for any day, a fixed rate equal to BBA
LIBOR, as published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for U.S. dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period.  If such rate is not available at such time for any reason, then the
“Fixed Period Eurodollar Rate” for such Interest Period shall be the rate per
annum determined by the Administrative Agent to be the rate at which deposits in
U.S. dollars for delivery on the first day of such Interest Period in same day
funds in the approximate amount of the Fixed Period Eurodollar Loan being made,
continued or converted by Citibank, N.A. and with a term equivalent to such
Interest Period would be offered by Citibank, N.A.’s London Branch to major
banks in the London interbank eurodollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which any Borrower is resident for tax
purposes.  For purposes of this definition, the United States, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.

 

“FRB” means the Board of Governors of the Federal Reserve System of the United
States.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

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“Governmental Authority” means the government of the United States or any other
nation, or of 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 (including any
supra-national bodies such as the European Union or the European Central Bank).

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien); provided that the term
“Guarantee” shall not include endorsements for collection or deposit in the
ordinary course of business.  The amount of any Guarantee shall be deemed to be
an amount equal to the stated or determinable amount of the related primary
obligation, or portion thereof, in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guaranteeing Person in good faith.  The
term “Guarantee” as a verb has a corresponding meaning.

 

“Guarantor Payment” has the meaning specified in Section 2.16.

 

“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.

 

“High Yield Securities” has the meaning specified in Section 6.16(b).

 

“Increase Effective Date” has the meaning specified in Section 2.14(d).

 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(A)           ALL OBLIGATIONS OF SUCH PERSON FOR BORROWED MONEY AND ALL
OBLIGATIONS OF SUCH PERSON EVIDENCED BY BONDS, DEBENTURES, NOTES, LOAN
AGREEMENTS OR OTHER SIMILAR INSTRUMENTS;

 

(B)           ALL DIRECT OR CONTINGENT OBLIGATIONS OF SUCH PERSON ARISING UNDER
LETTERS OF CREDIT (INCLUDING STANDBY AND COMMERCIAL), BANKERS’ ACCEPTANCES, BANK
GUARANTIES, SURETY BONDS AND SIMILAR INSTRUMENTS;

 

(C)           NET OBLIGATIONS OF SUCH PERSON UNDER ANY SWAP CONTRACT;

 

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(D)           ALL OBLIGATIONS OF SUCH PERSON TO PAY THE DEFERRED PURCHASE PRICE
OF PROPERTY OR SERVICES (OTHER THAN TRADE ACCOUNTS PAYABLE IN THE ORDINARY
COURSE OF BUSINESS AND, IN EACH CASE, NOT PAST DUE FOR MORE THAN 60 DAYS AFTER
THE DATE ON WHICH SUCH TRADE ACCOUNT PAYABLE WAS CREATED);

 

(E)           INDEBTEDNESS (EXCLUDING PREPAID INTEREST THEREON) SECURED BY A
LIEN ON PROPERTY OWNED OR BEING PURCHASED BY SUCH PERSON (INCLUDING INDEBTEDNESS
ARISING UNDER CONDITIONAL SALES OR OTHER TITLE RETENTION AGREEMENTS), WHETHER OR
NOT SUCH INDEBTEDNESS SHALL HAVE BEEN ASSUMED BY SUCH PERSON OR IS LIMITED IN
RECOURSE;

 

(F)            CAPITAL LEASE OBLIGATIONS AND SYNTHETIC LEASE OBLIGATIONS;

 

(G)           ALL OBLIGATIONS OF SUCH PERSON TO PURCHASE, REDEEM, RETIRE,
DEFEASE OR OTHERWISE MAKE ANY PAYMENT IN RESPECT OF ANY EQUITY INTEREST IN SUCH
PERSON OR ANY OTHER PERSON, VALUED, IN THE CASE OF A REDEEMABLE PREFERRED
INTEREST, AT THE GREATER OF ITS VOLUNTARY OR INVOLUNTARY LIQUIDATION PREFERENCE
PLUS ACCRUED AND UNPAID DIVIDENDS; AND

 

(H)           ALL GUARANTEES OF SUCH PERSON IN RESPECT OF ANY OF THE FOREGOING.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership, joint venture (other than a joint venture that
is itself a corporation or limited liability company) or other business venture
(collectively with a partnership and a joint venture, referred to hereinafter as
a “Venture”), but only to the extent that such Person is directly or indirectly
liable for such Indebtedness, whether by reason of its status as general
partner, joint venturer or otherwise, unless, and only to the extent that, such
Indebtedness is expressly made non-recourse to such Person or Venture.  The
amount of any net obligation under any Swap Contract on any date shall be deemed
to be the Swap Termination Value thereof as of such date.  The amount of any
Capital Lease Obligation or Synthetic Lease Obligation as of any date shall be
deemed to be the amount of Attributable Indebtedness in respect thereof as of
such date.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees” has the meaning specified in Section 10.04(b).

 

“Industry Classification Group” means (a) any of the Moody’s classification
groups, together with any such classification groups that may be subsequently
established by Moody’s and provided by the Borrowers to the Lenders and (b) up
to three additional industry group classifications established by the Borrowers
pursuant to Section 6.15(a).

 

“Information” has the meaning specified in Section 10.07.

 

“Intangible Assets” means, as of any date of determination, the sum (without
duplication) of the following (in each case, to the extent included in
Consolidated Total Assets):  (a) the total book value of all assets of KKR
Financial and its Subsidiaries properly classified as intangible assets under
GAAP, including such items as goodwill, the purchase price of acquired assets in
excess of the fair market value thereof, trademarks, trade names, service marks,
brand names, copyrights, patents and licenses, and rights with respect to the
foregoing; plus (b) all amounts representing any write-up in the book value of
any assets of KKR Financial or its Subsidiaries resulting from a revaluation
thereof subsequent to December 31, 2007, excluding adjustments to translate
foreign assets and liabilities for changes in foreign exchange rates made in
accordance with Statement of Financial Accounting Standards No. 52.

 

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“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan or
a Daily Floating Eurodollar Loan, the last day of each Interest Period
applicable to such Loan and the Maturity Date; provided, however, that if any
Interest Period for a Fixed Period Eurodollar Loan exceeds three months, the
respective dates that fall every three months after the beginning of such
Interest Period shall also be Interest Payment Dates; and (b) as to any Base
Rate Loan or a Daily Floating Eurodollar Loan (including a Swingline Loan), the
last Business Day of each March, June, September and December and the Maturity
Date.

 

“Interest Period” means, as to each Fixed Period Eurodollar Loan, the period
commencing on the date such Fixed Period Eurodollar Loan is disbursed or
converted to or continued as a Fixed Period Eurodollar Loan and ending on the
date, one, two, three or six months thereafter, as selected by any Borrower in
its Loan Notice; provided that:

 

(A)           ANY INTEREST PERIOD THAT WOULD OTHERWISE END ON A DAY THAT IS NOT
A BUSINESS DAY SHALL BE EXTENDED TO THE NEXT SUCCEEDING BUSINESS DAY UNLESS SUCH
BUSINESS DAY FALLS IN ANOTHER CALENDAR MONTH, IN WHICH CASE SUCH INTEREST PERIOD
SHALL END ON THE NEXT PRECEDING BUSINESS DAY;

 

(B)           ANY INTEREST PERIOD THAT BEGINS ON THE LAST BUSINESS DAY OF A
CALENDAR MONTH (OR ON A DAY FOR WHICH THERE IS NO NUMERICALLY CORRESPONDING DAY
IN THE CALENDAR MONTH AT THE END OF SUCH INTEREST PERIOD) SHALL END ON THE LAST
BUSINESS DAY OF THE CALENDAR MONTH AT THE END OF SUCH INTEREST PERIOD; AND

 

(C)           NO INTEREST PERIOD SHALL EXTEND BEYOND THE MATURITY DATE.

 

“Interest Rate Type” means, with respect to any Loan, its characterization as a
Base Rate Loan, a Daily Floating Eurodollar Loan or a Fixed Period Eurodollar
Loan.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit.  For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

 

“Investment Company Act” means the Investment Company Act of 1940, as amended.

 

“IRS” means the United States Internal Revenue Service.

 

“Issuing Bank” means (i) Citibank, N.A., in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity or (ii) or any
other Lender that, at the request of the Borrowers and with the consent of the
Administrative Agent, agrees, in such Lender’s sole discretion, to become an
Issuing Bank for the purpose of issuing Letters of Credit pursuant to
Section 2.04.  In the case of any Letter of Credit to be issued in an Approved
Currency, a Lender that is an Issuing Bank pursuant to the foregoing clauses (i)
or (ii) may designate any of its affiliates as the “Issuing Bank” for purposes
of such Letter of Credit.

 

“Judgment Currency” has the meaning specified in Section 10.18(a).

 

“Judgment Currency Conversion Date” has the meaning specified in
Section 10.18(a).

 

“KFH III” has the meaning specified in the introductory paragraph hereto.

 

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“KKR CLO 2009” has the meaning specified in the introductory paragraph hereto.

 

“KKR Financial” has the meaning specified in the introductory paragraph hereto.

 

“KKR Financial Form 10-K” means KKR Financial’s Form 10-K filed with the SEC on
March 1, 2010, as amended prior to the date hereof.

 

“KKR Holdings” has the meaning specified in the introductory paragraph hereto.

 

“KKR Holdings II” has the meaning specified in the introductory paragraph
hereto.

 

“KKR Holdings III” has the meaning specified in the introductory paragraph
hereto.

 

“KKR Holdings LTD” has the meaning specified in the introductory paragraph
hereto.

 

“KKR TRS LTD” has the meaning specified in the introductory paragraph hereto.

 

“L/C Maturity Date” means the date that is five Business Days prior to the
Maturity Date.

 

“L/C Participant” has the meaning specified in Section 2.04(c).

 

“L/C Participation” has the meaning specified in Section 2.04(c).

 

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the Swingline Lender.

 

“Lender Insolvency Event” means that (i) a Lender or its Parent Company is
insolvent, or is generally unable to pay its debts as they become due, or admits
in writing its inability to pay its debts as they become due, or makes a general
assignment for the benefit of its creditors, or (ii) such Lender or its Parent
Company is the subject of a bankruptcy, insolvency, reorganization, liquidation
or similar proceeding, or a receiver, trustee, conservator, intervenor or
sequestrator or the like has been appointed for such Lender or its Parent
Company, or such Lender or its Parent Company has taken any action in
furtherance of or indicating its consent to or acquiescence in any such
proceeding or appointment.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrowers and the
Administrative Agent.

 

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

 

“Letter of Credit Commitment” means $25,000,000.

 

“Letter of Credit 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 payments made by the

 

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Issuing Bank pursuant to Letter of Credits that have not yet been reimbursed by
or on behalf of the Borrowers at such time.

 

“Letters of Credit Outstanding” shall mean, at any time, the sum of, without
duplication, (a) the aggregate stated amount of all outstanding Letters of
Credit and (b) the aggregate amount of all unreimbursed drawings or payments in
respect of all Letters of Credit.

 

“Letters of Credit Request” has the meaning specified in Section 2.04(b).

 

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

“Line Cap” means, at any time, the lesser of (a) the Aggregate Commitment Amount
and (b) the Borrowing Base, in each case at or as of such time.

 

“Loan” means any Revolving Loan or Swingline Loan.

 

“Loan Documents” means this Agreement, the Collateral Agreement, the Security
Documents, and each Note, if any, issued hereunder.

 

“Loan Notice” means either a Revolving Loan Notice or a Swingline Loan Notice.

 

“Long-Term U.S. Government Securities” has the meaning specified in
Section 6.16(b).

 

“Management Agreement” means that certain Amended and Restated Management
Agreement, dated as of May 4, 2007, between KKR Financial and KKR Financial
Advisors LLC, as amended.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or condition, financial or otherwise, of the Borrowers and
their respective Subsidiaries taken as a whole, (b) the ability of any Borrower
to perform any of its obligations under this Agreement or any other Loan
Document or (c) the rights of or benefits available to the Administrative Agent
or the Lenders under this Agreement or any other Loan Document.

 

“Material Indebtedness” means Indebtedness (other than the Loans and
Indebtedness in respect of Swap Contracts and Repurchase Agreement) of any one
or more of each of the Borrowers and their respective Subsidiaries in an
aggregate principal amount exceeding $25,000,000.

 

“Maturity Date” means May 3, 2014, and, if such date is not a Business Day, the
Maturity Date shall be the next preceding Business Day.

 

“Maximum Rate” has the meaning specified in Section 10.09.

 

“Mezzanine Obligations” has the meaning specified in Section 6.16(b).

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

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“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

 

“Net Value Amount” means, in relation to an Eligible Specified Financial Asset,
the product of the Value of such Eligible Specified Financial Asset and the
relevant Specified Percentage applicable to such Eligible Specified Financial
Asset.

 

“Non-Cash Pay Investments” has the meaning specified in Section 6.16(b).

 

“Non-Company VIE Liabilities” means, as of any date of determination, all
non-recourse liabilities of the consolidated GAAP balance sheet of the Borrowers
and their consolidated Subsidiaries arising from the required application of
GAAP.

 

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

 

“Non-U.S. Borrower” means any Borrower that is not organized under the laws of
the United States, any state or territory thereof, or the District of Columbia.

 

“Note” means a promissory note made by any Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit C.

 

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Borrower arising under any Loan Document or
otherwise with respect to any Loan hereunder, whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Borrower or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

“Other Letter of Credit Obligations” means reimbursement obligations of either
of the Borrowers in respect of letters of credit issued for the benefit of
either of the Borrowers or any of their respective Subsidiaries, which
reimbursement obligations may be unsecured or may be collateralized by means of
a deposit of cash with the issuer of any such letter of credit.

 

“Other Short-Term Securities” has the meaning specified in Section 6.16(b).

 

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies of the United States
or any political subdivision thereof (including, without limitation, any state
in the United States and any political subdivision of any such

 

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state) (including interest, fines, penalties and additions to tax) arising from
the execution, delivery, performance or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.

 

“Outstanding Amount” means with respect to all Loans hereunder, on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Loans occurring on such date.

 

“Parent Company” means, with respect to a Lender, the bank holding company (as
defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or
any Person owning, beneficially or of record, directly or indirectly, a majority
of the shares of such Lender.

 

“Participant” has the meaning specified in Section 10.06(d).

 

“Participation Interest” means any participating interest in any Specified
Financial Asset which is a collateralized loan obligation, collateralized bond
obligation, collateralized debt obligation, first lien Bank Loan, second lien
Bank Loan, Mezzanine Obligation or Bridge Loan where the record holder of such
interest is a Financing SPE or a financial institution which has a Debt Rating
equal to A+ by S&P, or its equivalent from another rating agency, or higher.

 

“Patriot Act” has the meaning specified in Section 10.16.

 

“PBGC” means the Pension Benefit Guaranty Corporation or any successor entity
performing similar functions.

 

“PCAOB” means the Public Company Accounting Oversight Board.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by KKR Financial or
any ERISA Affiliate or to which KKR Financial or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

 

“Performing” has the meaning specified in Section 6.16(b).

 

“Performing Cash Pay Mezzanine Obligations” has the meaning specified in
Section 6.16(b).

 

“Performing Common Equity” has the meaning specified in Section 6.16(b).

 

“Performing First Lien Bank Loans” has the meaning specified in Section 6.16(b).

 

“Performing Non-Cash Pay High Yield Securities” has the meaning specified in
Section 6.16(b).

 

“Performing Non-Cash Pay Mezzanine Obligations” has the meaning specified in
Section 6.16(b).

 

“Performing Second Lien Bank Loans” has the meaning specified in
Section 6.16(b).

 

“Performing Secured Cash Pay High Yield Securities” has the meaning specified in
Section 6.16(b).

 

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“Performing Unsecured Bank Loans” has the meaning specified in Section 6.16(b).

 

“Performing Unsecured Cash Pay High Yield Securities” has the meaning specified
in Section 6.16(b).

 

“Permitted Encumbrances” means:

 

(A)           LIENS IMPOSED BY LAW FOR TAXES THAT ARE NOT YET DUE OR ARE BEING
CONTESTED IN GOOD FAITH BY THE BORROWERS OR A SUBSIDIARY THEREOF AND FOR WHICH
ADEQUATE RESERVES HAVE BEEN SET ASIDE;

 

(B)           LANDLORDS’, 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 GOOD FAITH BY THE BORROWERS OR A SUBSIDIARY THEREOF;

 

(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 AND DEPOSITS SECURING LIABILITY TO INSURANCE
CARRIERS IN RELATION TO THE FOREGOING;

 

(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; AND

 

(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 MONETARY OBLIGATIONS AND DO NOT MATERIALLY
INTERFERE WITH THE ORDINARY CONDUCT OF BUSINESS OF ANY BORROWER OR ANY
SUBSIDIARY;

 

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 (OR BY ANY AGENCY THEREOF TO THE EXTENT SUCH OBLIGATIONS ARE BACKED BY
THE FULL FAITH AND CREDIT OF THE UNITED STATES OF AMERICA), IN EACH CASE
MATURING WITHIN ONE YEAR FROM THE DATE OF ACQUISITION THEREOF;

 

(B)           INVESTMENTS IN COMMERCIAL PAPER MATURING WITHIN 270 DAYS FROM THE
DATE OF ACQUISITION THEREOF AND HAVING, AT SUCH DATE OF ACQUISITION, THE HIGHEST
CREDIT RATING OBTAINABLE FROM S&P OR MOODY’S;

 

(C)           INVESTMENTS IN CERTIFICATES OF DEPOSIT, BANKER’S ACCEPTANCES AND
TIME DEPOSITS MATURING WITHIN 180 DAYS 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;

 

(D)           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 (C) ABOVE;
AND

 

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(E)           MONEY MARKET FUNDS THAT (I) COMPLY WITH THE CRITERIA SET FORTH IN
SEC RULE 2A-7 UNDER THE INVESTMENT COMPANY ACT, (II) HAVE A DEBT RATING OF AAA
BY S&P, OR ITS EQUIVALENT FROM ANOTHER RATING AGENCY, AND (III) HAVE PORTFOLIO
ASSETS OF AT LEAST $5,000,000,000.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by any Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

“Platform” has the meaning specified in Section 6.02.

 

“Potential Defaulting Lender” means, at any time, a Lender (i) as to which the
Administrative Agent has notified the Borrowers that an event of the kind
referred to in the definition of “Lender Insolvency Event” has occurred and is
continuing in respect of any Subsidiary of such Lender, (ii) as to which the
Administrative Agent, the Issuing Bank or the Swingline Lender has in good faith
determined and notified the Borrowers and (in the case of the Issuing Bank or
the Swingline Lender) the Administrative Agent that such Lender or its Parent
Company or a Subsidiary thereof has notified the Administrative Agent, or has
stated publicly, that it will not comply with its funding obligations under any
other loan agreement or credit agreement or other similar financing agreement or
(iii) that has, or whose Parent Company has, a non-investment grade rating from
Moody’s or S&P or another nationally recognized rating agency.  Any
determination that a Lender is a Potential Defaulting Lender under any of
clauses (i) through (iii) above will be made by the Administrative Agent or, in
the case of clause (ii), the Issuing Bank or the Swingline Lender, as the case
may be, in its reasonable discretion acting in good faith.  The Administrative
Agent will promptly send to all parties hereto a copy of any notice to the
Borrowers provided for in this definition.

 

“Preferred Stock” has the meaning specified in Section 6.16(b).

 

“Public Lender” has the meaning specified in Section 6.02.

 

“Publicly Trade Common Equity” has the meaning specified in Section 6.16(b).

 

“Register” has the meaning specified in Section 10.06(c).

 

“Registered Public Accounting Firm” has the meaning specified in the Securities
Laws and shall be independent of the Borrowers as prescribed by the Securities
Laws.

 

“Related Borrowing Base Information” means, with respect to any “Specified
Financial Asset” as defined herein, or Participation Interest therein, included
or to be included in the Borrowing Base, (a) the category of the Specified
Financial Asset as referred to in clauses (a) through (k) of the definition and,
if a Participation Interest is applicable, the participating interest, (b) the
identification of all primary and secondary material obligors obligated on the
Specified Financial Asset, (c) the CUSIP number, if any, corresponding to such
Eligible Specified Financial Asset, (d) the principal amount of the loan, debt
or other monetary obligation in which any Borrower has an interest, (e) the
scheduled maturity of the loan, debt or other monetary obligation, (f) the type
of collateral securing the loan, debt or other monetary obligation and (g) the
source of information used in the determination of the Value.

 

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

 

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“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

“Repurchase Agreement” means any agreement involving the sale or purchase of
financial or other assets whereby the seller of such assets agrees to repurchase
such assets at an agreed upon price and at a stated time.

 

“Request for Borrowing” means (a) with respect to a Borrowing, conversion or
continuation of Revolving Loans, a Revolving Loan Notice and (b) with respect to
a Swingline Loan, a Swingline Loan Notice.

 

“Required Lenders” means, as of any date of determination, the Lenders having
Commitments in the aggregate representing more than 50% of the Aggregate
Commitments at such time or, if the commitment of each Lender to make Loans has
been terminated pursuant to Section 8.02, at least two Lenders holding in the
aggregate more than 50% of the Total Revolving Credit Exposure (with the
aggregate amount of each Lender’s risk participation in Swingline Loans being
deemed “held” by such Lender for purposes of this definition); provided that the
Commitment of, and the portion of the Total Revolving Credit Exposure held or
deemed held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.

 

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer or controller of a Borrower or
any other officer of the applicable Borrower (i) so designated by any of the
foregoing officers in a notice to the Administrative Agent or (ii) so authorized
by resolutions of the applicable Borrower’s board of directors.  Any document
delivered hereunder that is signed by a Responsible Officer of a Borrower shall
be conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Borrower and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Borrower.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of the Borrowers 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 capital stock or other Equity Interest, or on account of
any return of capital to any Borrower’s stockholders, partners or members (or
the equivalent Person thereof).

 

“Revaluation Date” means, with respect to any Loan, (a) each date of a Borrowing
of a Fixed Period Eurodollar Loan denominated in an Alternate Currency and
(b) each date of a continuation of a Fixed Period Eurodollar Loan denominated in
an Alternate Currency pursuant to Section 1.05.

 

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the aggregate Dollar Equivalent of (a) the Outstanding Amount of the
Revolving Loans of such Lender, (b) such Lender’s Applicable Percentage of
Letter of Credit Exposure then outstanding and (c) such Lender’s Applicable
Percentage of the Outstanding Amount of all Swingline Loans.

 

“Revolving Credit Facility” means the credit facility pursuant to which
Revolving Loans are made available to the Borrowers in accordance with this
Agreement.

 

“Revolving Loan” means an extension of credit made by a Lender to a Borrower
pursuant to Section 2.01 of this Agreement.

 

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“Revolving Loan Notice” means a notice of (a) a Borrowing of a Revolving Loan,
(b) a conversion of Revolving Loans from one Interest Rate Type to another, or
(c) a continuation of Fixed Period Eurodollar Loans pursuant to Section 2.02(a),
which, if in writing, shall be substantially in the form of Exhibit A.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

 

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

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

 

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

 

“Second Lien Bank Loan” has the meaning specified in Section 6.16(b).

 

“Secured Indebtedness” means secured Indebtedness incurred by any Borrower or
any Subsidiary in the course of its business as such business is described in
the KKR Financial Form 10-K, including any such Indebtedness incurred pursuant
to or in connection with any loan warehouse agreement, Repurchase Agreement,
Swap Agreement, collateralized bond obligation, collateralized loan obligation,
collateralized debt obligation or Securitization.

 

“Securities” has the meaning specified in Section 6.16(b).

 

“Securitization” means the issuance by a bankruptcy-remote special purpose
entity of evidences of debt obligations or Equity Interests to holders which are
third party institutional investors and which entitle the holders to receive
payments that depend primarily on the cash flow of accounts, chattel paper,
instruments, investment property or payment intangibles owned by the special
purpose entity.

 

“Security Agreement” means the Security Agreement executed and delivered in
connection with this Agreement, among the Borrowers and the Administrative
Agent, as further amended, amended and restated, supplemented or otherwise
modified from time to time.

 

“Security Documents” means the Security Agreement and all other instruments and
documents, including without limitation, Uniform Commercial Code financing
statements, which (a) are required to be executed, delivered or filed pursuant
to the Security Agreement or any other Loan Document or (b) are necessary for
the creation or perfection of any Lien in favor of the Administrative Agent for
the benefit of the Lenders to secure any of the Obligations.

 

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.

 

“Short-Term U.S. Government Securities” has the meaning specified in
Section 6.16(b).

 

“Single Obligor” means, collectively, all obligors that are Affiliates.

 

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“Solvent” means, with respect to any Person as of a particular date, that, on
such date (a) such Person is able to pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (b) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a business
or a transaction, for which such Person’s assets would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged or is to engage, (d) the fair value of
the assets of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person, and
(e) the present fair saleable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing the amount
of contingent liabilities at any time, it is intended that such liabilities will
be computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

 

“Special Event” means, in connection with a Trust Preferred Financing Vehicle,
the receipt by a Borrower (or its Subsidiary) of an opinion of counsel that as a
result of certain changes in or interpretations of the tax law or the Investment
Company Act or, in each case, regulations thereunder, there is more than an
insubstantial risk that the Trust Preferred Vehicle will be considered an
“investment company” under the Investment Company Act or that the Trust
Preferred Vehicle will be subject to United States federal income tax or subject
to more than a de minimus amount of other taxes or governmental charges or that
interest payable by the maker of the Trust Preferred Indebtedness will not be
eligible as a tax deduction by such maker.

 

“Spot Rate” for a currency means the rate determined by the Administrative Agent
to be the rate quoted by the Person acting in such capacity as the spot rate for
the purchase by such Person of such currency with another currency through its
principal foreign exchange trading office at approximately 11:00 a.m. on the
date two (2) Business Days prior to the date as of which the foreign exchange
computation is made; provided that the Administrative Agent may obtain such spot
rate from another financial institution designated by the Administrative Agent
if the Person acting in such capacity does not have as of the date of
determination a spot buying rate for any such currency.

 

“Stated Amount” of any Letter of Credit shall mean, at any time, the Dollar
Equivalent of the maximum amount available to be drawn thereunder at such time,
determined without regard to whether any conditions to drawing could then be
met.

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person; provided, that each Non-U.S. Borrower shall be considered a
Subsidiary of KKR Financial so long as KKR Financial owns (directly or
indirectly through other Subsidiaries) a majority of the preferred shares of
such Non-U.S. Borrower; and provided further that none of the CLO Entities
(other than KKR CLO 2009) shall be considered a Subsidiary of any Borrower for
so long as any Person other than KKR Financial or a Subsidiary or any affiliate
thereof holds any Indebtedness of such CLO Entity..  Unless otherwise specified,
all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of KKR Financial.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity

 

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contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward bond or forward bond price or forward bond
index transactions, interest rate options, forward foreign exchange
transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency
options, spot contracts, or any other similar transactions or any combination of
any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master
agreement, and (b) any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender). “Swingline Borrowing” means a borrowing of a Swingline Loan pursuant to
Section 2.03.

 

“Swingline Lender” means Citibank, N.A. in its capacity as provider of Swingline
Loans, or any successor swingline lender hereunder.

 

“Swingline Loan” has the meaning specified in Section 2.03(a).

 

“Swingline Loan Notice” means a notice of a Swingline Borrowing pursuant to
Section 2.03(b), which, if in writing, shall be substantially in the form of
Exhibit B.

 

“Swingline Sublimit” means, at any time, an amount equal to the lesser of
(a) $25,000,000 and (b) the Aggregate Commitment Amount.  The Swingline Sublimit
is part of, and not in addition to, the Aggregate Commitment Amount.

 

“Syndication Agents” means, collectively, Bank of America, N.A. and Deutsche
Bank AG New York Branch.

 

“Synthetic Lease” means any lease of goods or other property, whether real or
personal, which is treated as an operating lease under GAAP and as a loan or
financing for U.S. income tax purposes.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under a
Synthetic Lease.

 

“TARGET” means the Trans-European Automated Real-time Gross Settlement Express
Transfer payment system which utilizes a single shared platform and which was
launched on 19 November 2007.

 

“TARGET Day” means any day on which TARGET is open for the settlement of
payments in Euro.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

 

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“Total Revolving Credit Exposure” means, at any date, the sum of the Revolving
Credit Exposures of all Lenders.

 

“Trust Preferred Financing Vehicle” has the meaning assigned to such term in the
definition of Trust Preferred Securities Transaction.

 

“Trust Preferred Securities Transaction” means a transaction pursuant to which
(i) a Borrower (or any Subsidiary of a Borrower) issues unsecured, subordinated,
Debt Securities to, or borrows on an unsecured, subordinated basis from, any
trust or other entity that, as its primary purpose, provides financing to a
Borrower (or any Subsidiary of a Borrower) (a “Trust Preferred Financing
Vehicle”; such indebtedness of a Borrower or any of its Subsidiaries owing to a
Trust Preferred Financing Vehicle, “Trust Preferred Indebtedness”) and (ii) the
Trust Preferred Financing Vehicle funds such financing of such Borrower (or such
Subsidiary of a Borrower) by issuing and selling preferred securities having a
mandatory redemption date no earlier than 30 years and not subject to redemption
in less than 5 years from the date of their issuance (other than at the option
of a Borrower or applicable Subsidiary upon the occurrence of a Special Event)
(“Trust Preferred Securities”), which securities may be guaranteed on an
unsecured, subordinated basis by such Borrower or such Subsidiary to the extent
that the trustee has failed to make distributions from payments received from
such Borrower or such Subsidiary (each such guaranty, a “Trust Preferred
Guaranty”, collectively, “Trust Preferred Guarantees”).

 

“Type” means, with respect to any Loan, its Interest Rate Type or Currency Type.

 

“Unfunded Delayed Draw Amount” means, as of any date, and for any Delayed Draw
Loan that is a Specified Financial Asset as of such date, an amount equal to the
maximum unfunded portion of such Delayed Draw Loan that could be required to be
funded by a Borrower as of or after such date.

 

“United States” and “U.S.” mean the United States of America.

 

“Unpaid Drawing” has the meaning specified in Section 2.04(d).

 

“Unquoted Common Equity” has the meaning specified in Section 6.16(b).

 

“Unsecured Bank Loan” has the meaning specified in Section 6.16(b).

 

“Unsecured Indebtedness” means unsecured Indebtedness incurred by any Borrower
or any Subsidiary in the course of its business as such business is described in
the KKR Financial Form 10-K.

 

“U.S. Government Securities” has the meaning specified in Section 6.16(b).

 

“Value” means, on any date, in relation to an Eligible Specified Financial
Asset, the fair market value of the Eligible Specified Financial Asset,
determined, in accordance with Section 6.15.

 

“Yen” means the lawful currency of Japan.

 

1.02        OTHER INTERPRETIVE PROVISIONS.  WITH REFERENCE TO THIS AGREEMENT AND
EACH OTHER LOAN DOCUMENT, UNLESS OTHERWISE SPECIFIED HEREIN OR IN SUCH OTHER
LOAN DOCUMENT:

 

(A)           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

 

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MEANING AND EFFECT AS THE WORD “SHALL.”  UNLESS THE CONTEXT REQUIRES OTHERWISE,
(I) ANY DEFINITION OF OR REFERENCE TO ANY AGREEMENT, INSTRUMENT OR OTHER
DOCUMENT (INCLUDING ANY ORGANIZATION DOCUMENT) 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 OR IN ANY OTHER LOAN
DOCUMENT), (II) ANY REFERENCE HEREIN TO ANY PERSON SHALL BE CONSTRUED TO INCLUDE
SUCH PERSON’S SUCCESSORS AND ASSIGNS, (III) THE WORDS “HEREIN,” “HEREOF” AND
“HEREUNDER,” AND WORDS OF SIMILAR IMPORT WHEN USED IN ANY LOAN DOCUMENT, SHALL
BE CONSTRUED TO REFER TO SUCH LOAN DOCUMENT IN ITS ENTIRETY AND NOT TO ANY
PARTICULAR PROVISION THEREOF, (IV) ALL REFERENCES IN A LOAN DOCUMENT TO
ARTICLES, SECTIONS, EXHIBITS AND SCHEDULES SHALL BE CONSTRUED TO REFER TO
ARTICLES AND SECTIONS OF, AND EXHIBITS AND SCHEDULES TO, THE LOAN DOCUMENT IN
WHICH SUCH REFERENCES APPEAR, (V) ANY REFERENCE TO ANY LAW SHALL INCLUDE ALL
STATUTORY AND REGULATORY PROVISIONS CONSOLIDATING, AMENDING, REPLACING OR
INTERPRETING SUCH LAW AND ANY REFERENCE TO ANY LAW OR REGULATION SHALL, UNLESS
OTHERWISE SPECIFIED, REFER TO SUCH LAW OR REGULATION AS AMENDED, MODIFIED OR
SUPPLEMENTED FROM TIME TO TIME, AND (VI) 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.

 

(B)           IN THE COMPUTATION OF PERIODS OF TIME FROM A SPECIFIED DATE TO A
LATER SPECIFIED DATE, THE WORD “FROM” MEANS “FROM AND INCLUDING;” THE WORDS “TO”
AND “UNTIL” EACH MEAN “TO BUT EXCLUDING;” AND THE WORD “THROUGH” MEANS “TO AND
INCLUDING.”

 

(C)           SECTION HEADINGS HEREIN AND IN THE OTHER LOAN DOCUMENTS ARE
INCLUDED FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT AFFECT THE
INTERPRETATION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

 

1.03        ACCOUNTING TERMS.  (A)  GENERALLY.  ALL ACCOUNTING TERMS NOT
SPECIFICALLY OR COMPLETELY DEFINED HEREIN SHALL BE CONSTRUED IN CONFORMITY WITH,
AND ALL FINANCIAL DATA (INCLUDING FINANCIAL RATIOS AND OTHER FINANCIAL
CALCULATIONS) REQUIRED TO BE SUBMITTED PURSUANT TO THIS AGREEMENT SHALL BE
PREPARED IN CONFORMITY WITH, GAAP APPLIED ON A CONSISTENT BASIS, AS IN EFFECT
FROM TIME TO TIME, APPLIED IN A MANNER CONSISTENT WITH THAT USED IN PREPARING
THE AUDITED FINANCIAL STATEMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PRESCRIBED
HEREIN.

 

(B)           CHANGES IN GAAP.  KKR FINANCIAL SHALL PROVIDE A WRITTEN SUMMARY OF
MATERIAL CHANGES IN GAAP OR IN THE CONSISTENT APPLICATION THEREOF IN ACCORDANCE
WITH SECTION 6.02(A).  IF AT ANY TIME ANY CHANGE IN GAAP WOULD AFFECT THE
COMPUTATION OF ANY FINANCIAL RATIO OR REQUIREMENT SET FORTH IN ANY LOAN
DOCUMENT, AND EITHER THE BORROWERS OR THE REQUIRED LENDERS SHALL SO REQUEST, THE
ADMINISTRATIVE AGENT, THE LENDERS AND THE BORROWERS SHALL NEGOTIATE IN GOOD
FAITH TO AMEND SUCH RATIO OR REQUIREMENT TO PRESERVE THE ORIGINAL INTENT THEREOF
IN LIGHT OF SUCH CHANGE IN GAAP (SUBJECT TO THE APPROVAL OF THE REQUIRED
LENDERS); PROVIDED THAT, UNTIL SO AMENDED, (I) SUCH RATIO OR REQUIREMENT SHALL
CONTINUE TO BE COMPUTED IN ACCORDANCE WITH GAAP PRIOR TO SUCH CHANGE THEREIN AND
(II) THE BORROWERS SHALL PROVIDE TO THE ADMINISTRATIVE AGENT AND THE LENDERS
FINANCIAL STATEMENTS AND OTHER DOCUMENTS REQUIRED UNDER THIS AGREEMENT OR AS
REASONABLY REQUESTED HEREUNDER SETTING FORTH A RECONCILIATION BETWEEN
CALCULATIONS OF SUCH RATIO OR REQUIREMENT MADE BEFORE AND AFTER GIVING EFFECT TO
SUCH CHANGE IN GAAP.

 

(C)           CONSOLIDATION OF VARIABLE INTEREST ENTITIES.  ALL REFERENCES
HEREIN TO CONSOLIDATED FINANCIAL STATEMENTS OF KKR FINANCIAL AND ITS
SUBSIDIARIES OR TO THE DETERMINATION OF ANY AMOUNT FOR KKR FINANCIAL AND ITS
SUBSIDIARIES ON A CONSOLIDATED BASIS OR ANY SIMILAR REFERENCE SHALL, IN EACH
CASE, BE DEEMED TO INCLUDE EACH VARIABLE INTEREST ENTITY THAT KKR FINANCIAL IS
REQUIRED TO CONSOLIDATE PURSUANT TO GAAP AS IF SUCH VARIABLE INTEREST ENTITY
WERE A SUBSIDIARY AS DEFINED HEREIN.

 

1.04        ROUNDING.  ANY FINANCIAL RATIOS REQUIRED TO BE MAINTAINED BY KKR
FINANCIAL PURSUANT TO THIS AGREEMENT SHALL BE CALCULATED BY DIVIDING THE
APPROPRIATE COMPONENT BY THE OTHER COMPONENT,

 

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CARRYING THE RESULT TO ONE PLACE MORE THAN THE NUMBER OF PLACES BY WHICH SUCH
RATIO IS EXPRESSED HEREIN AND ROUNDING THE RESULT UP OR DOWN TO THE NEAREST
NUMBER (WITH A ROUNDING-UP IF THERE IS NO NEAREST NUMBER).

 

1.05        EXCHANGE RATES; CURRENCY EQUIVALENTS.

 

(A)           THE ADMINISTRATIVE AGENT SHALL DETERMINE THE SPOT RATES AS OF EACH
REVALUATION DATE TO BE USED FOR CALCULATING THE DOLLAR EQUIVALENT OF ANY
PARTICULAR AMOUNTS HEREIN SPECIFIED THAT ARE DENOMINATED IN ALTERNATE
CURRENCIES.  SUCH SPOT RATES SHALL BECOME EFFECTIVE AS OF SUCH REVALUATION DATE
AND SHALL BE THE SPOT RATES EMPLOYED IN CONVERTING ANY AMOUNTS BETWEEN THE
APPLICABLE CURRENCIES UNTIL THE NEXT REVALUATION DATE TO OCCUR.  EXCEPT FOR
PURPOSES OF FINANCIAL STATEMENTS DELIVERED BY THE BORROWERS HEREUNDER OR
CALCULATING FINANCIAL COVENANTS HEREUNDER OR EXCEPT AS OTHERWISE PROVIDED
HEREIN, THE APPLICABLE AMOUNT OF ANY CURRENCY (OTHER THAN DOLLARS) FOR PURPOSES
OF THE LOAN DOCUMENTS SHALL BE SUCH DOLLAR EQUIVALENT AMOUNT AS SO DETERMINED BY
THE ADMINISTRATIVE AGENT.

 

(B)           WHEREVER IN THIS AGREEMENT IN CONNECTION WITH A BORROWING,
CONVERSION, CONTINUATION OR PREPAYMENT OF A FIXED PERIOD EURODOLLAR LOAN, AN
AMOUNT, SUCH AS A REQUIRED MINIMUM OR MULTIPLE AMOUNT, IS EXPRESSED IN DOLLARS,
BUT SUCH BORROWING OR FIXED PERIOD EURODOLLAR LOAN IS DENOMINATED IN AN
ALTERNATE CURRENCY, SUCH AMOUNT SHALL BE THE RELEVANT ALTERNATE CURRENCY
EQUIVALENT OF SUCH DOLLAR AMOUNT (ROUNDED TO THE NEAREST UNIT OF SUCH ALTERNATE
CURRENCY, WITH 0.5 OF A UNIT BEING ROUNDED UPWARD), AS DETERMINED BY THE
ADMINISTRATIVE AGENT.

 

1.06        TIMES OF DAY.  UNLESS OTHERWISE SPECIFIED, ALL REFERENCES HEREIN TO
TIMES OF DAY SHALL BE REFERENCES TO EASTERN TIME (DAYLIGHT OR STANDARD, AS
APPLICABLE).

 

ARTICLE II.

THE COMMITMENTS AND BORROWINGS

 

2.01        REVOLVING LOANS.  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
HEREIN, EACH LENDER SEVERALLY AGREES TO MAKE REVOLVING LOANS TO THE BORROWERS
FROM TIME TO TIME, ON ANY BUSINESS DAY DURING THE AVAILABILITY PERIOD, IN AN
AGGREGATE AMOUNT NOT TO EXCEED AT ANY TIME OUTSTANDING THE AMOUNT OF SUCH
LENDER’S COMMITMENT; PROVIDED THAT, AFTER GIVING EFFECT TO ANY REVOLVING LOAN,
(I) THE TOTAL REVOLVING CREDIT EXPOSURE DOES NOT EXCEED THE LINE CAP, AND
(II) THE AGGREGATE AMOUNT OF SUCH LENDER’S REVOLVING CREDIT EXPOSURE DOES NOT
EXCEED SUCH LENDER’S COMMITMENT.  WITHIN THE LIMITS OF EACH LENDER’S COMMITMENT,
AND SUBJECT TO THE OTHER TERMS AND CONDITIONS HEREOF, THE BORROWERS MAY BORROW
UNDER THIS SECTION 2.01, PREPAY UNDER SECTION 2.05, AND REBORROW UNDER THIS
SECTION 2.01.  REVOLVING LOANS MAY BE BASE RATE LOANS, FIXED PERIOD EURODOLLAR
LOANS OR DAILY FLOATING EURODOLLAR LOANS, AS FURTHER PROVIDED HEREIN.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, EACH LENDER MAY, AT ITS OPTION,
MAKE REVOLVING LOANS AVAILABLE TO ANY NON-U.S. BORROWER BY CAUSING ANY FOREIGN
OR DOMESTIC BRANCH OR AFFILIATE OF SUCH LENDER TO MAKE SUCH REVOLVING LOANS;
PROVIDED, THAT ANY EXERCISE OF SUCH OPTION SHALL NOT AFFECT THE OBLIGATION OF
SUCH NON-U.S. BORROWER TO REPAY SUCH REVOLVING LOAN IN ACCORDANCE WITH THE TERMS
OF THIS AGREEMENT AND TO COMPLY WITH ALL OTHER TERMS AND CONDITIONS OF THIS
AGREEMENT.

 

2.02        BORROWINGS, CONVERSIONS AND CONTINUATIONS OF REVOLVING LOANS.

 

(A)           EACH REVOLVING LOAN, EACH CONVERSION OF REVOLVING LOANS FROM ONE
INTEREST RATE TYPE TO ANOTHER, AND EACH CONTINUATION OF FIXED PERIOD EURODOLLAR
LOANS SHALL BE MADE UPON A BORROWER’S IRREVOCABLE NOTICE TO THE ADMINISTRATIVE
AGENT, WHICH MAY BE GIVEN BY TELEPHONE.  EACH SUCH NOTICE MUST BE RECEIVED BY
THE ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M. (I) THREE BUSINESS DAYS PRIOR
TO THE

 

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REQUESTED DATE OF ANY BORROWING OF, CONVERSION TO OR CONTINUATION OF FIXED
PERIOD EURODOLLAR LOANS OR OF ANY CONVERSION OF FIXED PERIOD EURODOLLAR LOANS TO
BASE RATE LOANS, (II) ONE BUSINESS DAY PRIOR TO THE REQUESTED DATE OF ANY
BORROWING OF, CONVERSION TO OR CONTINUATION OF DAILY FLOATING EURODOLLAR LOANS
OR OF ANY CONVERSION OF DAILY FLOATING EURODOLLAR LOANS TO BASE RATE LOANS AND
(III) ON THE REQUESTED DATE OF ANY BORROWING OF BASE RATE LOANS.  EACH
TELEPHONIC NOTICE BY ANY BORROWER PURSUANT TO THIS SECTION 2.02(A) MUST BE
CONFIRMED PROMPTLY BY DELIVERY TO THE ADMINISTRATIVE AGENT OF A WRITTEN
REVOLVING LOAN NOTICE, APPROPRIATELY COMPLETED AND SIGNED BY A RESPONSIBLE
OFFICER OF THE REQUESTING BORROWER.  EACH BORROWING OF, CONVERSION TO OR
CONTINUATION OF FIXED PERIOD EURODOLLAR LOANS OR DAILY FLOATING EURODOLLAR LOAN
SHALL BE IN A PRINCIPAL AMOUNT OF $5,000,000 OR A WHOLE MULTIPLE OF $1,000,000
IN EXCESS THEREOF.  EXCEPT AS PROVIDED IN SECTION 2.03(C), EACH BORROWING OF OR
CONVERSION TO BASE RATE LOANS SHALL BE IN A PRINCIPAL AMOUNT OF $500,000 OR A
WHOLE MULTIPLE OF $100,000 IN EXCESS THEREOF.  EACH REVOLVING LOAN NOTICE
(WHETHER TELEPHONIC OR WRITTEN) SHALL SPECIFY (I) WHETHER SUCH BORROWER IS
REQUESTING A REVOLVING LOAN, A CONVERSION OF REVOLVING LOANS FROM ONE INTEREST
RATE TYPE TO THE OTHER, OR A CONTINUATION OF FIXED PERIOD EURODOLLAR LOANS,
(II) THE REQUESTED DATE OF THE REVOLVING LOAN, CONVERSION OR CONTINUATION, AS
THE CASE MAY BE (WHICH SHALL BE A BUSINESS DAY), (III) THE PRINCIPAL AMOUNT OF
REVOLVING LOANS TO BE BORROWED, CONVERTED OR CONTINUED, (IV) THE INTEREST RATE
TYPE OF REVOLVING LOANS TO BE BORROWED OR TO WHICH EXISTING REVOLVING LOANS ARE
TO BE CONVERTED OR CONTINUED AND (V) IF APPLICABLE, THE DURATION OF THE INTEREST
PERIOD WITH RESPECT THERETO. IF THE APPLICABLE BORROWER FAILS TO SPECIFY A
CURRENCY TYPE OF A NEW REVOLVING LOAN IN A REVOLVING LOAN NOTICE, THEN THE
REVOLVING LOAN SHALL BE MADE IN DOLLARS.  IF THE APPLICABLE BORROWER FAILS TO
SPECIFY AN INTEREST RATE TYPE OF REVOLVING LOAN IN A REVOLVING LOAN NOTICE OR IF
SUCH BORROWER FAILS TO GIVE A TIMELY NOTICE REQUESTING A CONVERSION OR
CONTINUATION, THEN THE APPLICABLE REVOLVING LOANS SHALL BE MADE AS, OR CONVERTED
TO, DAILY FLOATING EURODOLLAR LOANS; PROVIDED, HOWEVER, THAT IN THE CASE OF A
FAILURE TO TIMELY REQUEST A CONTINUATION OF FIXED PERIOD EURODOLLAR LOANS
DENOMINATED IN AN ALTERNATE CURRENCY, SUCH LOANS SHALL BE CONTINUED AS FIXED
PERIOD EURODOLLAR LOANS IN THEIR ORIGINAL CURRENCY WITH AN INTEREST PERIOD OF
ONE MONTH.  ANY SUCH AUTOMATIC CONVERSION TO DAILY FLOATING EURODOLLAR LOANS
SHALL BE EFFECTIVE AS OF THE LAST DAY OF THE INTEREST PERIOD THEN IN EFFECT WITH
RESPECT TO THE APPLICABLE FIXED PERIOD EURODOLLAR LOANS.  IF THE APPLICABLE
BORROWER REQUESTS A REVOLVING LOAN OF, CONVERSION TO, OR CONTINUATION OF FIXED
PERIOD EURODOLLAR LOANS IN ANY SUCH REVOLVING LOAN NOTICE, BUT FAILS TO SPECIFY
AN INTEREST PERIOD, IT WILL BE DEEMED TO HAVE SPECIFIED AN INTEREST PERIOD OF
ONE MONTH.  FIXED PERIOD EURODOLLAR LOANS DENOMINATED IN AN ALTERNATE CURRENCY
MAY NOT BE CONVERTED TO A DIFFERENT INTEREST RATE TYPE.  NO REVOLVING LOAN MAY
BE CONVERTED INTO OR CONTINUED AS A REVOLVING LOAN DENOMINATED IN A DIFFERENT
CURRENCY, BUT INSTEAD MUST BE PREPAID IN THE ORIGINAL CURRENCY OF SUCH REVOLVING
LOAN AND REBORROWED IN THE OTHER CURRENCY.

 

(B)           FOLLOWING RECEIPT OF A REVOLVING LOAN NOTICE, THE ADMINISTRATIVE
AGENT SHALL PROMPTLY NOTIFY EACH LENDER OF THE AMOUNT OF ITS APPLICABLE
PERCENTAGE OF THE APPLICABLE REVOLVING LOANS (AND THE OF THE CURRENCY OF SUCH
LOANS), AND IF NO TIMELY NOTICE OF A CONVERSION OR CONTINUATION IS PROVIDED BY
THE BORROWERS, THE ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY EACH LENDER OF THE
DETAILS OF ANY AUTOMATIC CONVERSION TO BASE RATE LOANS DESCRIBED IN THE
PRECEDING SUBSECTION.  IN THE CASE OF A REVOLVING LOAN, EACH LENDER SHALL MAKE
THE AMOUNT OF ITS REVOLVING LOAN AVAILABLE TO THE ADMINISTRATIVE AGENT IN
IMMEDIATELY AVAILABLE FUNDS AT THE ADMINISTRATIVE AGENT’S OFFICE NOT LATER THAN
1:00 P.M. IN THE CASE OF A LOAN DENOMINATED IN DOLLARS, AND NOT LATER THAN THE
APPLICABLE TIME SPECIFIED BY THE ADMINISTRATIVE AGENT, IN THE CASE OF AN
ALTERNATE CURRENCY LOAN, IN EACH CASE ON THE BUSINESS DAY SPECIFIED IN THE
APPLICABLE REVOLVING LOAN NOTICE.  UPON SATISFACTION OF THE APPLICABLE
CONDITIONS SET FORTH IN ARTICLE IV (AND, IF SUCH BORROWING IS THE INITIAL
BORROWING, SECTION 4.01), THE ADMINISTRATIVE AGENT SHALL MAKE ALL FUNDS SO
RECEIVED AVAILABLE TO THE BORROWERS IN LIKE FUNDS AS RECEIVED BY THE
ADMINISTRATIVE AGENT BY WIRE TRANSFER OF SUCH FUNDS TO THE ACCOUNT SPECIFIED BY
THE APPLICABLE BORROWER.

 

(c)           Except as otherwise provided herein, a Fixed Period Eurodollar
Loan may be continued or converted only on the last day of an Interest Period
for such Loan.  If during the existence of a Default the Required Lenders have
determined in their sole discretion not to permit such conversion or
continuation, then no Loans may be converted to or continued as Fixed Period
Eurodollar Loans or Daily Floating Eurodollar Loans.

 

 

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(D)           THE ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY THE BORROWERS AND
THE LENDERS OF THE INTEREST RATE APPLICABLE TO ANY DAILY FLOATING EURODOLLAR
LOANS OR ANY INTEREST PERIOD FOR FIXED PERIOD EURODOLLAR LOANS UPON
DETERMINATION OF SUCH INTEREST RATE.  AT ANY TIME THAT BASE RATE LOANS ARE
OUTSTANDING, THE ADMINISTRATIVE AGENT SHALL NOTIFY THE BORROWERS AND THE LENDERS
OF ANY CHANGE IN CITIBANK, N.A.’S PRIME RATE USED IN DETERMINING THE BASE RATE
PROMPTLY FOLLOWING THE PUBLIC ANNOUNCEMENT OF SUCH CHANGE.

 

(E)           AFTER GIVING EFFECT TO ALL REVOLVING LOANS, ALL CONVERSIONS OF
REVOLVING LOANS FROM ONE INTEREST RATE TYPE TO THE OTHER, AND ALL CONTINUATIONS
OF REVOLVING LOANS AS THE SAME INTEREST RATE TYPE, THERE SHALL NOT BE MORE THAN
TEN (10) INTEREST PERIODS IN EFFECT WITH RESPECT TO REVOLVING LOANS.

 

2.03        SWINGLINE LOANS.

 

(A)           THE SWINGLINE.  SUBJECT TO THE TERMS AND CONDITIONS SET FORTH
HEREIN, THE SWINGLINE LENDER AGREES, IN RELIANCE UPON THE AGREEMENTS OF THE
OTHER LENDERS SET FORTH IN THIS SECTION 2.03, TO MAKE SWINGLINE LOANS (EACH SUCH
LOAN, A “SWINGLINE LOAN”) TO THE BORROWERS IN DOLLARS FROM TIME TO TIME ON ANY
BUSINESS DAY DURING THE AVAILABILITY PERIOD IN AN AGGREGATE AMOUNT NOT TO EXCEED
AT ANY TIME OUTSTANDING THE AMOUNT OF THE SWINGLINE SUBLIMIT, NOTWITHSTANDING
THE FACT THAT SUCH SWINGLINE LOANS, WHEN AGGREGATED WITH SUCH LENDER’S
APPLICABLE PERCENTAGE OF LETTER OF CREDIT EXPOSURE THEN OUTSTANDING AND THE
APPLICABLE PERCENTAGE OF THE OUTSTANDING AMOUNT OF REVOLVING LOANS OF THE LENDER
ACTING AS SWINGLINE LENDER, MAY EXCEED THE AMOUNT OF SUCH LENDER’S COMMITMENT;
PROVIDED, HOWEVER, THAT AFTER GIVING EFFECT TO ANY SWINGLINE LOAN, (I) THE TOTAL
REVOLVING CREDIT EXPOSURE DOES NOT EXCEED THE LINE CAP AND (II) THE AGGREGATE
AMOUNT OF SUCH LENDER’S REVOLVING CREDIT EXPOSURE DOES NOT EXCEED SUCH LENDER’S
COMMITMENT, AND PROVIDED, FURTHER, THAT THE APPLICABLE BORROWER SHALL NOT USE
THE PROCEEDS OF ANY SWINGLINE LOAN TO REFINANCE ANY OUTSTANDING SWINGLINE LOAN. 
WITHIN THE FOREGOING LIMITS, AND SUBJECT TO THE OTHER TERMS AND CONDITIONS
HEREOF, THE BORROWERS MAY BORROW UNDER THIS SECTION 2.03, PREPAY UNDER
SECTION 2.05, AND REBORROW UNDER THIS SECTION 2.03.  EACH SWINGLINE LOAN SHALL
BE EITHER A BASE RATE LOAN OR A DAILY FLOATING EURODOLLAR LOAN AS SELECTED BY
THE APPLICABLE BORROWER.  IMMEDIATELY UPON THE MAKING OF A SWINGLINE LOAN, EACH
LENDER SHALL BE DEEMED TO, AND HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES TO,
PURCHASE FROM THE SWINGLINE LENDER A RISK PARTICIPATION IN SUCH SWINGLINE LOAN
IN AN AMOUNT EQUAL TO THE PRODUCT OF SUCH LENDER’S APPLICABLE PERCENTAGE TIMES
THE AMOUNT OF SUCH SWINGLINE LOAN.  NOTWITHSTANDING THE FOREGOING AND SUBJECT TO
SUBSECTION (C) BELOW, NO LENDER HEREUNDER, OTHER THAN THE SWINGLINE LENDER,
SHALL BE REQUIRED TO MAKE A DAILY FLOATING EURODOLLAR LOAN.

 

(B)           BORROWING PROCEDURES.  EACH SWINGLINE BORROWING SHALL BE MADE UPON
THE APPLICABLE BORROWER’S IRREVOCABLE NOTICE TO THE SWINGLINE LENDER AND THE
ADMINISTRATIVE AGENT, WHICH MAY BE GIVEN BY TELEPHONE.  EACH SUCH NOTICE MUST BE
RECEIVED BY THE SWINGLINE LENDER AND THE ADMINISTRATIVE AGENT NOT LATER THAN
3:00 P.M. ON THE REQUESTED BORROWING DATE, AND SHALL SPECIFY (I) THE AMOUNT TO
BE BORROWED, WHICH SHALL BE A MINIMUM OF $1,000,000, AND (II) THE REQUESTED
BORROWING DATE, WHICH SHALL BE A BUSINESS DAY.  EACH SUCH TELEPHONIC NOTICE MUST
BE CONFIRMED PROMPTLY BY DELIVERY TO THE SWINGLINE LENDER AND THE ADMINISTRATIVE
AGENT OF A WRITTEN SWINGLINE LOAN NOTICE, WHICH SHALL SPECIFY (I) THE REQUESTED
DATE OF THE SWINGLINE BORROWING, (II) THE PRINCIPAL AMOUNT OF SWINGLINE LOAN AND
(III) THE DURATION WITH RESPECT THERETO.  PROMPTLY AFTER RECEIPT BY THE
SWINGLINE LENDER OF ANY TELEPHONIC SWINGLINE LOAN NOTICE, THE SWINGLINE LENDER
WILL CONFIRM WITH THE ADMINISTRATIVE AGENT (BY TELEPHONE OR IN WRITING) THAT THE
ADMINISTRATIVE AGENT HAS ALSO RECEIVED SUCH SWINGLINE LOAN NOTICE AND, IF NOT,
THE SWINGLINE LENDER WILL NOTIFY THE ADMINISTRATIVE AGENT (BY TELEPHONE OR IN
WRITING) OF THE CONTENTS THEREOF.  UNLESS THE SWINGLINE LENDER HAS RECEIVED
NOTICE (BY TELEPHONE OR IN WRITING) FROM THE ADMINISTRATIVE AGENT (INCLUDING AT
THE REQUEST OF ANY LENDER) PRIOR TO 4:00 P.M. ON THE DATE OF THE

 

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PROPOSED SWINGLINE BORROWING (A) DIRECTING THE SWINGLINE LENDER NOT TO MAKE SUCH
SWINGLINE LOAN AS A RESULT OF THE LIMITATIONS SET FORTH IN THE PROVISO TO THE
FIRST SENTENCE OF SECTION 2.03(A), OR (B) THAT ONE OR MORE OF THE APPLICABLE
CONDITIONS SPECIFIED IN ARTICLE IV IS NOT THEN SATISFIED, THEN, SUBJECT TO THE
TERMS AND CONDITIONS HEREOF, THE SWINGLINE LENDER WILL, NOT LATER THAN 4:00 P.M.
ON THE BORROWING DATE SPECIFIED IN SUCH SWINGLINE LOAN NOTICE, MAKE THE AMOUNT
OF ITS SWINGLINE LOAN AVAILABLE TO THE APPLICABLE BORROWER AT ITS OFFICE BY WIRE
TRANSFER TO THE ACCOUNT SPECIFIED BY THE APPLICABLE BORROWER.

 

(C)                                  REFINANCING OF SWINGLINE LOANS.

 

(I)            THE SWINGLINE LENDER, AT ANY TIME IN ITS SOLE AND ABSOLUTE
DISCRETION, MAY REQUEST, ON BEHALF OF THE BORROWERS (EACH OF WHICH HEREBY
IRREVOCABLY AUTHORIZES THE SWINGLINE LENDER TO SO REQUEST ON ITS BEHALF), THAT
EACH LENDER MAKE A BASE RATE LOAN OR FIXED PERIOD EURODOLLAR LOAN, AS
APPLICABLE, IN AN AMOUNT EQUAL TO SUCH LENDER’S APPLICABLE PERCENTAGE OF THE
AMOUNT OF SWINGLINE LOANS THEN OUTSTANDING.  SUCH REQUEST SHALL BE MADE IN
WRITING (WHICH WRITTEN REQUEST SHALL BE DEEMED TO BE A REVOLVING LOAN NOTICE FOR
PURPOSES HEREOF) AND IN ACCORDANCE WITH THE REQUIREMENTS OF SECTION 2.02,
WITHOUT REGARD TO THE MINIMUM AND MULTIPLES SPECIFIED THEREIN FOR THE PRINCIPAL
AMOUNT OF BASE RATE LOANS OR FIXED PERIOD EURODOLLAR LOANS, BUT SUBJECT TO THE
UNUTILIZED PORTION OF THE AGGREGATE COMMITMENTS AND THE CONDITIONS SET FORTH IN
SECTION 4.03.  THE SWINGLINE LENDER SHALL FURNISH THE APPLICABLE BORROWER WITH A
COPY OF THE APPLICABLE REVOLVING LOAN NOTICE PROMPTLY AFTER DELIVERING SUCH
NOTICE TO THE ADMINISTRATIVE AGENT.  EACH LENDER SHALL MAKE AN AMOUNT EQUAL TO
ITS APPLICABLE PERCENTAGE OF THE AMOUNT SPECIFIED IN SUCH REVOLVING LOAN NOTICE
AVAILABLE TO THE ADMINISTRATIVE AGENT IN IMMEDIATELY AVAILABLE FUNDS FOR THE
ACCOUNT OF THE SWINGLINE LENDER AT THE ADMINISTRATIVE AGENT’S OFFICE NOT LATER
THAN 1:00 P.M. ON THE DAY SPECIFIED IN SUCH REVOLVING LOAN NOTICE, WHEREUPON,
SUBJECT TO SECTION 2.03(C)(II), EACH LENDER THAT SO MAKES FUNDS AVAILABLE SHALL
BE DEEMED TO HAVE MADE A BASE RATE LOAN OR FIXED PERIOD EURODOLLAR LOAN, AS
APPLICABLE, TO THE APPLICABLE BORROWER IN SUCH AMOUNT.  THE ADMINISTRATIVE AGENT
SHALL REMIT THE FUNDS SO RECEIVED TO THE SWINGLINE LENDER.

 

(II)           IF FOR ANY REASON ANY SWINGLINE LOAN CANNOT BE REFINANCED BY SUCH
A REVOLVING LOAN IN ACCORDANCE WITH SECTION 2.03(C)(I), THE REQUEST FOR BASE
RATE LOANS OR FIXED PERIOD EURODOLLAR LOANS, AS APPLICABLE, SUBMITTED BY THE
SWINGLINE LENDER AS SET FORTH HEREIN SHALL BE DEEMED TO BE A REQUEST BY THE
SWINGLINE LENDER THAT EACH OF THE LENDERS FUND ITS RISK PARTICIPATION IN THE
RELEVANT SWINGLINE LOAN AND EACH LENDER’S PAYMENT TO THE ADMINISTRATIVE AGENT
FOR THE ACCOUNT OF THE SWINGLINE LENDER PURSUANT TO SECTION 2.03(C)(I) SHALL BE
DEEMED PAYMENT IN RESPECT OF SUCH PARTICIPATION.

 

(III)          IF ANY LENDER FAILS TO MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT
FOR THE ACCOUNT OF THE SWINGLINE LENDER ANY AMOUNT REQUIRED TO BE PAID BY SUCH
LENDER PURSUANT TO THE FOREGOING PROVISIONS OF THIS SECTION 2.03(C) BY THE TIME
SPECIFIED IN SECTION 2.03(C)(I), THE SWINGLINE LENDER SHALL BE ENTITLED TO
RECOVER FROM SUCH LENDER (ACTING THROUGH THE ADMINISTRATIVE AGENT), ON DEMAND,
SUCH AMOUNT WITH INTEREST THEREON FOR THE PERIOD FROM THE DATE SUCH PAYMENT IS
REQUIRED TO THE DATE ON WHICH SUCH PAYMENT IS IMMEDIATELY AVAILABLE TO THE
SWINGLINE LENDER AT A RATE PER ANNUM EQUAL TO THE GREATER OF THE FEDERAL FUNDS
RATE AND A RATE DETERMINED BY THE SWINGLINE LENDER IN ACCORDANCE WITH BANKING
INDUSTRY RULES ON INTERBANK COMPENSATION, PLUS ANY ADMINISTRATIVE, PROCESSING OR
SIMILAR FEES CUSTOMARILY CHARGED BY THE SWINGLINE LENDER IN CONNECTION WITH THE
FOREGOING.  IF SUCH LENDER PAYS SUCH AMOUNT (WITH INTEREST AND FEES AS
AFORESAID), THE AMOUNT SO PAID SHALL CONSTITUTE SUCH LENDER’S REVOLVING LOAN
INCLUDED IN THE RELEVANT BORROWING OR FUNDED PARTICIPATION IN THE RELEVANT
SWINGLINE LOAN, AS THE CASE MAY BE.  A CERTIFICATE OF THE SWINGLINE LENDER
SUBMITTED TO ANY LENDER (THROUGH THE ADMINISTRATIVE AGENT) WITH RESPECT TO ANY
AMOUNTS OWING UNDER THIS CLAUSE (III) SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.

 

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(IV)          EACH LENDER’S OBLIGATION TO MAKE REVOLVING LOANS OR TO PURCHASE
AND FUND RISK PARTICIPATIONS IN SWINGLINE LOANS PURSUANT TO THIS
SECTION 2.03(C) SHALL BE ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE AFFECTED BY
ANY CIRCUMSTANCE, INCLUDING (A) ANY SETOFF, COUNTERCLAIM, RECOUPMENT, DEFENSE OR
OTHER RIGHT WHICH SUCH LENDER MAY HAVE AGAINST THE SWINGLINE LENDER, THE
BORROWERS OR ANY OTHER PERSON FOR ANY REASON WHATSOEVER, (B) THE OCCURRENCE OR
CONTINUANCE OF A DEFAULT, OR (C) ANY OTHER OCCURRENCE, EVENT OR CONDITION,
WHETHER OR NOT SIMILAR TO ANY OF THE FOREGOING; PROVIDED, HOWEVER, THAT EACH
LENDER’S OBLIGATION TO MAKE REVOLVING LOANS PURSUANT TO THIS SECTION 2.03(C) IS
SUBJECT TO THE CONDITIONS SET FORTH IN SECTION 4.03.  NO SUCH FUNDING OF RISK
PARTICIPATIONS SHALL RELIEVE OR OTHERWISE IMPAIR THE OBLIGATION OF THE BORROWERS
TO REPAY SWINGLINE LOANS, TOGETHER WITH INTEREST AS PROVIDED HEREIN.

 

(D)                                 REPAYMENT OF PARTICIPATIONS.

 

(I)            AT ANY TIME AFTER ANY LENDER HAS PURCHASED AND FUNDED A RISK
PARTICIPATION IN A SWINGLINE LOAN, IF THE SWINGLINE LENDER RECEIVES ANY PAYMENT
ON ACCOUNT OF SUCH SWINGLINE LOAN, THE SWINGLINE LENDER WILL DISTRIBUTE TO SUCH
LENDER ITS APPLICABLE PERCENTAGE THEREOF IN THE SAME FUNDS AS THOSE RECEIVED BY
THE SWINGLINE LENDER.

 

(II)           IF ANY PAYMENT RECEIVED BY THE SWINGLINE LENDER IN RESPECT OF
PRINCIPAL OR INTEREST ON ANY SWINGLINE LOAN IS REQUIRED TO BE RETURNED BY THE
SWINGLINE LENDER UNDER ANY OF THE CIRCUMSTANCES DESCRIBED IN SECTION 10.05
(INCLUDING PURSUANT TO ANY SETTLEMENT ENTERED INTO BY THE SWINGLINE LENDER IN
ITS DISCRETION), EACH LENDER SHALL PAY TO THE SWINGLINE LENDER ITS APPLICABLE
PERCENTAGE THEREOF ON DEMAND OF THE ADMINISTRATIVE AGENT, PLUS INTEREST THEREON
FROM THE DATE OF SUCH DEMAND TO THE DATE SUCH AMOUNT IS RETURNED, AT A RATE PER
ANNUM EQUAL TO THE FEDERAL FUNDS RATE.  THE ADMINISTRATIVE AGENT WILL MAKE SUCH
DEMAND UPON THE REQUEST OF THE SWINGLINE LENDER.  THE OBLIGATIONS OF THE LENDERS
UNDER THIS CLAUSE SHALL SURVIVE THE PAYMENT IN FULL OF THE OBLIGATIONS AND THE
TERMINATION OF THIS AGREEMENT.

 

(E)           INTEREST FOR ACCOUNT OF SWINGLINE LENDER.  THE SWINGLINE LENDER
SHALL BE RESPONSIBLE FOR INVOICING THE BORROWERS FOR INTEREST ON THE SWINGLINE
LOANS.  UNTIL EACH LENDER FUNDS ITS BASE RATE LOAN OR FIXED PERIOD EURODOLLAR
LOAN, AS APPLICABLE, OR RISK PARTICIPATION PURSUANT TO THIS SECTION 2.03 TO
REFINANCE SUCH LENDER’S APPLICABLE PERCENTAGE OF ANY SWINGLINE LOAN, INTEREST IN
RESPECT OF SUCH APPLICABLE PERCENTAGE SHALL BE SOLELY FOR THE ACCOUNT OF THE
SWINGLINE LENDER.

 

2.04        LETTERS OF CREDIT.  (A) SUBJECT TO AND UPON THE TERMS AND CONDITIONS
HEREIN SET FORTH, AT ANY TIME AND FROM TIME TO TIME AFTER THE CLOSING DATE AND
PRIOR TO THE L/C MATURITY DATE, (I) ANY BORROWER MAY REQUEST THAT THE ISSUING
BANK ISSUE FOR THE ACCOUNT OF SUCH BORROWER A LETTER OF CREDIT OR LETTERS OF
CREDIT IN DOLLARS OR ANY APPROVED CURRENCY IN SUCH FORM AS MAY BE APPROVED BY
THE ISSUING BANK IN ITS REASONABLE DISCRETION.

 

NOTWITHSTANDING THE FOREGOING, (I) NO LETTER OF CREDIT SHALL BE ISSUED THE
STATED AMOUNT OF WHICH, WHEN ADDED TO THE LETTERS OF CREDIT OUTSTANDING AT SUCH
TIME, WOULD EXCEED THE LETTER OF CREDIT COMMITMENT THEN IN EFFECT; (II) NO
LETTER OF CREDIT SHALL BE ISSUED, AMENDED (TO INCREASE THE STATED AMOUNT
THEREOF), EXTENDED OR RENEWED IF, AFTER GIVING EFFECT TO SUCH ISSUANCE,
AMENDMENT, EXTENSION OR RENEWAL, THE TOTAL REVOLVING CREDIT EXPOSURE WOULD
EXCEED THE LINE CAP THEN IN EFFECT; (III) EACH LETTER OF CREDIT SHALL HAVE AN
EXPIRATION DATE OCCURRING NO LATER THAN ONE YEAR AFTER THE DATE OF ISSUANCE
THEREOF, UNLESS OTHERWISE AGREED UPON BY THE ADMINISTRATIVE AGENT AND THE
ISSUING BANK, PROVIDED THAT IN NO EVENT SHALL SUCH EXPIRATION DATE OCCUR LATER
THAN THE L/C MATURITY DATE; (IV) NO LETTER OF CREDIT SHALL BE

 

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ISSUED IF IT WOULD BE ILLEGAL UNDER ANY APPLICABLE LAW FOR THE BENEFICIARY OF
THE LETTER OF CREDIT TO HAVE A LETTER OF CREDIT ISSUED IN ITS FAVOR; AND (V) NO
LETTER OF CREDIT SHALL BE ISSUED BY AN ISSUING BANK AFTER IT HAS RECEIVED A
WRITTEN NOTICE FROM A BORROWER OR ANY LENDER STATING THAT A DEFAULT HAS OCCURRED
AND IS CONTINUING UNTIL SUCH TIME AS THE ISSUING BANK SHALL HAVE RECEIVED A
WRITTEN NOTICE OF (X) RESCISSION OF SUCH NOTICE FROM THE PARTY OR PARTIES
ORIGINALLY DELIVERING SUCH NOTICE OR (Y) THE WAIVER OF SUCH DEFAULT IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 10.01.

 

UPON AT LEAST ONE BUSINESS DAY’S PRIOR WRITTEN NOTICE (OR TELEPHONIC NOTICE
PROMPTLY CONFIRMED IN WRITING) TO THE ADMINISTRATIVE AGENT AND THE ISSUING BANK
(WHICH NOTICE THE ADMINISTRATIVE AGENT SHALL PROMPTLY TRANSMIT TO EACH OF THE
APPLICABLE LENDERS), THE BORROWERS SHALL HAVE THE RIGHT, ON ANY DAY, PERMANENTLY
TO TERMINATE OR REDUCE THE LETTER OF CREDIT COMMITMENT IN WHOLE OR IN PART,
PROVIDED THAT, AFTER GIVING EFFECT TO SUCH TERMINATION OR REDUCTION, THE LETTERS
OF CREDIT OUTSTANDING SHALL NOT EXCEED THE LETTER OF CREDIT COMMITMENT.

 

(B)                                 LETTER OF CREDIT REQUESTS.

 

(I)            WHENEVER A BORROWER DESIRES THAT A LETTER OF CREDIT BE ISSUED FOR
ITS ACCOUNT, IT SHALL GIVE THE ADMINISTRATIVE AGENT AND THE ISSUING BANK AT
LEAST FIVE (OR SUCH LESSER NUMBER AS MAY BE AGREED UPON BY THE ADMINISTRATIVE
AGENT AND THE ISSUING BANK) BUSINESS DAYS’ WRITTEN NOTICE THEREOF.  EACH NOTICE
SHALL BE EXECUTED BY THE APPLICABLE BORROWER AND SHALL BE IN A FORM REASONABLY
ACCEPTABLE TO THE ISSUING BANK AND THE ADMINISTRATIVE AGENT (EACH A “LETTER OF
CREDIT REQUEST”).  THE ADMINISTRATIVE AGENT SHALL PROMPTLY TRANSMIT COPIES OF
EACH LETTER OF CREDIT REQUEST TO EACH LENDER.

 

(II)           THE MAKING OF EACH LETTER OF CREDIT REQUEST SHALL BE DEEMED TO BE
A REPRESENTATION AND WARRANTY BY THE APPLICABLE BORROWER THAT THE LETTER OF
CREDIT MAY BE ISSUED IN ACCORDANCE WITH, AND WILL NOT VIOLATE THE REQUIREMENTS
OF, SECTION 2.04(A).

 

(C)                                  LETTER OF CREDIT PARTICIPATIONS.

 

(I)            IMMEDIATELY UPON THE ISSUANCE BY THE ISSUING BANK OF ANY LETTER
OF CREDIT, THE ISSUING BANK SHALL BE DEEMED TO HAVE SOLD AND TRANSFERRED TO EACH
OTHER LENDER THAT HAS A COMMITMENT (EACH SUCH OTHER LENDER, IN ITS CAPACITY
UNDER THIS SECTION 2.04(C), AN “L/C PARTICIPANT”), AND EACH SUCH L/C PARTICIPANT
SHALL BE DEEMED IRREVOCABLY AND UNCONDITIONALLY TO HAVE PURCHASED AND RECEIVED
FROM THE ISSUING BANK, WITHOUT RECOURSE OR WARRANTY, AN UNDIVIDED INTEREST AND
PARTICIPATION (EACH AN “L/C PARTICIPATION”), TO THE EXTENT OF SUCH L/C
PARTICIPANT’S APPLICABLE PERCENTAGE OF SUCH LETTER OF CREDIT, EACH SUBSTITUTE
LETTER OF CREDIT, EACH DRAWING MADE THEREUNDER AND THE OBLIGATIONS OF ANY
BORROWER UNDER THIS AGREEMENT WITH RESPECT THERETO, AND ANY SECURITY THEREFOR OR
GUARANTY PERTAINING THERETO (ALTHOUGH LETTER OF CREDIT FEES WILL BE PAID
DIRECTLY TO THE ADMINISTRATIVE AGENT FOR THE RATABLE ACCOUNT OF THE L/C
PARTICIPANTS AS PROVIDED IN SECTION 2.09(B) AND THE L/C PARTICIPANTS SHALL HAVE
NO RIGHT TO RECEIVE ANY PORTION OF ANY FRONTING FEES).

 

(II)           IN DETERMINING WHETHER TO PAY UNDER ANY LETTER OF CREDIT, THE
ISSUING BANK SHALL HAVE NO OBLIGATION RELATIVE TO THE L/C PARTICIPANTS OTHER
THAN TO CONFIRM THAT ANY DOCUMENTS REQUIRED TO BE DELIVERED UNDER SUCH LETTER OF
CREDIT HAVE BEEN DELIVERED AND THAT THEY APPEAR TO COMPLY ON THEIR FACE WITH THE
REQUIREMENTS OF SUCH LETTER OF CREDIT.  ANY ACTION TAKEN OR OMITTED TO BE TAKEN
BY THE ISSUING BANK UNDER OR IN CONNECTION WITH ANY LETTER OF CREDIT ISSUED BY
IT, IF TAKEN OR OMITTED IN THE ABSENCE OF GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, SHALL NOT CREATE FOR THE ISSUING BANK ANY RESULTING LIABILITY.

 

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(III)          IN THE EVENT THAT THE ISSUING BANK MAKES ANY PAYMENT UNDER ANY
LETTER OF CREDIT ISSUED BY IT AND THE BORROWERS SHALL NOT HAVE REPAID SUCH
AMOUNT IN FULL TO THE RESPECTIVE ISSUING BANK PURSUANT TO SECTION 2.04(D), THE
ISSUING BANK SHALL PROMPTLY NOTIFY THE ADMINISTRATIVE AGENT AND EACH L/C
PARTICIPANT OF SUCH FAILURE, AND EACH L/C PARTICIPANT SHALL PROMPTLY AND
UNCONDITIONALLY PAY TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE ISSUING
BANK, THE AMOUNT OF SUCH L/C PARTICIPANT’S APPLICABLE PERCENTAGE OF SUCH
UNREIMBURSED PAYMENT IN DOLLARS AND IN IMMEDIATELY AVAILABLE FUNDS; PROVIDED,
HOWEVER, THAT NO L/C PARTICIPANT SHALL BE OBLIGATED TO PAY TO THE ADMINISTRATIVE
AGENT FOR THE ACCOUNT OF THE ISSUING BANK ITS APPLICABLE PERCENTAGE OF SUCH
UNREIMBURSED AMOUNT ARISING FROM ANY WRONGFUL PAYMENT MADE BY THE ISSUING BANK
UNDER A LETTER OF CREDIT AS A RESULT OF ACTS OR OMISSIONS CONSTITUTING WILLFUL
MISCONDUCT OR GROSS NEGLIGENCE ON THE PART OF THE ISSUING BANK.  IF THE ISSUING
BANK SO NOTIFIES, PRIOR TO 11:00 A.M. (NEW YORK TIME) ON ANY BUSINESS DAY, ANY
L/C PARTICIPANT REQUIRED TO FUND A PAYMENT UNDER A LETTER OF CREDIT, SUCH L/C
PARTICIPANT SHALL MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF
THE ISSUING BANK SUCH L/C PARTICIPANT’S APPLICABLE PERCENTAGE OF THE AMOUNT OF
SUCH PAYMENT ON SUCH BUSINESS DAY IN IMMEDIATELY AVAILABLE FUNDS.  IF AND TO THE
EXTENT SUCH L/C PARTICIPANT SHALL NOT HAVE SO MADE ITS APPLICABLE PERCENTAGE OF
THE AMOUNT OF SUCH PAYMENT AVAILABLE TO THE ADMINISTRATIVE AGENT, FOR THE
ACCOUNT OF THE ISSUING BANK, SUCH L/C PARTICIPANT AGREES TO PAY TO THE
ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE ISSUING BANK, FORTHWITH ON DEMAND,
SUCH AMOUNT, TOGETHER WITH INTEREST THEREON FOR EACH DAY FROM SUCH DATE UNTIL
THE DATE SUCH AMOUNT IS PAID TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE
ISSUING BANK AT A RATE EQUAL TO THE GREATER OF (X) THE FEDERAL FUNDS EFFECTIVE
RATE AND (Y) A RATE DETERMINED BY THE ADMINISTRATIVE AGENT IN ACCORDANCE WITH
BANKING INDUSTRY RULES ON INTERBANK COMPENSATION.  THE FAILURE OF ANY L/C
PARTICIPANT TO MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF
THE ISSUING BANK ITS APPLICABLE PERCENTAGE OF ANY PAYMENT UNDER ANY LETTER OF
CREDIT SHALL NOT RELIEVE ANY OTHER L/C PARTICIPANT OF ITS OBLIGATION HEREUNDER
TO MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE ISSUING
BANK ITS APPLICABLE PERCENTAGE OF ANY PAYMENT UNDER SUCH LETTER OF CREDIT ON THE
DATE REQUIRED, AS SPECIFIED ABOVE, BUT, EXCEPT AS PROVIDED IN SECTION 2.19, NO
L/C PARTICIPANT SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY OTHER L/C
PARTICIPANT TO MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT SUCH OTHER L/C
PARTICIPANT’S APPLICABLE PERCENTAGE OF ANY SUCH PAYMENT.

 

(IV)          WHENEVER THE ISSUING BANK RECEIVES A PAYMENT IN RESPECT OF AN
UNPAID REIMBURSEMENT OBLIGATION AS TO WHICH THE ADMINISTRATIVE AGENT HAS
RECEIVED FOR THE ACCOUNT OF THE ISSUING BANK ANY PAYMENTS FROM THE L/C
PARTICIPANTS PURSUANT TO PARAGRAPH (III) ABOVE, THE ISSUING BANK SHALL PAY TO
THE ADMINISTRATIVE AGENT AND THE ADMINISTRATIVE AGENT SHALL PROMPTLY PAY TO EACH
L/C PARTICIPANT THAT HAS PAID ITS APPLICABLE PERCENTAGE OF SUCH REIMBURSEMENT
OBLIGATION, IN DOLLARS AND IN IMMEDIATELY AVAILABLE FUNDS, AN AMOUNT EQUAL TO
SUCH L/C PARTICIPANT’S SHARE (BASED UPON THE PROPORTIONATE AGGREGATE AMOUNT
ORIGINALLY FUNDED BY SUCH L/C PARTICIPANT TO THE AGGREGATE AMOUNT FUNDED BY ALL
L/C PARTICIPANTS) OF THE PRINCIPAL AMOUNT OF SUCH REIMBURSEMENT OBLIGATION AND
INTEREST THEREON ACCRUING AFTER THE PURCHASE OF THE RESPECTIVE L/C
PARTICIPATIONS.

 

(V)           THE OBLIGATIONS OF THE L/C PARTICIPANTS TO MAKE PAYMENTS TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE ISSUING BANK WITH RESPECT TO LETTERS
OF CREDIT SHALL BE IRREVOCABLE AND NOT SUBJECT TO COUNTERCLAIM, SET-OFF OR OTHER
DEFENSE OR ANY OTHER QUALIFICATION OR EXCEPTION WHATSOEVER AND SHALL BE MADE IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT UNDER ALL
CIRCUMSTANCES, INCLUDING UNDER ANY OF THE FOLLOWING CIRCUMSTANCES:

 

(A)          ANY LACK OF VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS;

 

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(B)           THE EXISTENCE OF ANY CLAIM, SET-OFF, DEFENSE OR OTHER RIGHT THAT
ANY BORROWER MAY HAVE AT ANY TIME AGAINST A BENEFICIARY NAMED IN A LETTER OF
CREDIT, ANY TRANSFEREE OF ANY LETTER OF CREDIT (OR ANY PERSON FOR WHOM ANY SUCH
TRANSFEREE MAY BE ACTING), THE ADMINISTRATIVE AGENT, THE ISSUING BANK, ANY
LENDER OR OTHER PERSON, WHETHER IN CONNECTION WITH THIS AGREEMENT, ANY LETTER OF
CREDIT, THE TRANSACTIONS CONTEMPLATED HEREIN OR ANY UNRELATED TRANSACTIONS
(INCLUDING ANY UNDERLYING TRANSACTION BETWEEN ANY BORROWER AND THE BENEFICIARY
NAMED IN ANY SUCH LETTER OF CREDIT);

 

(C)           ANY DRAFT, CERTIFICATE OR ANY OTHER DOCUMENT PRESENTED UNDER ANY
LETTER OF CREDIT PROVING TO BE FORGED, FRAUDULENT, INVALID OR INSUFFICIENT IN
ANY RESPECT OR ANY STATEMENT THEREIN BEING UNTRUE OR INACCURATE IN ANY RESPECT;

 

(D)          THE SURRENDER OR IMPAIRMENT OF ANY SECURITY FOR THE PERFORMANCE OR
OBSERVANCE OF ANY OF THE TERMS OF ANY OF THE LOAN DOCUMENTS; OR

 

(E)           THE OCCURRENCE OF ANY DEFAULT;

 

PROVIDED, HOWEVER, THAT NO L/C PARTICIPANT SHALL BE OBLIGATED TO PAY TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE ISSUING BANK ITS APPLICABLE
PERCENTAGE OF ANY UNREIMBURSED AMOUNT ARISING FROM ANY WRONGFUL PAYMENT MADE BY
THE ISSUING BANK UNDER A LETTER OF CREDIT AS A RESULT OF ACTS OR OMISSIONS
CONSTITUTING WILLFUL MISCONDUCT OR GROSS NEGLIGENCE ON THE PART OF THE ISSUING
BANK.

 

(D)                                 AGREEMENT TO REPAY LETTER OF CREDIT
DRAWINGS.

 

(I)            EACH BORROWER HEREBY AGREES TO REIMBURSE THE ISSUING BANK, BY
MAKING PAYMENT IN DOLLARS OR THE APPLICABLE APPROVED CURRENCY TO THE
ADMINISTRATIVE AGENT IN IMMEDIATELY AVAILABLE FUNDS FOR ANY PAYMENT OR
DISBURSEMENT MADE BY THE ISSUING BANK UNDER ANY LETTER OF CREDIT (THE AMOUNT OF
EACH SUCH AMOUNT SO PAID UNTIL REIMBURSED, AN “UNPAID DRAWING”) IMMEDIATELY
AFTER, AND IN ANY EVENT WITHIN TWO BUSINESS DAYS OF, SUCH PAYMENT, WITH INTEREST
ON THE AMOUNT SO PAID OR DISBURSED BY THE ISSUING BANK, TO THE EXTENT NOT
REIMBURSED PRIOR TO 5:00 P.M. (NEW YORK TIME) ON THE SECOND BUSINESS DAY
FOLLOWING SUCH PAYMENT OR DISBURSEMENT, FROM AND INCLUDING THE DATE PAID OR
DISBURSED TO BUT EXCLUDING THE DATE THE ISSUING BANK IS REIMBURSED THEREFOR AT A
RATE PER ANNUM THAT SHALL AT ALL TIMES BE THE APPLICABLE RATE FOR BASE RATE
LOANS PLUS THE BASE RATE AS IN EFFECT FROM TIME TO TIME, PROVIDED THAT,
NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, (I) UNLESS
THE APPLICABLE BORROWER SHALL HAVE NOTIFIED THE ADMINISTRATIVE AGENT AND THE
ISSUING BANK PRIOR TO 10:00 A.M. (NEW YORK TIME) ON THE DATE OF SUCH DRAWING
THAT SUCH BORROWER INTENDS TO REIMBURSE THE ISSUING BANK FOR THE AMOUNT OF SUCH
DRAWING WITH FUNDS OTHER THAN THE PROCEEDS OF LOANS, SUCH BORROWER BE SHALL BE
DEEMED TO HAVE GIVEN A REQUEST FOR BORROWING REQUESTING THAT THE LENDERS WITH
COMMITMENTS MAKE REVOLVING LOANS (WHICH SHALL BE BASE RATE LOANS) ON THE DATE ON
WHICH SUCH DRAWING IS HONORED IN AN AMOUNT EQUAL TO THE AMOUNT OF SUCH DRAWING
AND (II) THE ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY EACH RELEVANT L/C
PARTICIPANT OF SUCH DRAWING AND THE AMOUNT OF ITS REVOLVING LOAN TO BE MADE IN
RESPECT THEREOF, AND, SUBJECT TO THE CONDITIONS SET FORTH IN SECTION 2.01, EACH
L/C PARTICIPANT SHALL BE IRREVOCABLY OBLIGATED TO MAKE A REVOLVING LOAN TO SUCH
BORROWER IN THE MANNER DEEMED TO HAVE BEEN REQUESTED IN THE AMOUNT OF ITS
APPLICABLE PERCENTAGE OF THE APPLICABLE UNPAID DRAWING BY 12:00 NOON (NEW YORK
TIME) ON SUCH BUSINESS DAY BY MAKING THE AMOUNT OF SUCH REVOLVING LOAN AVAILABLE
TO THE ADMINISTRATIVE AGENT.  SUCH REVOLVING LOANS SHALL BE MADE WITHOUT REGARD
TO THE MINIMUM BORROWING AMOUNT FOR BASE RATE LOANS.  THE ADMINISTRATIVE AGENT
SHALL USE THE PROCEEDS OF SUCH REVOLVING LOANS SOLELY FOR PURPOSE OF REIMBURSING
THE ISSUING BANK FOR THE RELATED UNPAID DRAWING.

 

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(II)           THE OBLIGATIONS OF EACH BORROWER UNDER THIS SECTION 2.04(D) TO
REIMBURSE THE ISSUING BANK WITH RESPECT TO UNPAID DRAWINGS (INCLUDING, IN EACH
CASE, INTEREST THEREON) SHALL BE ABSOLUTE AND UNCONDITIONAL UNDER ANY AND ALL
CIRCUMSTANCES AND IRRESPECTIVE OF ANY SET-OFF, COUNTERCLAIM OR DEFENSE TO
PAYMENT THAT ANY SUCH BORROWER OR ANY OTHER PERSON MAY HAVE OR HAVE HAD AGAINST
THE ISSUING BANK, THE ADMINISTRATIVE AGENT OR ANY LENDER (INCLUDING IN ITS
CAPACITY AS AN L/C PARTICIPANT), INCLUDING ANY DEFENSE BASED UPON THE FAILURE OF
ANY DRAWING UNDER A LETTER OF CREDIT TO CONFORM TO THE TERMS OF THE LETTER OF
CREDIT OR ANY NON-APPLICATION OR MISAPPLICATION BY THE BENEFICIARY OF THE
PROCEEDS OF SUCH DRAWING, PROVIDED THAT NO BORROWER SHALL BE OBLIGATED TO
REIMBURSE THE ISSUING BANK FOR ANY WRONGFUL PAYMENT MADE BY THE ISSUING BANK
UNDER THE LETTER OF CREDIT ISSUED BY IT AS A RESULT OF ACTS OR OMISSIONS
CONSTITUTING WILLFUL MISCONDUCT OR GROSS NEGLIGENCE ON THE PART OF THE ISSUING
BANK.

 

(E)           INCREASED COSTS.  IF AFTER THE DATE HEREOF, THE ADOPTION OF ANY
APPLICABLE LAW, RULE OR REGULATION, OR ANY CHANGE THEREIN, OR ANY CHANGE IN THE
INTERPRETATION OR ADMINISTRATION THEREOF BY ANY GOVERNMENTAL AUTHORITY, CENTRAL
BANK OR COMPARABLE AGENCY CHARGED WITH THE INTERPRETATION OR ADMINISTRATION
THEREOF, OR ACTUAL COMPLIANCE BY THE ISSUING BANK OR ANY L/C PARTICIPANT WITH
ANY REQUEST OR DIRECTIVE MADE OR ADOPTED AFTER THE DATE HEREOF (WHETHER OR NOT
HAVING THE FORCE OF LAW), BY ANY SUCH AUTHORITY, CENTRAL BANK OR COMPARABLE
AGENCY SHALL EITHER (A) IMPOSE, MODIFY OR MAKE APPLICABLE ANY RESERVE, DEPOSIT,
CAPITAL ADEQUACY OR SIMILAR REQUIREMENT AGAINST LETTERS OF CREDIT ISSUED BY THE
ISSUING BANK, OR ANY L/C PARTICIPANT’S L/C PARTICIPATION THEREIN, OR (B) IMPOSE
ON THE ISSUING BANK OR ANY L/C PARTICIPANT ANY OTHER CONDITIONS AFFECTING ITS
OBLIGATIONS UNDER THIS AGREEMENT IN RESPECT OF LETTERS OF CREDIT OR L/C
PARTICIPATIONS THEREIN OR ANY LETTER OF CREDIT OR SUCH L/C PARTICIPANT’S L/C
PARTICIPATION THEREIN, AND THE RESULT OF ANY OF THE FOREGOING IS TO INCREASE THE
COST TO THE ISSUING BANK OR SUCH L/C PARTICIPANT OF ISSUING, MAINTAINING OR
PARTICIPATING IN ANY LETTER OF CREDIT, OR TO REDUCE THE AMOUNT OF ANY SUM
RECEIVED OR RECEIVABLE BY THE ISSUING BANK OR SUCH L/C PARTICIPANT HEREUNDER
(OTHER THAN ANY SUCH INCREASE OR REDUCTION ATTRIBUTABLE TO TAXES) IN RESPECT OF
LETTERS OF CREDIT OR L/C PARTICIPATIONS THEREIN, THEN, PROMPTLY AFTER RECEIPT OF
WRITTEN DEMAND TO THE APPLICABLE BORROWER BY THE ISSUING BANK OR SUCH L/C
PARTICIPANT, AS THE CASE MAY BE, (A COPY OF WHICH NOTICE SHALL BE SENT BY THE
ISSUING BANK OR SUCH L/C PARTICIPANT TO THE ADMINISTRATIVE AGENT), SUCH BORROWER
SHALL PAY TO THE ISSUING BANK OR SUCH L/C PARTICIPANT SUCH ADDITIONAL AMOUNT OR
AMOUNTS AS WILL COMPENSATE THE ISSUING BANK OR SUCH L/C PARTICIPANT FOR SUCH
INCREASED COST OR REDUCTION, IT BEING UNDERSTOOD AND AGREED, HOWEVER, THAT THE
ISSUING BANK OR A L/C PARTICIPANT SHALL NOT BE ENTITLED TO SUCH COMPENSATION AS
A RESULT OF SUCH PERSON’S COMPLIANCE WITH, OR PURSUANT TO ANY REQUEST OR
DIRECTIVE TO COMPLY WITH, ANY SUCH LAW, RULE OR REGULATION AS IN EFFECT ON THE
DATE HEREOF.  A CERTIFICATE SUBMITTED TO THE APPLICABLE BORROWER BY THE RELEVANT
ISSUING BANK OR A L/C PARTICIPANT, AS THE CASE MAY BE, (A COPY OF WHICH
CERTIFICATE SHALL BE SENT BY THE ISSUING BANK OR SUCH L/C PARTICIPANT TO THE
ADMINISTRATIVE AGENT) SETTING FORTH IN REASONABLE DETAIL THE BASIS FOR THE
DETERMINATION OF SUCH ADDITIONAL AMOUNT OR AMOUNTS NECESSARY TO COMPENSATE THE
ISSUING BANK OR SUCH L/C PARTICIPANT AS AFORESAID SHALL BE CONCLUSIVE AND
BINDING ON SUCH BORROWER ABSENT CLEARLY DEMONSTRABLE ERROR.

 

(F)            SUCCESSOR ISSUING BANK.  AN ISSUING BANK MAY RESIGN AS ISSUING
BANK UPON 60 DAYS’ PRIOR WRITTEN NOTICE TO THE ADMINISTRATIVE AGENT, THE LENDERS
AND THE BORROWERS.  IF THE ISSUING BANK SHALL RESIGN AS ISSUING BANK UNDER THIS
AGREEMENT, THEN THE BORROWERS SHALL APPOINT FROM AMONG THE LENDERS (WITH THE
CONSENT OF SUCH LENDER) WITH COMMITMENTS A SUCCESSOR ISSUER OF LETTERS OF
CREDIT, WHEREUPON SUCH SUCCESSOR ISSUER SHALL SUCCEED TO THE RIGHTS, POWERS AND
DUTIES OF THE ISSUING BANK, AND THE TERM “ISSUING BANK” SHALL MEAN SUCH
SUCCESSOR ISSUER EFFECTIVE UPON SUCH APPOINTMENT (EXCEPT WITH RESPECT TO LETTERS
OF CREDIT ISSUED BY THE RESIGNING ISSUING BANK).  AFTER THE RESIGNATION OF THE
ISSUING BANK HEREUNDER, THE RESIGNING ISSUING BANK SHALL REMAIN A PARTY HERETO
AND SHALL CONTINUE TO HAVE ALL THE RIGHTS AND OBLIGATIONS OF AN ISSUING BANK
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS WITH RESPECT TO LETTERS OF
CREDIT ISSUED BY IT PRIOR TO SUCH RESIGNATION, BUT SHALL NOT BE REQUIRED TO
ISSUE ADDITIONAL LETTERS OF CREDIT.  AFTER ANY RETIRING ISSUING BANK’S
RESIGNATION AS ISSUING BANK, THE PROVISIONS OF THIS AGREEMENT

 

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RELATING TO THE ISSUING BANK SHALL INURE TO ITS BENEFIT AS TO ANY ACTIONS TAKEN
OR OMITTED TO BE TAKEN BY IT (A) WHILE IT WAS ISSUING BANK UNDER THIS AGREEMENT
OR (B) AT ANY TIME WITH RESPECT TO LETTERS OF CREDIT ISSUED BY SUCH ISSUING
BANK.

 

(G)                                 CASH COLLATERAL.

 

(I)            UPON THE REQUEST OF THE REQUIRED LENDERS IF, AS OF THE L/C
MATURITY DATE, THERE ARE ANY LETTERS OF CREDIT OUTSTANDING, THE BORROWERS SHALL
IMMEDIATELY CASH COLLATERALIZE THE THEN LETTERS OF CREDIT OUTSTANDING.

 

(II)           THE ADMINISTRATIVE AGENT ACTING IN ITS REASONABLE DISCRETION,
MAY, AT ANY TIME AND FROM TIME TO TIME AFTER THE INITIAL DEPOSIT OF CASH
COLLATERAL, REQUEST THAT ADDITIONAL CASH COLLATERAL BE PROVIDED IN THE EVENT
SUCH CASH COLLATERAL PREVIOUSLY PROVIDED IS INADEQUATE AS A RESULT OF EXCHANGE
RATE FLUCTUATIONS.

 

(III)          IF ANY EVENT OF DEFAULT SHALL OCCUR AND BE CONTINUING, THE
ADMINISTRATIVE AGENT OR THE LENDERS WITH LETTER OF CREDIT EXPOSURE REPRESENTING
GREATER THAN 50% OF THE TOTAL LETTER OF CREDIT EXPOSURE MAY REQUIRE THAT THE L/C
OBLIGATIONS BE CASH COLLATERALIZED.

 

2.05                        PREPAYMENTS.

 

(A)           THE BORROWERS MAY, UPON NOTICE TO THE ADMINISTRATIVE AGENT, AT ANY
TIME OR FROM TIME TO TIME VOLUNTARILY PREPAY REVOLVING LOANS IN WHOLE OR IN PART
WITHOUT PREMIUM OR PENALTY; PROVIDED THAT (I) SUCH NOTICE MUST BE RECEIVED BY
THE ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M. (A) THREE BUSINESS DAYS PRIOR
TO ANY DATE OF PREPAYMENT OF FIXED PERIOD EURODOLLAR LOANS, (B) ONE BUSINESS DAY
PRIOR TO ANY DATE OF PREPAYMENT OF DAILY FLOATING EURODOLLAR LOANS AND (C) ON
THE DATE OF PREPAYMENT OF BASE RATE LOANS; (II) ANY PREPAYMENT OF FIXED PERIOD
EURODOLLAR LOANS AND DAILY FLOATING EURODOLLAR LOANS SHALL BE IN A PRINCIPAL
AMOUNT OF $5,000,000 OR A WHOLE MULTIPLE OF $1,000,000 IN EXCESS THEREOF; AND
(III) ANY PREPAYMENT OF BASE RATE LOANS SHALL BE IN A PRINCIPAL AMOUNT OF
$500,000 OR A WHOLE MULTIPLE OF $100,000 IN EXCESS THEREOF OR, IN EACH CASE, IF
LESS, THE ENTIRE PRINCIPAL AMOUNT THEREOF THEN OUTSTANDING.  EACH SUCH NOTICE
SHALL SPECIFY THE DATE AND AMOUNT OF SUCH PREPAYMENT AND THE CURRENCY TYPE AND
INTEREST RATE TYPE OF REVOLVING LOANS TO BE PREPAID AND, IF FIXED PERIOD
EURODOLLAR LOANS ARE TO BE PREPAID, THE INTEREST PERIOD(S) OF SUCH LOANS.  THE
ADMINISTRATIVE AGENT WILL PROMPTLY NOTIFY EACH LENDER OF ITS RECEIPT OF EACH
SUCH NOTICE, AND OF THE AMOUNT OF SUCH LENDER’S APPLICABLE PERCENTAGE OF SUCH
PREPAYMENT.  IF SUCH NOTICE IS GIVEN BY ANY BORROWER, SUCH BORROWER SHALL MAKE
SUCH PREPAYMENT AND THE PAYMENT AMOUNT SPECIFIED IN SUCH NOTICE SHALL BE DUE AND
PAYABLE ON THE DATE SPECIFIED THEREIN.  ANY PREPAYMENT OF A FIXED PERIOD
EURODOLLAR LOAN OR A DAILY FLOATING EURODOLLAR LOAN SHALL BE ACCOMPANIED BY ALL
ACCRUED INTEREST ON THE AMOUNT PREPAID, TOGETHER WITH ANY ADDITIONAL AMOUNTS
REQUIRED PURSUANT TO SECTION 3.05.  EACH SUCH PREPAYMENT SHALL BE APPLIED TO THE
REVOLVING LOANS OF THE LENDERS IN ACCORDANCE WITH THEIR RESPECTIVE APPLICABLE
PERCENTAGES.

 

(B)           THE BORROWERS MAY, UPON NOTICE TO THE SWINGLINE LENDER (WITH A
COPY TO THE ADMINISTRATIVE AGENT), AT ANY TIME OR FROM TIME TO TIME, VOLUNTARILY
PREPAY SWINGLINE LOANS IN WHOLE OR IN PART WITHOUT PREMIUM OR PENALTY; PROVIDED
THAT (I) SUCH NOTICE MUST BE RECEIVED BY THE SWINGLINE LENDER AND THE
ADMINISTRATIVE AGENT NOT LATER THAN 1:00 P.M. ON THE DATE OF THE PREPAYMENT, AND
(II) ANY SUCH PREPAYMENT SHALL BE IN A MINIMUM PRINCIPAL AMOUNT OF $1,000,000. 
EACH SUCH NOTICE SHALL SPECIFY THE DATE AND AMOUNT OF SUCH PREPAYMENT.  IF SUCH
NOTICE IS GIVEN BY ANY BORROWER, SUCH BORROWER SHALL MAKE SUCH PREPAYMENT AND
THE PAYMENT AMOUNT SPECIFIED IN SUCH NOTICE SHALL BE DUE AND PAYABLE ON THE DATE
SPECIFIED THEREIN.

 

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(C)           IF FOR ANY REASON, AT ANY TIME, THE TOTAL REVOLVING CREDIT
EXPOSURE EXCEEDS THE LINE CAP AT SUCH TIME, THE BORROWERS SHALL IMMEDIATELY
PREPAY THE APPLICABLE LOANS IN AN AGGREGATE AMOUNT OF SUCH EXCESS, AS
APPLICABLE.

 

(D)           IN THE EVENT THAT AT ANY TIME ANY BORROWING BASE DEFICIENCY SHALL
EXIST, THE BORROWERS SHALL PREPAY THE LOANS (OR CASH COLLATERALIZE LETTERS OF
CREDIT AS CONTEMPLATED BY SECTION 2.04(G)) IN SUCH AMOUNTS AS SHALL BE NECESSARY
SO THAT SUCH BORROWING BASE DEFICIENCY NO LONGER EXISTS; PROVIDED THAT IF,
WITHIN FIVE BUSINESS DAYS AFTER DELIVERY OF A BORROWING BASE REPORT
DEMONSTRATING SUCH BORROWING BASE DEFICIENCY (AND/OR AT SUCH OTHER TIMES AS ANY
BORROWER HAS KNOWLEDGE OF SUCH BORROWING BASE DEFICIENCY), THE BORROWERS SHALL
PRESENT THE ADMINISTRATIVE AGENT WITH A REASONABLY FEASIBLE PLAN TO CAUSE SUCH
BORROWING BASE DEFICIENCY TO NO LONGER EXIST WITHIN 20 BUSINESS DAYS (WHICH
20-BUSINESS DAY PERIOD SHALL INCLUDE THE FIVE BUSINESS DAYS PERMITTED FOR
DELIVERY OF SUCH PLAN), THEN SUCH PREPAYMENT OR REDUCTION (OR CASH
COLLATERALIZATION) SHALL NOT BE REQUIRED TO BE EFFECTED IMMEDIATELY BUT MAY BE
EFFECTED IN ACCORDANCE WITH SUCH PLAN (WITH SUCH MODIFICATIONS AS THE BORROWERS
MAY REASONABLY DETERMINE), SO LONG AS SUCH BORROWING BASE DEFICIENCY NO LONGER
EXISTS PRIOR TO THE END OF SUCH 20-BUSINESS DAY PERIOD.

 

2.06                        TERMINATION OR REDUCTION OF COMMITMENTS.  THE
BORROWERS MAY, UPON NOTICE TO THE ADMINISTRATIVE AGENT, TERMINATE THE
COMMITMENTS HEREUNDER, AND, FROM TIME TO TIME, PERMANENTLY REDUCE THE AGGREGATE
COMMITMENT AMOUNT; PROVIDED THAT (I) ANY SUCH NOTICE SHALL BE RECEIVED BY THE
ADMINISTRATIVE AGENT NOT LATER THAN 11:00 A.M. FIVE (5) BUSINESS DAYS PRIOR TO
THE DATE OF TERMINATION OR REDUCTION, (II) ANY SUCH PARTIAL REDUCTION SHALL BE
IN AN AGGREGATE AMOUNT OF $5,000,000 OR ANY WHOLE MULTIPLE OF $1,000,000 IN
EXCESS THEREOF, (III) THE BORROWERS SHALL NOT TERMINATE OR REDUCE THE AGGREGATE
COMMITMENTS IF, AFTER GIVING EFFECT THERETO AND TO ANY CONCURRENT PREPAYMENTS
HEREUNDER, THE TOTAL REVOLVING CREDIT EXPOSURE WOULD EXCEED THE AGGREGATE
COMMITMENT AMOUNT, (IV) IF, AFTER GIVING EFFECT TO ANY REDUCTION OF THE
AGGREGATE COMMITMENTS, THE SWINGLINE SUBLIMIT EXCEEDS THE AGGREGATE COMMITMENT
AMOUNT, SUCH SUBLIMIT SHALL BE AUTOMATICALLY REDUCED BY THE AMOUNT OF SUCH
EXCESS AND (V) IN THE CASE OF A PARTIAL TERMINATION OR REDUCTION OF THE
COMMITMENTS, THE AGGREGATE COMMITMENT AMOUNT SHALL NOT BE LESS THAN
$50,000,000.  THE ADMINISTRATIVE AGENT WILL PROMPTLY NOTIFY THE LENDERS OF ANY
SUCH NOTICE OF TERMINATION OR REDUCTION OF THE AGGREGATE COMMITMENTS.  ANY
REDUCTION OF THE AGGREGATE COMMITMENT AMOUNT SHALL BE APPLIED TO THE COMMITMENT
OF EACH LENDER ACCORDING TO ITS APPLICABLE PERCENTAGE.  ALL FEES ACCRUED UNTIL
THE EFFECTIVE DATE OF ANY TERMINATION OF THE AGGREGATE COMMITMENTS SHALL BE PAID
ON THE EFFECTIVE DATE OF SUCH TERMINATION.

 

2.07                        REPAYMENT OF LOANS.

 

(A)           THE BORROWERS SHALL REPAY TO THE LENDERS ON THE MATURITY DATE THE
AGGREGATE PRINCIPAL AMOUNT OF REVOLVING LOANS OUTSTANDING ON SUCH DATE.

 

(B)           THE BORROWERS SHALL REPAY EACH SWINGLINE LOAN ON THE EARLIEST TO
OCCUR OF (I) THE MATURITY DATE OR (II) THE DATE REQUESTED BY THE SWINGLINE
LENDER WHICH SHALL NOT BE EARLIER THAN THE BUSINESS DAY IN WHICH THE BORROWERS
MAY REQUEST BASE RATE LOANS PURSUANT TO SECTION 2.02.

 

2.08                        INTEREST.

 

(A)           SUBJECT TO THE PROVISIONS OF SUBSECTION (B) BELOW, (I) EACH FIXED
PERIOD EURODOLLAR LOAN SHALL BEAR INTEREST ON THE OUTSTANDING PRINCIPAL AMOUNT
THEREOF FOR EACH INTEREST PERIOD AT A RATE PER ANNUM EQUAL TO THE FIXED PERIOD
EURODOLLAR RATE FOR SUCH INTEREST PERIOD PLUS THE RELEVANT APPLICABLE RATE,
(II) EACH DAILY FLOATING EURODOLLAR LOAN SHALL BEAR INTEREST ON THE OUTSTANDING
PRINCIPAL AMOUNT THEREOF FROM THE APPLICABLE BORROWING DATE TO THE DATE OF
PAYMENT THEREOF AT A RATE PER ANNUM EQUAL TO THE DAILY FLOATING EURODOLLAR RATE
PLUS THE RELEVANT APPLICABLE RATE, (III) EACH BASE RATE LOAN SHALL BEAR INTEREST

 

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ON THE OUTSTANDING PRINCIPAL AMOUNT THEREOF AT A RATE PER ANNUM EQUAL TO THE
BASE RATE PLUS THE RELEVANT APPLICABLE RATE; AND (IV) EACH SWINGLINE LOAN SHALL
BEAR INTEREST ON THE OUTSTANDING PRINCIPAL AMOUNT THEREOF FROM THE APPLICABLE
BORROWING DATE TO THE DATE OF PAYMENT THEREOF AT A RATE PER ANNUM EQUAL TO, AT
THE ELECTION OF THE BORROWERS, (A) THE BASE RATE OR (B) THE DAILY FLOATING
EURODOLLAR RATE PLUS THE RELEVANT APPLICABLE RATE.

 

(B)                                 (I)            IF ANY AMOUNT OF PRINCIPAL OF
ANY LOAN IS NOT PAID WHEN DUE (WITHOUT REGARD TO ANY APPLICABLE GRACE PERIODS),
WHETHER AT STATED MATURITY, BY ACCELERATION OR OTHERWISE, SUCH AMOUNT SHALL
THEREAFTER BEAR INTEREST AT A FLUCTUATING INTEREST RATE PER ANNUM AT ALL TIMES
EQUAL TO THE DEFAULT RATE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS.

 

(II)           IF ANY AMOUNT (OTHER THAN PRINCIPAL OF ANY LOAN) PAYABLE BY THE
BORROWERS UNDER ANY LOAN DOCUMENT IS NOT PAID WHEN DUE (WITHOUT REGARD TO ANY
APPLICABLE GRACE PERIODS), WHETHER AT STATED MATURITY, BY ACCELERATION OR
OTHERWISE, THEN UPON THE REQUEST OF THE REQUIRED LENDERS, SUCH AMOUNT SHALL
THEREAFTER BEAR INTEREST AT A FLUCTUATING INTEREST RATE PER ANNUM AT ALL TIMES
EQUAL TO THE DEFAULT RATE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS.

 

(III)          UPON THE REQUEST OF THE REQUIRED LENDERS, WHILE ANY EVENT OF
DEFAULT EXISTS, THE BORROWERS SHALL PAY INTEREST ON THE PRINCIPAL AMOUNT OF ALL
OUTSTANDING OBLIGATIONS HEREUNDER AT A FLUCTUATING INTEREST RATE PER ANNUM AT
ALL TIMES EQUAL TO THE DEFAULT RATE TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAWS.

 

(IV)          ACCRUED AND UNPAID INTEREST ON PAST DUE AMOUNTS (INCLUDING
INTEREST ON PAST DUE INTEREST) SHALL BE DUE AND PAYABLE UPON DEMAND.

 

(C)           INTEREST ON EACH LOAN SHALL BE DUE AND PAYABLE IN ARREARS ON EACH
INTEREST PAYMENT DATE APPLICABLE THERETO AND AT SUCH OTHER TIMES AS MAY BE
SPECIFIED HEREIN.  INTEREST HEREUNDER SHALL BE DUE AND PAYABLE IN ACCORDANCE
WITH THE TERMS HEREOF BEFORE AND AFTER JUDGMENT, AND BEFORE AND AFTER THE
COMMENCEMENT OF ANY PROCEEDING UNDER ANY DEBTOR RELIEF LAW.

 

2.09        FEES.

 

(A)           COMMITMENT FEE.  THE BORROWERS SHALL PAY TO THE ADMINISTRATIVE
AGENT FOR THE ACCOUNT OF EACH LENDER IN ACCORDANCE WITH ITS APPLICABLE
PERCENTAGE, A COMMITMENT FEE EQUAL TO 0.50% PER ANNUM TIMES THE AVERAGE DAILY
UNUSED AMOUNT OF COMMITMENTS OF SUCH LENDER DURING THE PERIOD FROM AND INCLUDING
THE CLOSING DATE TO BUT EXCLUDING THE EARLIER OF THE DATE SUCH COMMITMENT
TERMINATES AND THE COMMITMENT TERMINATION DATE.  THE COMMITMENT FEE SHALL ACCRUE
AT ALL TIMES DURING THE AVAILABILITY PERIOD AND SHALL BE DUE AND PAYABLE
QUARTERLY IN ARREARS ON THE LAST BUSINESS DAY OF EACH MARCH, JUNE, SEPTEMBER AND
DECEMBER, COMMENCING WITH THE FIRST SUCH DATE TO OCCUR AFTER THE CLOSING DATE,
AND ON THE LAST DAY OF THE AVAILABILITY PERIOD.

 

(B)           LETTER OF CREDIT FEES. EACH BORROWER AGREES TO PAY (I) TO THE
ADMINISTRATIVE AGENT IN DOLLARS FOR THE ACCOUNT OF THE LENDERS PRO RATA ON THE
BASIS OF THEIR RESPECTIVE LC EXPOSURE, A FEE IN RESPECT OF EACH LETTER OF CREDIT
(THE “LETTER OF CREDIT FEE”), FOR THE PERIOD FROM THE DATE OF ISSUANCE OF SUCH
LETTER OF CREDIT TO THE TERMINATION DATE OF SUCH LETTER OF CREDIT COMPUTED AT
THE PER ANNUM RATE FOR EACH DAY EQUAL TO THE APPLICABLE RATE FOR EURODOLLAR
LOANS MINUS 0.125% PER ANNUM ON THE AVERAGE DAILY STATED AMOUNT OF SUCH LETTER
OF CREDIT (EXCLUDING ANY PORTION THEREOF ATTRIBUTABLE TO UNREIMBURSED LC
DISBURSEMENTS) DURING THE PERIOD FROM AND INCLUDING THE CLOSING 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 (THE “FRONTING FEE”), WHICH SHALL ACCRUE AT THE RATE
OF 0.125% PER ANNUM ON THE AVERAGE DAILY AMOUNT OF THE LC EXPOSURE (EXCLUDING
ANY PORTION

 

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THEREOF ATTRIBUTABLE TO UNREIMBURSED LC DISBURSEMENTS) DURING THE PERIOD FROM
AND INCLUDING THE CLOSING 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; PROVIDED THAT, NO FEES WILL ACCRUE UNDER THIS
SECTION 2.09 ON ANY DEFAULTING LENDER’S PORTION OF A LETTER OF CREDIT THAT ANY
BORROWER HAS CASH COLLATERALIZED PURSUANT TO SECTION 2.04(G).  LETTER OF CREDIT
FEES AND FRONTING FEES SHALL ACCRUE DURING THE AVAILABILITY PERIOD AND SHALL BE
DUE AND PAYABLE QUARTERLY IN ARREARS ON THE LAST BUSINESS DAY OF EACH MARCH,
JUNE, SEPTEMBER AND DECEMBER, COMMENCING WITH THE FIRST SUCH DATE TO OCCUR AFTER
THE CLOSING DATE, PROVIDED THAT LETTER OF CREDIT FEES AND FRONTING FEES SHALL BE
PAYABLE ON THE DATE ON WHICH THE COMMITMENTS TERMINATE.  ANY OTHER FEES PAYABLE
TO THE ISSUING BANK PURSUANT TO THIS PARAGRAPH SHALL BE PAYABLE WITHIN 20
BUSINESS DAYS AFTER DEMAND.  LETTER OF CREDIT 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).

 

(C)                                  OTHER FEES.  (I)  THE BORROWERS SHALL PAY
TO THE ARRANGER AND THE ADMINISTRATIVE AGENT FOR THEIR OWN RESPECTIVE ACCOUNTS
FEES IN THE AMOUNTS AND AT THE TIMES SET FORTH IN THE FEE LETTER OR AS OTHERWISE
SEPARATELY AGREED BETWEEN SUCH PARTIES.  SUCH FEES SHALL BE FULLY EARNED WHEN
PAID AND SHALL NOT BE REFUNDABLE FOR ANY REASON WHATSOEVER.

 

(II)                                  THE BORROWERS SHALL PAY TO THE LENDERS
SUCH FEES AS SHALL HAVE BEEN SEPARATELY AGREED UPON IN WRITING IN THE AMOUNTS
AND AT THE TIMES SO SPECIFIED.  SUCH FEES SHALL BE FULLY EARNED WHEN PAID AND
SHALL NOT BE REFUNDABLE FOR ANY REASON WHATSOEVER.

 

2.10                        COMPUTATION OF INTEREST AND FEES.  ALL COMPUTATIONS
OF INTEREST FOR BASE RATE LOANS OR DAILY FLOATING EURODOLLAR LOANS SHALL BE MADE
ON THE BASIS OF A YEAR OF 365 OR 366 DAYS, AS THE CASE MAY BE, AND ACTUAL DAYS
ELAPSED.  ALL OTHER COMPUTATIONS OF FEES AND INTEREST SHALL BE MADE ON THE BASIS
OF A 360-DAY YEAR AND ACTUAL DAYS ELAPSED (WHICH RESULTS IN MORE FEES OR
INTEREST, AS APPLICABLE, BEING PAID THAN IF COMPUTED ON THE BASIS OF A 365-DAY
YEAR).  INTEREST SHALL ACCRUE ON EACH LOAN FOR THE DAY ON WHICH THE LOAN IS
MADE, AND SHALL NOT ACCRUE ON A LOAN, OR ANY PORTION THEREOF, FOR THE DAY ON
WHICH THE LOAN OR SUCH PORTION IS PAID, PROVIDED THAT ANY LOAN THAT IS REPAID ON
THE SAME DAY ON WHICH IT IS MADE SHALL, SUBJECT TO SECTION 2.12(A), BEAR
INTEREST FOR ONE DAY.  EACH DETERMINATION BY THE ADMINISTRATIVE AGENT OF AN
INTEREST RATE OR FEE HEREUNDER SHALL BE CONCLUSIVE AND BINDING FOR ALL PURPOSES,
ABSENT MANIFEST ERROR.

 

2.11                        EVIDENCE OF DEBT.

 

(A)                                  THE LOANS MADE BY EACH LENDER SHALL BE
EVIDENCED BY ONE OR MORE ACCOUNTS OR RECORDS MAINTAINED BY SUCH LENDER AND BY
THE ADMINISTRATIVE AGENT IN THE ORDINARY COURSE OF BUSINESS.  THE ACCOUNTS OR
RECORDS MAINTAINED BY THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL BE
CONCLUSIVE ABSENT MANIFEST ERROR OF THE AMOUNT OF THE LOANS MADE BY THE LENDERS
TO THE BORROWERS AND THE INTEREST AND PAYMENTS THEREON.  ANY FAILURE TO SO
RECORD OR ANY ERROR IN DOING SO SHALL NOT, HOWEVER, LIMIT OR OTHERWISE AFFECT
THE OBLIGATION OF THE BORROWERS HEREUNDER TO PAY ANY AMOUNT OWING WITH RESPECT
TO THE OBLIGATIONS.  IN THE EVENT OF ANY CONFLICT BETWEEN THE ACCOUNTS AND
RECORDS MAINTAINED BY ANY LENDER AND THE ACCOUNTS AND RECORDS OF THE
ADMINISTRATIVE AGENT IN RESPECT OF SUCH MATTERS, THE ACCOUNTS AND RECORDS OF THE
ADMINISTRATIVE AGENT SHALL CONTROL IN THE ABSENCE OF MANIFEST ERROR.  UPON THE
REQUEST OF ANY LENDER MADE THROUGH THE ADMINISTRATIVE AGENT, THE BORROWERS SHALL
EXECUTE AND DELIVER TO SUCH LENDER (THROUGH THE ADMINISTRATIVE AGENT) A NOTE,
WHICH SHALL EVIDENCE SUCH LENDER’S LOANS IN ADDITION TO SUCH ACCOUNTS OR
RECORDS.  EACH LENDER MAY ATTACH SCHEDULES TO ITS NOTE AND ENDORSE THEREON THE
DATE, INTEREST RATE TYPE (IF APPLICABLE), AMOUNT, APPROVED CURRENCY AND MATURITY
OF ITS LOANS AND PAYMENTS WITH RESPECT THERETO.

 

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(B)                                 IN ADDITION TO THE ACCOUNTS AND RECORDS
REFERRED TO IN SUBSECTION (A), EACH LENDER AND THE ADMINISTRATIVE AGENT SHALL
MAINTAIN IN ACCORDANCE WITH ITS USUAL PRACTICE ACCOUNTS OR RECORDS EVIDENCING
THE PURCHASES AND SALES BY SUCH LENDER OF PARTICIPATIONS IN SWINGLINE LOANS.  IN
THE EVENT OF ANY CONFLICT BETWEEN THE ACCOUNTS AND RECORDS MAINTAINED BY THE
ADMINISTRATIVE AGENT AND THE ACCOUNTS AND RECORDS OF ANY LENDER IN RESPECT OF
SUCH MATTERS, THE ACCOUNTS AND RECORDS OF THE ADMINISTRATIVE AGENT SHALL CONTROL
IN THE ABSENCE OF MANIFEST ERROR.

 

2.12                        PAYMENTS GENERALLY; ADMINISTRATIVE AGENT’S CLAWBACK.

 

(A)                                  GENERAL.  ALL PAYMENTS TO BE MADE BY ANY
BORROWER SHALL BE MADE WITHOUT CONDITION OR DEDUCTION FOR ANY COUNTERCLAIM,
DEFENSE, RECOUPMENT OR SETOFF.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN
AND EXCEPT WITH RESPECT TO PRINCIPAL OF AND INTEREST ON ALTERNATE CURRENCY
LOANS, ALL PAYMENTS BY ANY BORROWER HEREUNDER SHALL BE MADE TO THE
ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE RESPECTIVE LENDERS TO WHICH SUCH
PAYMENT IS OWED, AT THE ADMINISTRATIVE AGENT’S OFFICE IN THE RELEVANT APPROVED
CURRENCY AND IN SAME DAY FUNDS NOT LATER THAN 2:00 P.M. ON THE DATE SPECIFIED
HEREIN.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, ALL PAYMENTS BY THE
BORROWERS HEREUNDER WITH RESPECT TO PRINCIPAL AND INTEREST ON ALTERNATE CURRENCY
LOANS SHALL BE MADE TO THE ADMINISTRATIVE AGENT, FOR THE ACCOUNT OF THE
RESPECTIVE LENDERS TO WHICH SUCH PAYMENT IS OWED, AT THE APPLICABLE
ADMINISTRATIVE AGENT’S OFFICE IN SUCH ALTERNATE CURRENCY AND IN SAME DAY FUNDS
NOT LATER THAN THE APPLICABLE TIME SPECIFIED BY THE ADMINISTRATIVE AGENT ON THE
DATES SPECIFIED HEREIN.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
ADMINISTRATIVE AGENT MAY REQUIRE THAT ANY PAYMENTS DUE UNDER THIS AGREEMENT BE
MADE IN THE UNITED STATES.  IF, FOR ANY REASON, ANY BORROWER IS PROHIBITED BY
ANY LAW FROM MAKING ANY REQUIRED PAYMENT HEREUNDER IN AN ALTERNATE CURRENCY,
SUCH BORROWER SHALL MAKE SUCH PAYMENT IN DOLLARS IN THE DOLLAR EQUIVALENT OF THE
ALTERNATE CURRENCY PAYMENT AMOUNT.  THE ADMINISTRATIVE AGENT WILL PROMPTLY
DISTRIBUTE TO EACH LENDER ITS APPLICABLE PERCENTAGE (OR OTHER APPLICABLE SHARE
AS PROVIDED HEREIN) OF SUCH PAYMENT IN LIKE FUNDS AS RECEIVED BY WIRE TRANSFER
TO SUCH LENDER’S LENDING OFFICE.  ALL PAYMENTS RECEIVED BY THE ADMINISTRATIVE
AGENT (I) AFTER 2:00 P.M., IN THE CASE OF PAYMENTS IN DOLLARS, OR (II) AFTER THE
APPLICABLE TIME SPECIFIED BY THE ADMINISTRATIVE AGENT, IN THE CASE OF PAYMENTS
IN AN ALTERNATE CURRENCY, SHALL BE DEEMED RECEIVED ON THE NEXT SUCCEEDING
BUSINESS DAY AND ANY APPLICABLE INTEREST OR FEE SHALL CONTINUE TO ACCRUE.  IF
ANY PAYMENT TO BE MADE BY ANY BORROWER SHALL COME DUE ON A DAY OTHER THAN A
BUSINESS DAY, PAYMENT SHALL BE MADE ON THE NEXT FOLLOWING BUSINESS DAY, AND SUCH
EXTENSION OF TIME SHALL BE REFLECTED IN COMPUTING INTEREST OR FEES, AS THE CASE
MAY BE.  UNLESS OTHERWISE EXPRESSLY STATED, ALL PAYMENTS HEREUNDER SHALL BE MADE
IN DOLLARS.

 

(B)                                 (I)  FUNDING BY LENDERS; PRESUMPTION BY
ADMINISTRATIVE AGENT.  UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
NOTICE FROM A LENDER PRIOR TO THE PROPOSED DATE OF ANY BORROWING OF EURODOLLAR
LOANS (OR, IN THE CASE OF ANY REVOLVING LOAN OF BASE RATE LOANS, PRIOR TO 12:00
NOON ON THE DATE OF SUCH REVOLVING LOAN) THAT SUCH LENDER WILL NOT MAKE
AVAILABLE TO THE ADMINISTRATIVE AGENT SUCH LENDER’S SHARE OF SUCH REVOLVING
LOAN, THE ADMINISTRATIVE AGENT MAY ASSUME THAT SUCH LENDER HAS MADE SUCH SHARE
AVAILABLE ON SUCH DATE IN ACCORDANCE WITH SECTION 2.02 (OR, IN THE CASE OF A
BORROWING OF BASE RATE LOANS, THAT SUCH LENDER HAS MADE SUCH SHARE AVAILABLE IN
ACCORDANCE WITH AND AT THE TIME REQUIRED BY SECTION 2.02) AND MAY, IN RELIANCE
UPON SUCH ASSUMPTION, MAKE AVAILABLE TO THE BORROWERS IN THE RELEVANT APPROVED
CURRENCY A CORRESPONDING AMOUNT.  IN SUCH EVENT, IF A LENDER HAS NOT IN FACT
MADE ITS SHARE OF THE APPLICABLE REVOLVING LOAN AVAILABLE TO THE ADMINISTRATIVE
AGENT, THEN THE APPLICABLE LENDER AND THE BORROWERS SEVERALLY AGREE TO PAY TO
THE ADMINISTRATIVE AGENT IN THE RELEVANT APPROVED CURRENCY FORTHWITH ON DEMAND
SUCH CORRESPONDING AMOUNT IN IMMEDIATELY AVAILABLE FUNDS WITH INTEREST THEREON,
FOR EACH DAY FROM AND INCLUDING THE DATE SUCH AMOUNT IS MADE AVAILABLE TO THE
BORROWERS TO, BUT EXCLUDING, THE DATE OF PAYMENT TO THE ADMINISTRATIVE AGENT, AT
(A) IN THE CASE OF A PAYMENT TO BE MADE BY SUCH LENDER, THE GREATER OF THE
FEDERAL FUNDS RATE AND A RATE DETERMINED BY THE ADMINISTRATIVE AGENT IN
ACCORDANCE WITH BANKING INDUSTRY RULES ON INTERBANK COMPENSATION, PLUS ANY
ADMINISTRATIVE, PROCESSING OR SIMILAR FEES CUSTOMARILY CHARGED BY THE
ADMINISTRATIVE AGENT IN CONNECTION WITH THE

 

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FOREGOING, AND (B) IN THE CASE OF A PAYMENT TO BE MADE BY THE BORROWERS, THE
INTEREST RATE APPLICABLE TO BASE RATE LOANS.  IF THE BORROWERS AND SUCH LENDER
SHALL PAY SUCH INTEREST TO THE ADMINISTRATIVE AGENT FOR THE SAME OR AN
OVERLAPPING PERIOD, THE ADMINISTRATIVE AGENT SHALL PROMPTLY REMIT TO THE
BORROWERS THE AMOUNT OF SUCH INTEREST PAID BY THE BORROWERS FOR SUCH PERIOD.  IF
SUCH LENDER PAYS ITS SHARE OF THE APPLICABLE REVOLVING LOAN TO THE
ADMINISTRATIVE AGENT, THEN THE AMOUNT SO PAID SHALL CONSTITUTE SUCH LENDER’S
REVOLVING LOAN INCLUDED IN SUCH BORROWING.  ANY PAYMENT BY THE BORROWERS SHALL
BE WITHOUT PREJUDICE TO ANY CLAIM THE BORROWERS MAY HAVE AGAINST A LENDER THAT
SHALL HAVE FAILED TO MAKE SUCH PAYMENT TO THE ADMINISTRATIVE AGENT.

 

(II)                                  PAYMENTS BY BORROWERS; PRESUMPTIONS BY
ADMINISTRATIVE AGENT.  UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED
NOTICE FROM THE BORROWERS PRIOR TO THE DATE ON WHICH ANY PAYMENT IS DUE TO THE
ADMINISTRATIVE AGENT FOR THE ACCOUNT OF THE LENDERS HEREUNDER THAT THE BORROWERS
WILL NOT MAKE SUCH PAYMENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT THE
BORROWERS HAVE MADE SUCH PAYMENT ON SUCH DATE IN ACCORDANCE HEREWITH AND MAY, IN
RELIANCE UPON SUCH ASSUMPTION, DISTRIBUTE TO THE LENDERS, AS THE CASE MAY BE,
THE AMOUNT DUE.  IN SUCH EVENT, IF THE BORROWERS HAVE NOT IN FACT MADE SUCH
PAYMENT, THEN EACH OF THE LENDERS, AS THE CASE MAY BE, SEVERALLY AGREES TO REPAY
TO THE ADMINISTRATIVE AGENT FORTHWITH ON DEMAND THE AMOUNT SO DISTRIBUTED TO
SUCH LENDER, IN IMMEDIATELY AVAILABLE FUNDS 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, AT THE GREATER OF THE FEDERAL
FUNDS RATE AND A RATE DETERMINED BY THE ADMINISTRATIVE AGENT IN ACCORDANCE WITH
BANKING INDUSTRY RULES ON INTERBANK COMPENSATION.

 

A notice of the Administrative Agent to any Lender or the Borrowers with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

 

(C)                                  FAILURE TO SATISFY CONDITIONS PRECEDENT. 
IF ANY LENDER MAKES AVAILABLE TO THE ADMINISTRATIVE AGENT FUNDS FOR ANY LOAN TO
BE MADE BY SUCH LENDER AS PROVIDED IN THE FOREGOING PROVISIONS OF THIS
ARTICLE II, AND SUCH FUNDS ARE NOT MADE AVAILABLE TO THE BORROWERS BY THE
ADMINISTRATIVE AGENT BECAUSE THE CONDITIONS TO THE APPLICABLE BORROWING SET
FORTH IN ARTICLE IV ARE NOT SATISFIED OR WAIVED IN ACCORDANCE WITH THE TERMS
HEREOF, THE ADMINISTRATIVE AGENT SHALL PROMPTLY RETURN SUCH FUNDS (IN LIKE FUNDS
AS RECEIVED FROM SUCH LENDER) TO SUCH LENDER, WITHOUT INTEREST.

 

(D)                                 OBLIGATIONS OF LENDERS SEVERAL.  ALL
OBLIGATIONS OF THE LENDERS PURSUANT TO THIS AGREEMENT (INCLUDING OBLIGATIONS TO
MAKE REVOLVING LOANS, TO FUND PARTICIPATIONS IN SWINGLINE LOANS AND TO MAKE
PAYMENTS PURSUANT TO SECTION 10.04(C)) ARE SEVERAL AND NOT JOINT.  THE FAILURE
OF ANY LENDER TO MAKE ANY REVOLVING LOAN, TO FUND ANY SUCH PARTICIPATION OR TO
MAKE ANY PAYMENT UNDER SECTION 10.04(C) ON ANY DATE REQUIRED HEREUNDER SHALL NOT
RELIEVE ANY OTHER LENDER OF ITS CORRESPONDING OBLIGATION TO DO SO ON SUCH DATE,
AND NO LENDER SHALL BE RESPONSIBLE FOR THE FAILURE OF ANY OTHER LENDER TO SO
MAKE ITS REVOLVING LOAN, TO PURCHASE ITS PARTICIPATION OR TO MAKE ITS PAYMENT
UNDER SECTION 10.04(C).

 

(E)                                  FUNDING SOURCE.  NOTHING HEREIN SHALL BE
DEEMED TO OBLIGATE ANY LENDER TO OBTAIN THE FUNDS FOR ANY LOAN IN ANY PARTICULAR
PLACE OR MANNER OR TO CONSTITUTE A REPRESENTATION BY ANY LENDER THAT IT HAS
OBTAINED OR WILL OBTAIN THE FUNDS FOR ANY LOAN IN ANY PARTICULAR PLACE OR
MANNER.

 

2.13                        SHARING OF PAYMENTS BY LENDERS.  IF ANY LENDER
SHALL, BY EXERCISING ANY RIGHT OF SETOFF OR COUNTERCLAIM OR OTHERWISE, OBTAIN
PAYMENT IN RESPECT OF ANY PRINCIPAL OF OR INTEREST ON ANY OF THE REVOLVING LOANS
MADE BY IT, OR THE PARTICIPATIONS IN SWINGLINE LOANS HELD BY IT RESULTING IN
SUCH LENDER’S RECEIVING PAYMENT OF A PROPORTION OF THE AGGREGATE AMOUNT OF SUCH
REVOLVING LOANS OR PARTICIPATIONS AND ACCRUED INTEREST THEREON GREATER THAN ITS
PRO RATA SHARE THEREOF AS PROVIDED HEREIN, THEN THE LENDER RECEIVING SUCH
GREATER PROPORTION SHALL (A) NOTIFY THE ADMINISTRATIVE AGENT OF SUCH FACT, AND
(B) PURCHASE (FOR CASH AT FACE VALUE IN THE RELEVANT APPROVED CURRENCY)
PARTICIPATIONS IN THE REVOLVING

 

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LOANS AND SUBPARTICIPATIONS IN SWINGLINE LOANS OF THE OTHER LENDERS, OR MAKE
SUCH OTHER ADJUSTMENTS AS SHALL BE EQUITABLE, 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 OTHER AMOUNTS OWING THEM, PROVIDED THAT:

 

(I)                                     IF ANY SUCH PARTICIPATIONS OR
SUBPARTICIPATIONS ARE PURCHASED AND ALL OR ANY PORTION OF THE PAYMENT GIVING
RISE THERETO IS RECOVERED, SUCH PARTICIPATIONS OR SUBPARTICIPATIONS SHALL BE
RESCINDED AND THE PURCHASE PRICE RESTORED TO THE EXTENT OF SUCH RECOVERY,
WITHOUT INTEREST; AND

 

(II)                                  THE PROVISIONS OF THIS SECTION SHALL NOT
BE CONSTRUED TO APPLY TO (X) ANY PAYMENT MADE BY THE BORROWERS PURSUANT TO AND
IN ACCORDANCE WITH THE EXPRESS TERMS OF THIS AGREEMENT OR (Y) ANY PAYMENT
OBTAINED BY A LENDER AS CONSIDERATION FOR THE ASSIGNMENT OF OR SALE OF A
PARTICIPATION IN ANY OF ITS REVOLVING LOANS OR SUBPARTICIPATIONS IN SWINGLINE
LOANS TO ANY ASSIGNEE OR PARTICIPANT, OTHER THAN TO THE BORROWERS OR ANY
SUBSIDIARY THEREOF (AS TO WHICH THE PROVISIONS OF THIS SECTION SHALL APPLY).

 

Each Borrower 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
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of such Borrower in the amount of
such participation.

 

2.14                        INCREASE IN COMMITMENTS.

 

(A)                                  REQUEST FOR INCREASE.  PROVIDED THERE
EXISTS NO DEFAULT, UPON NOTICE TO THE ADMINISTRATIVE AGENT (WHICH SHALL PROMPTLY
NOTIFY THE LENDERS), THE BORROWERS MAY FROM TIME TO TIME, REQUEST AN INCREASE IN
THE AGGREGATE COMMITMENT AMOUNT BY AMOUNTS SUCH THAT IMMEDIATELY AFTER GIVING
EFFECT TO ANY SUCH INCREASE, THE TOTAL COMMITMENTS OF ALL OF THE LENDERS
HEREUNDER SHALL NOT EXCEED $600,000,000; PROVIDED THAT (I) ANY SUCH REQUEST FOR
AN INCREASE SHALL BE IN A MINIMUM AMOUNT OF $10,000,000 AND INTEGRAL MULTIPLES
OF $2,500,000 IN EXCESS THEREOF, AND (II) THE BORROWERS MAY MAKE A MAXIMUM OF
FOUR (4) SUCH REQUESTS IN ANY 12 MONTH PERIOD.  AT THE TIME OF SENDING SUCH
NOTICE, THE BORROWERS (IN CONSULTATION WITH THE ADMINISTRATIVE AGENT) SHALL
SPECIFY THE TIME PERIOD WITHIN WHICH EACH LENDER IS REQUESTED TO RESPOND (WHICH
SHALL IN NO EVENT BE LESS THAN TEN (10) BUSINESS DAYS FROM THE DATE OF DELIVERY
OF SUCH NOTICE TO THE LENDERS).

 

(B)                                 LENDER ELECTIONS TO INCREASE.  EACH LENDER
SHALL NOTIFY THE ADMINISTRATIVE AGENT WITHIN SUCH TIME PERIOD WHETHER OR NOT IT
AGREES TO INCREASE ITS COMMITMENT AND, IF SO, WHETHER BY AN AMOUNT EQUAL TO,
GREATER THAN, OR LESS THAN ITS APPLICABLE PERCENTAGE OF SUCH REQUESTED
INCREASE.  ANY LENDER NOT RESPONDING WITHIN SUCH TIME PERIOD SHALL BE DEEMED TO
HAVE DECLINED TO INCREASE ITS COMMITMENT.  NO LENDER SHALL BE OBLIGATED TO
INCREASE ITS COMMITMENT HEREUNDER.

 

(C)                                  NOTIFICATION BY ADMINISTRATIVE AGENT;
ADDITIONAL LENDERS.  THE ADMINISTRATIVE AGENT SHALL NOTIFY THE BORROWERS AND
EACH LENDER OF THE LENDERS’ RESPONSES TO EACH REQUEST MADE HEREUNDER.  TO
ACHIEVE THE FULL AMOUNT OF A REQUESTED INCREASE AND SUBJECT TO THE APPROVAL OF
THE ADMINISTRATIVE AGENT AND THE SWINGLINE LENDER (WHICH APPROVALS SHALL NOT BE
UNREASONABLY WITHHELD), THE BORROWERS MAY ALSO INVITE ADDITIONAL ELIGIBLE
ASSIGNEES TO BECOME LENDERS PURSUANT TO A JOINDER AGREEMENT IN FORM AND
SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT AND ITS COUNSEL.

 

(D)                                 EFFECTIVE DATE AND ALLOCATIONS.  IF THE
AGGREGATE COMMITMENTS ARE INCREASED IN ACCORDANCE WITH THIS SECTION, THE
ADMINISTRATIVE AGENT AND THE BORROWERS SHALL DETERMINE THE EFFECTIVE DATE (THE
“INCREASE EFFECTIVE DATE”) AND THE FINAL ALLOCATION OF SUCH INCREASE.  THE
ADMINISTRATIVE AGENT SHALL PROMPTLY NOTIFY THE BORROWERS AND THE LENDERS OF THE
FINAL ALLOCATION OF SUCH INCREASE AND THE INCREASE EFFECTIVE DATE.

 

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(E)                                  CONDITIONS TO EFFECTIVENESS OF INCREASE. 
AS A CONDITION PRECEDENT TO SUCH INCREASE, THE BORROWERS SHALL DELIVER TO THE
ADMINISTRATIVE AGENT A CERTIFICATE OF EACH BORROWER DATED AS OF THE INCREASE
EFFECTIVE DATE (IN SUFFICIENT COPIES FOR EACH LENDER) SIGNED BY A RESPONSIBLE
OFFICER OF SUCH BORROWER (I) CERTIFYING AND ATTACHING THE RESOLUTIONS ADOPTED BY
SUCH BORROWER APPROVING OR CONSENTING TO SUCH INCREASE, AND (II) CERTIFYING
THAT, BEFORE AND AFTER GIVING EFFECT TO SUCH INCREASE, (A) THE REPRESENTATIONS
AND WARRANTIES CONTAINED IN ARTICLE V AND THE OTHER LOAN DOCUMENTS ARE TRUE AND
CORRECT ON AND AS OF THE INCREASE EFFECTIVE DATE, EXCEPT TO THE EXTENT THAT SUCH
REPRESENTATIONS AND WARRANTIES SPECIFICALLY REFER TO AN EARLIER DATE, IN WHICH
CASE THEY ARE TRUE AND CORRECT AS OF SUCH EARLIER DATE, AND EXCEPT THAT FOR
PURPOSES OF THIS SECTION 2.14, THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
SUBSECTIONS (A) AND (B) OF SECTION 5.05 SHALL BE DEEMED TO REFER TO THE MOST
RECENT STATEMENTS FURNISHED PURSUANT TO CLAUSES (A) AND (B), RESPECTIVELY, OF
SECTION 6.01, AND (B) NO DEFAULT EXISTS.

 

(F)                                    LOANS; REALLOCATION OF OUTSTANDING
AMOUNTS.

 

(I)                                     EXCEPT AS SET FORTH IN SUBSECTION
(II) OF THIS SUBSECTION (F), IF ANY ELIGIBLE ASSIGNEE BECOMES A LENDER HEREUNDER
OR ANY LENDER’S COMMITMENT IS INCREASED PURSUANT TO THIS SECTION, LOANS MADE ON
OR AFTER THE APPLICABLE INCREASE EFFECTIVE DATE SHALL BE MADE IN ACCORDANCE WITH
THE APPLICABLE PERCENTAGES OF EACH LENDER IN EFFECT ON AND AFTER SUCH INCREASE
EFFECTIVE DATE (EXCEPT TO THE EXTENT THAT ANY SUCH LOAN WOULD RESULT IN ANY
LENDER MAKING AN AGGREGATE PRINCIPAL AMOUNT OF LOANS IN EXCESS OF ITS
COMMITMENT, IN WHICH CASE SUCH EXCESS AMOUNT WILL BE ALLOCATED TO AND MADE BY,
ANY NEW LENDERS AND LENDERS WITH INCREASED COMMITMENTS PURSUANT TO SUBSECTION
(B) ABOVE, IN EACH CASE, IN ACCORDANCE WITH THEIR APPLICABLE PERCENTAGES).

 

(II)                                  UPON ANY INCREASE IN THE AGGREGATE
COMMITMENT AMOUNT PURSUANT TO THIS SECTION 2.14 (A) EACH OF THE LENDERS WITH AN
EXISTING COMMITMENT (EACH, AN “EXISTING LENDER”) SHALL ASSIGN TO EACH LENDER
WITH A NEW COMMITMENT (EACH, A “NEW LENDER”) AND EACH OF THE NEW LENDERS SHALL
PURCHASE FROM EACH OF THE EXISTING LENDERS, AT THE PRINCIPAL AMOUNT THEREOF AND
IN THE APPLICABLE CURRENCY OR CURRENCIES, SUCH INTERESTS IN THE LOANS
OUTSTANDING ON SUCH INCREASE EFFECTIVE DATE AS SHALL BE NECESSARY IN ORDER THAT,
AFTER GIVING EFFECT TO ALL SUCH ASSIGNMENTS AND PURCHASES, THE LOANS WILL BE
HELD BY EXISTING LENDERS AND NEW LENDERS RATABLY IN ACCORDANCE WITH THEIR
COMMITMENTS AFTER GIVING EFFECT TO THE ADDITION OF THE COMMITMENTS OF THE NEW
LENDERS, (B) EACH NEW COMMITMENT OF A NEW LENDER SHALL BE DEEMED FOR ALL
PURPOSES A COMMITMENT HEREUNDER AND EACH LOAN MADE THEREUNDER (A “NEW LOAN”)
SHALL BE DEEMED, FOR ALL PURPOSES, A LOAN AND (C) EACH NEW LENDER SHALL BECOME A
LENDER WITH RESPECT TO THE COMMITMENTS AND ALL MATTERS RELATING THERETO.

 

(G)                                 CONFLICTING PROVISIONS.  THIS SECTION SHALL
SUPERSEDE ANY PROVISIONS IN SECTION 2.13 OR 10.01 TO THE CONTRARY.

 

2.15                        CONCERNING JOINT AND SEVERAL LIABILITY OF THE
BORROWERS.

 

(A)                                  EACH OF THE BORROWERS IS ACCEPTING JOINT
AND SEVERAL LIABILITY HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS IN
CONSIDERATION OF THE FINANCIAL ACCOMMODATIONS TO BE PROVIDED BY THE LENDERS AND
THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, FOR THE MUTUAL BENEFIT, DIRECTLY
AND INDIRECTLY, OF EACH OF THE BORROWERS AND IN CONSIDERATION OF THE
UNDERTAKINGS OF EACH OTHER BORROWER TO ACCEPT JOINT AND SEVERAL LIABILITY FOR
THE OBLIGATIONS.

 

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(B)                                 EACH OF THE BORROWERS, JOINTLY AND
SEVERALLY, HEREBY IRREVOCABLY AND UNCONDITIONALLY ACCEPTS, NOT MERELY AS A
SURETY BUT ALSO AS A PRIMARY OBLIGOR AND CO-DEBTOR, JOINT AND SEVERAL LIABILITY
WITH EACH OTHER BORROWER, WITH RESPECT TO THE PAYMENT AND PERFORMANCE OF ALL OF
THE OBLIGATIONS (INCLUDING, WITHOUT LIMITATION, ANY OBLIGATIONS ARISING UNDER
THIS SECTION 2.15), IT BEING THE INTENTION OF THE PARTIES HERETO THAT ALL THE
OBLIGATIONS SHALL BE THE JOINT AND SEVERAL OBLIGATIONS OF EACH OF THE BORROWERS
WITHOUT PREFERENCES OR DISTINCTION AMONG THEM.

 

(C)                                  IF AND TO THE EXTENT THAT ANY OF THE
BORROWERS SHALL FAIL TO MAKE ANY PAYMENT WITH RESPECT TO ANY OF THE OBLIGATIONS
AS AND WHEN DUE OR TO PERFORM ANY OF THE OBLIGATIONS IN ACCORDANCE WITH THE
TERMS THEREOF, THEN, IN EACH SUCH EVENT, THE OTHER BORROWERS WILL MAKE SUCH
PAYMENT WITH RESPECT TO, OR PERFORM, SUCH OBLIGATION.

 

(D)                                 THE OBLIGATIONS OF EACH OF THE BORROWERS
UNDER THE PROVISIONS OF THIS SECTION 2.15 CONSTITUTE THE FULL RECOURSE
OBLIGATIONS OF EACH OF THE BORROWERS ENFORCEABLE AGAINST EACH SUCH PERSON TO THE
FULL EXTENT OF ITS PROPERTIES AND ASSETS, IRRESPECTIVE OF THE VALIDITY,
REGULARITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY OTHER CIRCUMSTANCE WHATSOEVER.

 

(E)                                  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, EACH BORROWER HEREBY WAIVES PROMPTNESS, DILIGENCE, PRESENTMENT, DEMAND,
PROTEST, NOTICE OF ACCEPTANCE OF ITS JOINT AND SEVERAL LIABILITY, NOTICE OF ANY
AND ALL ADVANCES OF THE LOANS MADE UNDER THIS AGREEMENT AND ANY PROMISSORY NOTE
ISSUED HEREUNDER, NOTICE OF OCCURRENCE OF ANY DEFAULT OR EVENT OF DEFAULT
(EXCEPT TO THE EXTENT NOTICE IS EXPRESSLY REQUIRED TO BE GIVEN PURSUANT TO THE
TERMS OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS), OR OF ANY DEMAND
FOR ANY PAYMENT UNDER THIS AGREEMENT, NOTICE OF ANY ACTION AT ANY TIME TAKEN OR
OMITTED BY THE ADMINISTRATIVE AGENT OR THE LENDERS UNDER OR IN RESPECT OF ANY OF
THE OBLIGATIONS HEREUNDER, ANY REQUIREMENT OF DILIGENCE AND, GENERALLY, ALL
DEMANDS, NOTICES AND OTHER FORMALITIES OF EVERY KIND IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.  EACH BORROWER HEREBY WAIVES ALL
DEFENSES WHICH MAY BE AVAILABLE BY VIRTUE OF ANY VALUATION, STAY, MORATORIUM LAW
OR OTHER SIMILAR LAW NOW OR HEREAFTER IN EFFECT, ANY RIGHT TO REQUIRE THE
MARSHALING OF ASSETS OF THE BORROWERS AND ANY OTHER ENTITY OR PERSON PRIMARILY
OR SECONDARILY LIABLE WITH RESPECT TO ANY OF THE OBLIGATIONS, AND ALL SURETY
SHIP DEFENSES GENERALLY.  EACH BORROWER HEREBY ASSENTS TO, AND WAIVES NOTICE OF,
ANY EXTENSION OR POSTPONEMENT OF THE TIME FOR THE PAYMENT, OR PLACE OR MANNER
FOR PAYMENT, COMPROMISE, REFINANCING, CONSOLIDATION OR RENEWALS OF ANY OF THE
OBLIGATIONS HEREUNDER, THE ACCEPTANCE OF ANY PARTIAL PAYMENT THEREON, ANY
WAIVER, CONSENT OR OTHER ACTION OR ACQUIESCENCE BY THE ADMINISTRATIVE AGENT AND
THE LENDERS AT ANY TIME OR TIMES IN RESPECT OF ANY DEFAULT BY ANY BORROWER IN
THE PERFORMANCE OR SATISFACTION OF ANY TERM, COVENANT, CONDITION OR PROVISION OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, ANY AND ALL OTHER INDULGENCES
WHATSOEVER BY THE ADMINISTRATIVE AGENT AND THE LENDERS IN RESPECT OF ANY OF THE
OBLIGATIONS HEREUNDER, AND THE TAKING, ADDITION, SUBSTITUTION OR RELEASE, IN
WHOLE OR IN PART, AT ANY TIME OR TIMES, OF ANY SECURITY FOR ANY OF SUCH
OBLIGATIONS OR THE ADDITION, SUBSTITUTION OR RELEASE, IN WHOLE OR IN PART, OF
ANY BORROWER OR ANY OTHER ENTITY OR PERSON PRIMARILY OR SECONDARILY LIABLE FOR
ANY OBLIGATION. SUCH BORROWER FURTHER AGREES THAT ITS OBLIGATIONS SHALL NOT BE
RELEASED OR DISCHARGED, IN WHOLE OR IN PART, OR OTHERWISE AFFECTED BY THE
ADEQUACY OF ANY RIGHTS WHICH THE ADMINISTRATIVE AGENT OR ANY LENDER MAY HAVE
AGAINST ANY COLLATERAL SECURITY OR OTHER MEANS OF OBTAINING REPAYMENT OF ANY OF
THE OBLIGATIONS, THE IMPAIRMENT OF ANY COLLATERAL SECURITY SECURING THE
OBLIGATIONS, INCLUDING, WITHOUT LIMITATION, THE FAILURE TO PROTECT OR PRESERVE
ANY RIGHTS WHICH ANY ADMINISTRATIVE AGENT OR ANY LENDER MAY HAVE IN SUCH
COLLATERAL SECURITY OR THE SUBSTITUTION, EXCHANGE, SURRENDER, RELEASE, LOSS OR
DESTRUCTION OF ANY SUCH COLLATERAL SECURITY, ANY OTHER ACT OR OMISSION WHICH
MIGHT IN ANY MANNER OR TO ANY EXTENT VARY THE RISK OF SUCH BORROWER, OR
OTHERWISE OPERATE AS A RELEASE OR DISCHARGE OF SUCH BORROWER, ALL OF WHICH MAY
BE DONE WITHOUT NOTICE TO SUCH BORROWER.  IF FOR ANY REASON ANY OTHER BORROWER
HAS NO LEGAL EXISTENCE OR IS UNDER NO LEGAL OBLIGATION TO DISCHARGE ANY OF THE
OBLIGATIONS, OR IF ANY OF THE OBLIGATIONS HAVE BECOME IRRECOVERABLE FROM ANY
OTHER BORROWER BY REASON OF SUCH OTHER BORROWER’S INSOLVENCY, BANKRUPTCY OR
REORGANIZATION OR BY OTHER OPERATION OF LAW OR FOR ANY REASON, THIS AGREEMENT
AND THE OTHER LOAN

 

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DOCUMENTS TO WHICH IT IS A PARTY SHALL NEVERTHELESS BE BINDING ON SUCH BORROWER
TO THE SAME EXTENT AS IF SUCH BORROWER AT ALL TIMES HAD BEEN THE SOLE OBLIGOR ON
SUCH OBLIGATIONS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH
BORROWER ASSENTS TO ANY OTHER ACTION OR DELAY IN ACTING OR FAILURE TO ACT ON THE
PART OF THE ADMINISTRATIVE AGENT AND THE LENDERS, INCLUDING, WITHOUT LIMITATION,
ANY FAILURE STRICTLY OR DILIGENTLY TO ASSERT ANY RIGHT OR TO PURSUE ANY REMEDY
OR TO COMPLY FULLY WITH APPLICABLE LAWS OR REGULATIONS THEREUNDER WHICH MIGHT,
BUT FOR THE PROVISIONS OF THIS SECTION 2.15, AFFORD GROUNDS FOR TERMINATING,
DISCHARGING OR RELIEVING SUCH BORROWER, IN WHOLE OR IN PART, FROM ANY OF ITS
OBLIGATIONS UNDER THIS SECTION 2.15, IT BEING THE INTENTION OF EACH BORROWER
THAT, SO LONG AS ANY OF THE OBLIGATIONS HEREUNDER REMAIN UNSATISFIED, THE
OBLIGATIONS OF SUCH BORROWER UNDER THIS SECTION 2.15 SHALL NOT BE DISCHARGED
EXCEPT BY PERFORMANCE AND THEN ONLY TO THE EXTENT OF SUCH PERFORMANCE. THE
OBLIGATIONS OF EACH BORROWER UNDER THIS SECTION 2.15 SHALL NOT BE DIMINISHED OR
RENDERED UNENFORCEABLE BY ANY WINDING UP, REORGANIZATION, ARRANGEMENT,
LIQUIDATION, RECONSTRUCTION OR SIMILAR PROCEEDING WITH RESPECT TO ANY
RECONSTRUCTION OR SIMILAR PROCEEDING WITH RESPECT TO ANY OTHER BORROWER, OR ANY
OF THE LENDERS.  THE JOINT AND SEVERAL LIABILITY OF THE BORROWERS HEREUNDER
SHALL CONTINUE IN FULL FORCE AND EFFECT NOTWITHSTANDING ANY ABSORPTION, MERGER,
AMALGAMATION OR ANY OTHER CHANGE WHATSOEVER IN THE NAME, OWNERSHIP, MEMBERSHIP,
CONSTITUTION OR PLACE OF FORMATION OF ANY BORROWER OR THE LENDERS.  EACH OF THE
BORROWERS ACKNOWLEDGES AND CONFIRMS THAT IT HAS ITSELF ESTABLISHED ITS OWN
ADEQUATE MEANS OF OBTAINING FROM THE OTHER BORROWERS ON A CONTINUING BASIS ALL
INFORMATION DESIRED BY SUCH BORROWER CONCERNING THE FINANCIAL CONDITION OF THE
OTHER BORROWERS AND THAT EACH SUCH BORROWER WILL LOOK TO THE OTHER BORROWERS AND
NOT TO THE ADMINISTRATIVE AGENT OR ANY LENDER IN ORDER FOR SUCH BORROWER TO KEEP
ADEQUATELY INFORMED OF CHANGES IN THE OTHER BORROWERS’ RESPECTIVE FINANCIAL
CONDITIONS.

 

(F)                                    THE PROVISIONS OF THIS SECTION 2.15 ARE
MADE FOR THE BENEFIT OF THE LENDERS AND THE ADMINISTRATIVE AGENT AND THEIR
RESPECTIVE PERMITTED SUCCESSORS AND ASSIGNS, AND MAY BE ENFORCED BY IT OR THEM
FROM TIME TO TIME AGAINST ANY OR ALL OF THE BORROWERS AS OFTEN AS OCCASION
THEREFOR MAY ARISE AND WITHOUT REQUIREMENT ON THE PART OF THE LENDERS, THE
ADMINISTRATIVE AGENT OR SUCH SUCCESSOR OR ASSIGN FIRST TO MARSHAL ANY OF ITS OR
THEIR CLAIMS OR TO EXERCISE ANY OF ITS OR THEIR RIGHTS AGAINST THE OTHER
BORROWERS OR TO EXHAUST ANY REMEDIES AVAILABLE TO IT OR THEM AGAINST ANY OTHER
BORROWER OR TO RESORT TO ANY OTHER SOURCE OR MEANS OF OBTAINING PAYMENT OF ANY
OF THE OBLIGATIONS HEREUNDER OR TO ELECT ANY OTHER REMEDY.  THE PROVISIONS OF
THIS SECTION 2.15 SHALL REMAIN IN EFFECT UNTIL ALL OF THE OBLIGATIONS SHALL HAVE
BEEN PAID IN FULL OR OTHERWISE FULLY SATISFIED.  IF AT ANY TIME, ANY PAYMENT, OR
ANY PART THEREOF; MADE IN RESPECT OF ANY OF THE OBLIGATIONS, IS RESCINDED OR
MUST OTHERWISE BE RESTORED OR RETURNED BY ANY LENDER OR ANY ADMINISTRATIVE AGENT
UPON THE INSOLVENCY, BANKRUPTCY OR REORGANIZATION OF ANY OF THE BORROWERS, OR
OTHERWISE, THE PROVISIONS OF THIS SECTION 2.15 WILL FORTHWITH BE REINSTATED IN
EFFECT, AS THOUGH SUCH PAYMENT HAD NOT BEEN MADE.

 

(G)                                 EACH OF THE BORROWERS HEREBY AGREES THAT IT
WILL NOT ENFORCE ANY OF ITS RIGHTS OF REIMBURSEMENT, CONTRIBUTION, SUBROGATION
OR THE LIKE AGAINST ANY OTHER BORROWER WITH RESPECT TO ANY LIABILITY INCURRED BY
IT HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS, ANY PAYMENTS MADE BY IT
TO ANY OF THE LENDERS OR THE ADMINISTRATIVE AGENT WITH RESPECT TO ANY OF THE
OBLIGATIONS OR ANY COLLATERAL SECURITY THEREFOR UNTIL SUCH TIME AS ALL OF THE
OBLIGATIONS HAVE BEEN INDEFEASIBLY PAID IN FULL IN CASH.  ANY CLAIM WHICH ANY
BORROWER MAY HAVE AGAINST ANY OTHER BORROWER WITH RESPECT TO ANY PAYMENTS TO THE
LENDERS OR THE ADMINISTRATIVE AGENT HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENTS
ARE HEREBY EXPRESSLY MADE SUBORDINATE AND JUNIOR IN RIGHT OF PAYMENT, WITHOUT
LIMITATION AS TO ANY INCREASES IN THE OBLIGATIONS ARISING HEREUNDER OR
THEREUNDER, TO THE PRIOR PAYMENT IN FULL OF THE OBLIGATIONS AND, IN THE EVENT OF
ANY INSOLVENCY, BANKRUPTCY, RECEIVERSHIP, LIQUIDATION, REORGANIZATION OR OTHER
SIMILAR PROCEEDING UNDER THE LAWS OF ANY JURISDICTION RELATING TO ANY BORROWER,
ITS DEBTS OR ITS ASSETS, WHETHER VOLUNTARY OR INVOLUNTARY, ALL SUCH OBLIGATIONS
SHALL BE PAID IN FULL BEFORE ANY PAYMENT OR DISTRIBUTION OF ANY CHARACTER,
WHETHER IN CASH, SECURITIES OR OTHER PROPERTY, SHALL BE MADE TO ANY OTHER
BORROWER THEREFORE.

 

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(H)                                 EACH OF THE BORROWERS HEREBY AGREES THAT THE
PAYMENT OF ANY AMOUNTS DUE WITH RESPECT TO THE INDEBTEDNESS OWING BY ANY
BORROWER TO ANY OTHER BORROWER IS HEREBY SUBORDINATED TO THE PRIOR PAYMENT IN
FULL IN CASH OF THE OBLIGATIONS.  EACH BORROWER HEREBY AGREES THAT AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF ANY DEFAULT OR EVENT OF DEFAULT, SUCH
BORROWER WILL NOT DEMAND, SUE FOR OR OTHERWISE ATTEMPT TO COLLECT ANY
INDEBTEDNESS OF ANY OTHER BORROWER OWING TO SUCH BORROWER UNTIL THE OBLIGATIONS
SHALL HAVE BEEN PAID IN FULL IN CASH.  IF, NOTWITHSTANDING THE FOREGOING
SENTENCE, SUCH BORROWER SHALL COLLECT, ENFORCE OR RECEIVE ANY AMOUNTS IN RESPECT
OF SUCH INDEBTEDNESS, SUCH AMOUNTS SHALL BE COLLECTED, ENFORCED AND RECEIVED BY
SUCH BORROWER AS TRUSTEE FOR THE ADMINISTRATIVE AGENT AND BE PAID OVER TO THE
ADMINISTRATIVE AGENT FOR THE PRO RATA ACCOUNTS OF THE LENDERS TO BE APPLIED TO
REPAY THE OBLIGATIONS.

 

2.16                        CONTRIBUTION.

 

(A)                                  TO THE EXTENT THAT ANY BORROWER SHALL MAKE
A PAYMENT UNDER SECTION 2.15 OF ALL OR ANY OF THE OBLIGATIONS (OTHER THAN LOANS
MADE TO THAT BORROWER FOR WHICH IT IS PRIMARILY LIABLE) (A “GUARANTOR PAYMENT”)
THAT, TAKING INTO ACCOUNT ALL OTHER GUARANTOR PAYMENTS THEN PREVIOUSLY OR
CONCURRENTLY MADE BY ANY OTHER BORROWER, EXCEEDS THE AMOUNT THAT SUCH BORROWER
WOULD OTHERWISE HAVE PAID IF EACH BORROWER HAD PAID THE AGGREGATE OBLIGATIONS
SATISFIED BY SUCH GUARANTOR PAYMENT IN THE SAME PORTION THAT SUCH BORROWER’S
“ALLOCABLE AMOUNT” (AS DEFINED BELOW) (AS DETERMINED IMMEDIATELY PRIOR TO SUCH
GUARANTOR PAYMENT) BORE TO THE AGGREGATE ALLOCABLE AMOUNTS OF EACH OF THE
BORROWERS AS DETERMINED IMMEDIATELY PRIOR TO THE MAKING OF SUCH GUARANTOR
PAYMENT, THEN, FOLLOWING INDEFEASIBLE PAYMENT IN FULL IN CASH OF THE OBLIGATIONS
AND TERMINATION OF THE COMMITMENTS, SUCH BORROWER SHALL BE ENTITLED TO RECEIVE
CONTRIBUTION AND INDEMNIFICATION PAYMENTS FROM, AND BE REIMBURSED BY, THE OTHER
BORROWERS FOR THE NET AMOUNT OF SUCH EXCESS, PRO RATA BASED UPON THEIR
RESPECTIVE ALLOCABLE AMOUNTS IN EFFECT IMMEDIATELY PRIOR TO SUCH GUARANTOR
PAYMENT.

 

(B)                                 AS OF ANY DATE OF DETERMINATION, THE
“ALLOCABLE AMOUNT” OF ANY BORROWER SHALL BE EQUAL TO THE MAXIMUM AMOUNT OF THE
CLAIM THAT COULD THEN BE RECOVERED FROM SUCH BORROWER UNDER SECTION 2.16 WITHOUT
RENDERING SUCH CLAIM VOIDABLE OR AVOIDABLE UNDER SECTION 548 OF CHAPTER 11 OF
THE BANKRUPTCY CODE OR UNDER ANY APPLICABLE STATE UNIFORM FRAUDULENT TRANSFER
ACT, UNIFORM FRAUDULENT CONVEYANCE ACT OR SIMILAR STATUTE OR COMMON LAW.

 

(C)                                  THIS SECTION 2.16 IS INTENDED ONLY TO
DEFINE THE RELATIVE RIGHTS OF BORROWERS AND NOTHING SET FORTH IN THIS
SECTION 2.16 IS INTENDED OR SHALL IMPAIR THE OBLIGATIONS OF THE BORROWERS,
JOINTLY AND SEVERALLY, TO PAY ANY AMOUNTS AS AND WHEN THE SAME SHALL BECOME DUE
AND PAYABLE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, INCLUDING
SECTION 2.15.  NOTHING CONTAINED IN THIS SECTION 2.16 SHALL LIMIT THE LIABILITY
OF ANY BORROWER TO PAY THE LOANS MADE DIRECTLY OR INDIRECTLY TO THAT BORROWER
AND ACCRUED INTEREST, FEES AND EXPENSES WITH RESPECT THERETO FOR WHICH SUCH
BORROWER SHALL BE PRIMARILY LIABLE.

 

(D)                                 THE PARTIES HERETO ACKNOWLEDGE THAT THE
RIGHTS OF CONTRIBUTION AND INDEMNIFICATION OF ANY BORROWER UNDER THIS
SECTION 2.16 SHALL CONSTITUTE ASSETS OF SUCH BORROWER.

 

(E)                                  THE RIGHTS OF AN INDEMNIFYING BORROWER
AGAINST THE OTHER BORROWERS UNDER THIS SECTION SHALL BE EXERCISABLE UPON THE
FULL AND INDEFEASIBLE PAYMENT OF THE OBLIGATIONS AND THE TERMINATION OF
COMMITMENTS.

 

2.17                        COLLATERAL SECURITY.  THE OBLIGATIONS SHALL BE
SECURED BY A PERFECTED FIRST PRIORITY SECURITY INTEREST IN ALL OF THE BORROWERS’
INTEREST IN THE COLLATERAL, WHETHER NOW OWNED OR HEREAFTER ACQUIRED, AS
DESCRIBED IN THE SECURITY DOCUMENTS TO WHICH ANY OF THE BORROWERS IS A PARTY.

 

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2.18                        ADDITIONAL BORROWERS.                       ANY
DIRECT OR INDIRECT WHOLLY OWNED SUBSIDIARY OF KKR FINANCIAL (I) DESIGNATED BY AN
EXISTING BORROWER AND (II) OTHER THAN IN THE CASE OF SUCH SUBSIDIARIES ORGANIZED
IN THE CAYMAN ISLANDS OR THE UNITED STATES (OR ANY STATE OR TERRITORY THEREOF,
OR THE DISTRICT OF COLUMBIA), CONSENTED TO BY THE ADMINISTRATIVE AGENT AND EACH
LENDER (IN EACH CASE, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD OR DELAYED),
MAY BECOME A BORROWER HEREUNDER BY EXECUTING A CUSTOMARY JOINDER AGREEMENT,
REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT AND THE BORROWERS, AND
DELIVERING CUSTOMARY CERTIFICATES CONSISTENT WITH THOSE DELIVERED IN CONNECTION
WITH SECTION 4.02(D), CUSTOMARY LEGAL OPINIONS AND SUCH OTHER DOCUMENTATION AS
MAY BE REASONABLY REQUESTED BY THE ADMINISTRATIVE AGENT.

 

2.19                        Defaulting Lender Provisions.

 

(A)                                  CONDITIONS PRECEDENT.  IN ADDITION TO THE
OTHER CONDITIONS PRECEDENT HEREIN SET FORTH, IF ANY LENDER BECOMES, AND DURING
THE PERIOD IT REMAINS, A DEFAULTING LENDER OR A POTENTIAL DEFAULTING LENDER, THE
ISSUING BANK WILL NOT BE REQUIRED TO ISSUE ANY LETTER OF CREDIT OR TO AMEND ANY
OUTSTANDING LETTER OF CREDIT TO INCREASE THE FACE AMOUNT THEREOF, ALTER THE
DRAWING TERMS THEREUNDER OR EXTEND THE EXPIRY DATE THEREOF, AND THE SWINGLINE
LENDER WILL NOT BE REQUIRED TO MAKE ANY SWINGLINE LOAN, UNLESS THE ISSUING BANK
OR THE SWINGLINE LENDER, AS THE CASE MAY BE, IS SATISFIED THAT ANY EXPOSURE THAT
WOULD RESULT THEREFROM IS FULLY COVERED OR ELIMINATED BY ANY COMBINATION
SATISFACTORY TO THE ISSUING BANK OR SWINGLINE LENDER OF THE FOLLOWING:

 

(I)                                     IN THE CASE OF A DEFAULTING LENDER, THE
LC EXPOSURE AND THE SWINGLINE EXPOSURE OF SUCH DEFAULTING LENDER IS REALLOCATED,
AS TO OUTSTANDING AND FUTURE LETTERS OF CREDIT AND SWINGLINE LOANS, TO THE
NON-DEFAULTING LENDERS AS PROVIDED IN CLAUSE (1) OF SECTION 2.19(C);

 

(II)                                  IN THE CASE OF A DEFAULTING LENDER OR A
POTENTIAL DEFAULTING LENDER, WITHOUT LIMITING THE PROVISIONS OF SECTION 2.19(B),
THE BORROWERS CASH COLLATERALIZE THE OBLIGATIONS OF THE BORROWERS IN RESPECT OF
SUCH LETTER OF CREDIT OR SWINGLINE LOAN IN AN AMOUNT AT LEAST EQUAL TO THE
AGGREGATE AMOUNT OF THE UNREALLOCATED OBLIGATIONS (CONTINGENT OR OTHERWISE) OF
SUCH DEFAULTING LENDER OR POTENTIAL DEFAULTING LENDER IN RESPECT OF SUCH LETTER
OF CREDIT OR SWINGLINE LOAN, OR MAKES OTHER ARRANGEMENTS SATISFACTORY TO THE
ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE SWINGLINE LENDER IN THEIR SOLE
DISCRETION TO PROTECT THEM AGAINST THE RISK OF NON-PAYMENT BY SUCH DEFAULTING
LENDER OR POTENTIAL DEFAULTING LENDER; AND

 

(III)                               IN THE CASE OF A DEFAULTING LENDER OR A
POTENTIAL DEFAULTING LENDER, THEN IN THE CASE OF A PROPOSED ISSUANCE OF A LETTER
OF CREDIT OR MAKING OF A SWINGLINE LOAN, BY AN INSTRUMENT OR INSTRUMENTS IN FORM
AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT, AND TO THE ISSUING BANK
AND THE SWINGLINE LENDER, AS THE CASE MAY BE, THE BORROWERS AGREE THAT THE FACE
AMOUNT OF SUCH REQUESTED LETTER OF CREDIT OR THE PRINCIPAL AMOUNT OF SUCH
REQUESTED SWINGLINE LOAN WILL BE REDUCED BY AN AMOUNT EQUAL TO THE
UNREALLOCATED, NON-CASH COLLATERALIZED PORTION THEREOF AS TO WHICH SUCH
DEFAULTING LENDER OR POTENTIAL DEFAULTING LENDER WOULD OTHERWISE BE LIABLE, IN
WHICH CASE THE OBLIGATIONS OF THE NON-DEFAULTING LENDERS IN RESPECT OF SUCH
LETTER OF CREDIT OR SWINGLINE LOAN WILL, SUBJECT TO THE FIRST PROVISO BELOW, BE
ON A PRO RATA BASIS IN ACCORDANCE WITH THE COMMITMENTS OF THE NON-DEFAULTING
LENDERS, AND THE PRO RATA PAYMENT PROVISIONS OF SECTION 2.13 WILL BE DEEMED
ADJUSTED TO REFLECT THIS PROVISION;

 

PROVIDED THAT (A) THE SUM OF EACH NON-DEFAULTING LENDER’S TOTAL REVOLVING CREDIT
EXPOSURE, TOTAL SWINGLINE EXPOSURE AND TOTAL LC EXPOSURE MAY NOT IN ANY EVENT
EXCEED THE COMMITMENT OF SUCH NON-DEFAULTING LENDER, AND (B) NEITHER ANY SUCH
REALLOCATION NOR ANY PAYMENT BY A NON-DEFAULTING LENDER PURSUANT THERETO NOR ANY
SUCH CASH COLLATERALIZATION OR REDUCTION WILL CONSTITUTE A WAIVER OR RELEASE OF
ANY CLAIM THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE
SWINGLINE LENDER OR ANY OTHER LENDER MAY HAVE AGAINST SUCH DEFAULTING LENDER, OR
CAUSE SUCH DEFAULTING LENDER OR POTENTIAL DEFAULTING LENDER TO BE A
NON-DEFAULTING LENDER.

 

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(B)                                 CASH COLLATERAL CALL.  IF ANY LENDER
BECOMES, AND DURING THE PERIOD IT REMAINS, A DEFAULTING LENDER OR A POTENTIAL
DEFAULTING LENDER, IF ANY LETTER OF CREDIT OR SWINGLINE LOAN IS AT THE TIME
OUTSTANDING, THE ISSUING BANK AND THE SWINGLINE LENDER, AS THE CASE MAY BE, MAY
(EXCEPT, IN THE CASE OF A DEFAULTING LENDER, TO THE EXTENT THE COMMITMENTS HAVE
BEEN FULLY REALLOCATED PURSUANT TO SECTION 2.19(C)), BY NOTICE TO THE BORROWERS
AND SUCH DEFAULTING LENDER OR POTENTIAL DEFAULTING LENDER THROUGH THE
ADMINISTRATIVE AGENT, REQUIRE THE BORROWERS TO CASH COLLATERALIZE THE
OBLIGATIONS OF THE BORROWERS TO THE ISSUING BANK AND THE SWINGLINE LENDER IN
RESPECT OF SUCH LETTER OF CREDIT OR SWINGLINE LOAN IN AMOUNT AT LEAST EQUAL TO
THE AGGREGATE AMOUNT OF THE UNREALLOCATED OBLIGATIONS (CONTINGENT OR OTHERWISE)
OF SUCH DEFAULTING LENDER OR SUCH POTENTIAL DEFAULTING LENDER IN RESPECT
THEREOF, OR TO MAKE OTHER ARRANGEMENTS SATISFACTORY TO THE ADMINISTRATIVE AGENT,
AND TO THE ISSUING BANK AND THE SWINGLINE LENDER, AS THE CASE MAY BE, IN THEIR
SOLE DISCRETION TO PROTECT THEM AGAINST THE RISK OF NON-PAYMENT BY SUCH
DEFAULTING LENDER OR POTENTIAL DEFAULTING LENDER.

 

(C)                                  REALLOCATION OF DEFAULTING LENDER
COMMITMENT, ETC.  IF A LENDER BECOMES, AND DURING THE PERIOD IT REMAINS, A
DEFAULTING LENDER, THE FOLLOWING PROVISIONS SHALL APPLY WITH RESPECT TO ANY
OUTSTANDING LC EXPOSURE AND ANY OUTSTANDING SWINGLINE EXPOSURE OF SUCH
DEFAULTING LENDER:

 

(I)                                     THE LC EXPOSURE AND THE SWINGLINE
EXPOSURE OF SUCH DEFAULTING LENDER WILL, SUBJECT TO THE LIMITATION IN THE FIRST
PROVISO BELOW, AUTOMATICALLY BE REALLOCATED (EFFECTIVE ON THE DAY SUCH LENDER
BECOMES A DEFAULTING LENDER) AMONG THE NON-DEFAULTING LENDERS PRO RATA IN
ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS;  PROVIDED THAT (A) THE SUM OF EACH
NON-DEFAULTING LENDER’S TOTAL REVOLVING CREDIT EXPOSURE, TOTAL SWINGLINE
EXPOSURE AND TOTAL LC EXPOSURE MAY NOT IN ANY EVENT EXCEED THE COMMITMENT OF
SUCH NON-DEFAULTING LENDER AS IN EFFECT AT THE TIME OF SUCH REALLOCATION AND
(B) NEITHER SUCH REALLOCATION NOR ANY PAYMENT BY A NON-DEFAULTING LENDER
PURSUANT THERETO WILL CONSTITUTE A WAIVER OR RELEASE OF ANY CLAIM THE BORROWER,
THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE SWINGLINE LENDER OR ANY OTHER
LENDER MAY HAVE AGAINST SUCH DEFAULTING LENDER OR CAUSE SUCH DEFAULTING LENDER
TO BE A NON-DEFAULTING LENDER; AND

 

(II)                                  TO THE EXTENT THAT ANY PORTION (THE
“UNREALLOCATED PORTION”) OF THE DEFAULTING LENDER’S LC EXPOSURE AND SWINGLINE
EXPOSURE CANNOT BE SO REALLOCATED, WHETHER BY REASON OF THE FIRST PROVISO IN
CLAUSE (I) ABOVE OR OTHERWISE, THE BORROWERS WILL, NOT LATER THAN 10 BUSINESS
DAYS AFTER DEMAND BY THE ADMINISTRATIVE AGENT (AT THE DIRECTION OF THE ISSUING
BANK AND/OR THE SWINGLINE LENDER, AS THE CASE MAY BE), (A) CASH COLLATERALIZE
THE OBLIGATIONS OF THE BORROWERS TO THE ISSUING BANK AND THE SWINGLINE LENDER IN
RESPECT OF SUCH LC EXPOSURE OR SWINGLINE EXPOSURE, AS THE CASE MAY BE, IN AN
AMOUNT AT LEAST EQUAL TO THE AGGREGATE AMOUNT OF THE UNREALLOCATED PORTION OF
SUCH LC EXPOSURE OR SWINGLINE EXPOSURE, OR (B) IN THE CASE OF SUCH SWINGLINE
EXPOSURE, PREPAY (SUBJECT TO CLAUSE (III) BELOW) AND/OR CASH COLLATERALIZE IN
FULL THE UNREALLOCATED PORTION THEREOF, OR (C) MAKE OTHER ARRANGEMENTS
SATISFACTORY TO THE ADMINISTRATIVE AGENT, AND TO THE ISSUING BANK AND THE
SWINGLINE LENDER, AS THE CASE MAY BE, IN THEIR SOLE DISCRETION TO PROTECT THEM
AGAINST THE RISK OF NON-PAYMENT BY SUCH DEFAULTING LENDER; AND

 

(III)                               ANY AMOUNT (OTHER THAN FEES THAT WOULD
OTHERWISE BE PAYABLE BY THE BORROWERS PURSUANT TO SECTION 2.09(A), WHICH FOR
AVOIDANCE OF DOUBT, SHALL CEASE TO ACCRUE OR BE PAYABLE ON THE COMMITMENTS OF
SUCH DEFAULTING LENDER) PAID BY THE BORROWERS FOR THE ACCOUNT OF A DEFAULTING
LENDER UNDER THIS AGREEMENT (WHETHER ON ACCOUNT OF PRINCIPAL, INTEREST,
INDEMNITY PAYMENTS OR OTHER AMOUNTS) WILL NOT BE PAID OR DISTRIBUTED TO SUCH
DEFAULTING LENDER, BUT WILL INSTEAD BE RETAINED BY THE ADMINISTRATIVE AGENT IN A
SEGREGATED NON-INTEREST BEARING ACCOUNT UNTIL

 

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(SUBJECT TO SECTION 2.19(H)) THE TERMINATION OF THE COMMITMENTS AND PAYMENT IN
FULL OF ALL OBLIGATIONS OF THE BORROWERS HEREUNDER AND WILL BE APPLIED BY THE
ADMINISTRATIVE AGENT, TO THE FULLEST EXTENT PERMITTED BY LAW, TO THE MAKING OF
PAYMENTS FROM TIME TO TIME IN THE FOLLOWING ORDER OF PRIORITY:  FIRST TO THE
PAYMENT OF ANY AMOUNTS OWING BY SUCH DEFAULTING LENDER TO THE ADMINISTRATIVE
AGENT UNDER THIS AGREEMENT, SECOND TO THE PAYMENT OF ANY AMOUNTS OWING BY SUCH
DEFAULTING LENDER TO THE ISSUING BANK OR THE SWINGLINE LENDER (PRO RATA AS TO
THE RESPECTIVE AMOUNTS OWING TO EACH OF THEM) UNDER THIS AGREEMENT, THIRD TO THE
PAYMENT OF POST-DEFAULT INTEREST AND THEN CURRENT INTEREST DUE AND PAYABLE TO
THE LENDERS HEREUNDER OTHER THAN DEFAULTING LENDERS, RATABLY AMONG THEM IN
ACCORDANCE WITH THE AMOUNTS OF SUCH INTEREST THEN DUE AND PAYABLE TO THEM,
FOURTH TO THE PAYMENT OF FEES THEN DUE AND PAYABLE TO THE NON-DEFAULTING LENDERS
HEREUNDER, RATABLY AMONG THEM IN ACCORDANCE WITH THE AMOUNTS OF SUCH FEES THEN
DUE AND PAYABLE TO THEM, FIFTH TO PAY PRINCIPAL AND UNREIMBURSED LC
DISBURSEMENTS THEN DUE AND PAYABLE TO THE NON-DEFAULTING LENDERS HEREUNDER
RATABLY IN ACCORDANCE WITH THE AMOUNTS THEREOF THEN DUE AND PAYABLE TO THEM,
SIXTH TO THE RATABLE PAYMENT OF OTHER AMOUNTS THEN DUE AND PAYABLE TO THE
NON-DEFAULTING LENDERS, AND SEVENTH AFTER THE TERMINATION OF THE COMMITMENTS AND
PAYMENT IN FULL OF ALL OBLIGATIONS OF THE BORROWERS HEREUNDER, TO PAY AMOUNTS
OWING UNDER THIS AGREEMENT TO SUCH DEFAULTING LENDER OR AS A COURT OF COMPETENT
JURISDICTION MAY OTHERWISE DIRECT.

 

(D)           RIGHT TO GIVE DRAWDOWN NOTICES.  IN FURTHERANCE OF THE FOREGOING,
IF ANY LENDER BECOMES, AND DURING THE PERIOD IT REMAINS, A DEFAULTING LENDER OR
A POTENTIAL DEFAULTING LENDER, EACH OF THE ISSUING BANK AND THE SWINGLINE LENDER
IS HEREBY AUTHORIZED BY THE BORROWERS (WHICH AUTHORIZATION IS IRREVOCABLE AND
COUPLED WITH AN INTEREST) TO GIVE, IN ITS DISCRETION, THROUGH THE ADMINISTRATIVE
AGENT, REVOLVING LOAN NOTICE PURSUANT TO SECTION 2.02 IN SUCH AMOUNTS AND IN
SUCH TIMES AS MAY BE REQUIRED TO (I) REIMBURSE AN OUTSTANDING LC DISBURSEMENT,
(II) REPAY AN OUTSTANDING SWINGLINE LOAN, AND/OR (III) CASH COLLATERALIZE THE
OBLIGATIONS OF THE BORROWERS IN RESPECT OF OUTSTANDING LETTERS OF CREDIT OR
SWINGLINE LOANS IN AN AMOUNT AT LEAST EQUAL TO THE AGGREGATE AMOUNT OF THE
OBLIGATIONS (CONTINGENT OR OTHERWISE) OF SUCH DEFAULTING LENDER OR POTENTIAL
DEFAULTING LENDER IN RESPECT OF SUCH LETTER OF CREDIT OR SWINGLINE LOAN.

 

(E)           FEES.  ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, DURING
SUCH PERIOD AS A LENDER IS A DEFAULTING LENDER, SUCH DEFAULTING LENDER WILL NOT
BE ENTITLED TO ANY FEES ACCRUING DURING SUCH PERIOD PURSUANT TO SECTIONS
2.09(A) AND 2.09(B) (WITHOUT PREJUDICE TO THE RIGHTS OF THE LENDERS OTHER THAN
DEFAULTING LENDERS IN RESPECT OF SUCH FEES), PROVIDED THAT (A) TO THE EXTENT
THAT A PORTION OF THE LC EXPOSURE OR THE SWINGLINE EXPOSURE OF SUCH DEFAULTING
LENDER IS REALLOCATED TO THE NON-DEFAULTING LENDERS PURSUANT TO SECTION 2.19(C),
SUCH FEES THAT WOULD HAVE ACCRUED FOR THE BENEFIT OF SUCH DEFAULTING LENDER WILL
INSTEAD ACCRUE FOR THE BENEFIT OF AND BE PAYABLE TO SUCH NON-DEFAULTING LENDERS,
PRO RATA IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS, AND (B) TO THE EXTENT
ANY PORTION OF SUCH LC EXPOSURE OR SWINGLINE EXPOSURE CANNOT BE SO REALLOCATED,
SUCH FEES WILL INSTEAD ACCRUE FOR THE BENEFIT OF AND BE PAYABLE TO THE ISSUING
BANK AND THE SWINGLINE LENDER AS THEIR INTERESTS APPEAR (AND THE PRO RATA
PAYMENT PROVISIONS OF SECTION 2.13 WILL AUTOMATICALLY BE DEEMED ADJUSTED TO
REFLECT THE PROVISIONS OF THIS SECTION).

 

(F)            REMOVAL OF ADMINISTRATIVE AGENT.  ANYTHING HEREIN TO THE CONTRARY
NOTWITHSTANDING, IF AT ANY TIME THE REQUISITE LENDERS DETERMINE THAT THE PERSON
SERVING AS ADMINISTRATIVE AGENT IS (WITHOUT TAKING INTO ACCOUNT ANY PROVISION IN
THE DEFINITION OF “DEFAULTING LENDER” OR “POTENTIAL DEFAULTING LENDER” REQUIRING
NOTICE FROM THE ADMINISTRATIVE AGENT OR ANY OTHER PARTY) A DEFAULTING LENDER OR
A POTENTIAL DEFAULTING LENDER, THE REQUISITE LENDERS (DETERMINED AFTER GIVING
EFFECT TO SECTION 10.01) MAY BY NOTICE TO THE BORROWERS AND SUCH PERSON REMOVE
SUCH PERSON AS ADMINISTRATIVE AGENT AND APPOINT A REPLACEMENT ADMINISTRATIVE
AGENT REASONABLY ACCEPTABLE TO THE BORRROWERS.  SUCH REMOVAL WILL, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BE EFFECTIVE ON THE EARLIER OF
(I) THE DATE A REPLACEMENT ADMINISTRATIVE AGENT IS APPOINTED AND (II) THE DATE
60 BUSINESS DAYS AFTER THE GIVING OF SUCH NOTICE BY THE REQUISITE LENDERS
(REGARDLESS OF WHETHER A REPLACEMENT ADMINISTRATIVE AGENT HAS BEEN APPOINTED).

 

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(G)           TERMINATION OF DEFAULTING LENDER COMMITMENT.  THE BORROWERS MAY
TERMINATE THE UNUSED AMOUNT OF THE COMMITMENT OF A DEFAULTING LENDER UPON NOT
LESS THAN TWO BUSINESS DAYS’ PRIOR NOTICE TO THE ADMINISTRATIVE AGENT (WHICH
WILL PROMPTLY NOTIFY THE LENDERS THEREOF), AND IN SUCH EVENT THE PROVISIONS OF
SECTION 2.19(C)(III) WILL APPLY TO ALL AMOUNTS THEREAFTER PAID BY THE BORROWERS
FOR THE ACCOUNT OF SUCH DEFAULTING LENDER UNDER THIS AGREEMENT (WHETHER ON
ACCOUNT OF PRINCIPAL, INTEREST, FEES, INDEMNITY OR OTHER AMOUNTS), PROVIDED THAT
SUCH TERMINATION WILL NOT BE DEEMED TO BE A WAIVER OR RELEASE OF ANY CLAIM THE
BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE SWINGLINE LENDER OR
ANY LENDER MAY HAVE AGAINST SUCH DEFAULTING LENDER.

 

(H)           CURE.  IF THE BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK
AND THE SWINGLINE LENDER AGREE IN WRITING IN THEIR DISCRETION THAT A LENDER THAT
IS A DEFAULTING LENDER OR A POTENTIAL DEFAULTING LENDER SHOULD NO LONGER BE
DEEMED TO BE A DEFAULTING LENDER OR POTENTIAL DEFAULTING LENDER, AS THE CASE MAY
BE, THE ADMINISTRATIVE AGENT WILL SO NOTIFY THE PARTIES HERETO, WHEREUPON AS OF
THE EFFECTIVE DATE SPECIFIED IN SUCH NOTICE AND SUBJECT TO ANY CONDITIONS SET
FORTH THEREIN (WHICH MAY INCLUDE ARRANGEMENTS WITH RESPECT TO ANY AMOUNTS THEN
HELD IN THE SEGREGATED ACCOUNT REFERRED TO IN SECTION 2.19(C)), SUCH LENDER
WILL, TO THE EXTENT APPLICABLE, PURCHASE SUCH PORTION OF OUTSTANDING LOANS OF
THE OTHER LENDERS AND/OR MAKE SUCH OTHER ADJUSTMENTS AS THE ADMINISTRATIVE AGENT
MAY DETERMINE TO BE NECESSARY TO CAUSE THE REVOLVING CREDIT EXPOSURE, LC
EXPOSURE AND SWINGLINE EXPOSURE OF THE LENDERS TO BE ON A PRO RATA BASIS IN
ACCORDANCE WITH THEIR RESPECTIVE COMMITMENTS, WHEREUPON SUCH LENDER WILL CEASE
TO BE A DEFAULTING LENDER OR POTENTIAL DEFAULTING LENDER AND WILL BE A
NON-DEFAULTING LENDER (AND SUCH EXPOSURE OF EACH LENDER WILL AUTOMATICALLY BE
ADJUSTED ON A PROSPECTIVE BASIS TO REFLECT THE FOREGOING); PROVIDED THAT NO
ADJUSTMENTS WILL BE MADE RETROACTIVELY WITH RESPECT TO FEES ACCRUED OR PAYMENTS
MADE BY OR ON BEHALF OF THE BORROWERS WHILE SUCH LENDER WAS A DEFAULTING LENDER;
AND PROVIDED, FURTHER, THAT EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY AGREED BY
THE AFFECTED PARTIES, NO CHANGE HEREUNDER FROM DEFAULTING LENDER OR POTENTIAL
DEFAULTING LENDER TO NON-DEFAULTING LENDER WILL CONSTITUTE A WAIVER OR RELEASE
OF ANY CLAIM OF ANY PARTY HEREUNDER ARISING FROM SUCH LENDER’S HAVING BEEN A
DEFAULTING LENDER OR POTENTIAL DEFAULTING LENDER.

 

ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        TAXES.

 

(A)           PAYMENTS FREE OF TAXES.  ANY AND ALL PAYMENTS BY OR ON ACCOUNT OF
ANY OBLIGATION OF THE BORROWERS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT SHALL
BE MADE FREE AND CLEAR OF AND WITHOUT REDUCTION OR WITHHOLDING FOR ANY
INDEMNIFIED TAXES, PROVIDED THAT IF THE BORROWERS SHALL BE REQUIRED BY
APPLICABLE LAW TO DEDUCT ANY INDEMNIFIED 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 OR LENDER, AS THE CASE MAY BE, RECEIVES
AN AMOUNT EQUAL TO THE SUM IT WOULD HAVE RECEIVED HAD NO SUCH DEDUCTIONS BEEN
MADE, (II) THE BORROWERS SHALL MAKE SUCH DEDUCTIONS OR WITHHOLDINGS AND
(III) THE BORROWERS SHALL TIMELY PAY THE FULL AMOUNT DEDUCTED TO THE RELEVANT
GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(B)           PAYMENT OF OTHER TAXES BY THE BORROWERS.  WITHOUT LIMITING THE
PROVISIONS OF SUBSECTION (A) ABOVE, THE BORROWERS SHALL TIMELY PAY ANY OTHER
TAXES TO THE RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE LAW.

 

(C)           INDEMNIFICATION BY THE BORROWERS.  THE BORROWERS SHALL INDEMNIFY
THE ADMINISTRATIVE AGENT AND EACH LENDER, WITHIN 10 DAYS AFTER WRITTEN DEMAND
THEREFOR, FOR THE FULL AMOUNT OF ANY INDEMNIFIED TAXES OR OTHER TAXES (INCLUDING
INDEMNIFIED TAXES OR OTHER TAXES IMPOSED OR ASSERTED ON OR ATTRIBUTABLE TO
AMOUNTS PAYABLE UNDER THIS SECTION) PAID BY THE ADMINISTRATIVE AGENT OR ANY SUCH

 

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LENDER, AS THE CASE MAY BE, 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; PROVIDED, HOWEVER THE BORROWERS SHALL NOT INDEMNIFY THE
ADMINISTRATIVE AGENT OR ANY LENDER FOR ANY PENALITIES OR INTEREST THAT ARE
IMPOSED EITHER SOLELY AS A RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF THE ADMINISTRATIVE AGENT OR ANY LENDER OR A FAILURE BY THE ADMINISTRATIVE
AGENT OR ANY LENDER TO PROVIDE THE BORROWERS WITH TIMELY NOTICE OF THE IMPOSTION
OF ANY INDEMNIFIED TAXES OR OTHER TAXES.  A CERTIFICATE AS TO THE AMOUNT OF SUCH
PAYMENT OR LIABILITY DELIVERED TO THE BORROWERS BY A LENDER (WITH A COPY TO THE
ADMINISTRATIVE AGENT), OR BY THE ADMINISTRATIVE AGENT ON ITS OWN BEHALF OR ON
BEHALF OF A LENDER, SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR.

 

(D)           EVIDENCE OF PAYMENTS.  AS SOON AS PRACTICABLE AFTER ANY PAYMENT OF
INDEMNIFIED TAXES OR OTHER TAXES BY THE BORROWERS TO A GOVERNMENTAL AUTHORITY,
THE BORROWERS 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.  AS SOON AS
PRACTICABLE AFTER ANY PAYMENT OF INDEMNIFIED TAXES OR OTHER TAXES BY THE
ADMINISTRATIVE AGENT OR ANY LENDER TO A GOVERNMENTAL AUTHORITY, THE
ADMINISTRATIVE AGENT OR LENDER SHALL, UPON REQUEST FROM A BORROWER, FOLLOWING
RECEIPT OF ANY SUCH ITEM, DELIVER TO THE BORROWERS THE ORIGINAL OR A CERTIFIED
COPY OF A RECEIPT ISSUED BY SUCH GOVERNMENTAL AUTHORITY EVIDENCING SUCH PAYMENT
OR OTHER REASONABLE EVIDENCE OF SUCH PAYMENT; PROVIDED, THAT IN NO EVENT SHALL
THE ADMINISTRATIVE AGENT OR ANY LENDER BE REQUIRED TO DELIVER TO THE BORROWERS
ITS TAX RETURNS OR ANY OTHER INFORMATION REGARDING ITS TAX AFFAIRS OR
COMPUTATIONS OR ANY INFORMATION THAT IS CONFIDENTIAL, PROPRIETARY, OR
CONSTITUTES INTERNAL WORK PRODUCT.

 

(E)           STATUS OF LENDERS.  ANY FOREIGN LENDER THAT IS ENTITLED TO AN
EXEMPTION FROM OR REDUCTION OF WITHHOLDING TAX UNDER THE LAW OF THE JURISDICTION
IN WHICH ANY BORROWER IS RESIDENT FOR TAX PURPOSES, OR ANY TREATY TO WHICH SUCH
JURISDICTION IS A PARTY, WITH RESPECT TO PAYMENTS HEREUNDER OR UNDER ANY OTHER
LOAN DOCUMENT SHALL DELIVER TO THE BORROWERS (WITH A COPY TO THE ADMINISTRATIVE
AGENT), AT THE TIME OR TIMES PRESCRIBED BY APPLICABLE LAW OR REASONABLY
REQUESTED BY THE BORROWERS OR THE ADMINISTRATIVE AGENT, SUCH PROPERLY COMPLETED
AND EXECUTED DOCUMENTATION PRESCRIBED BY APPLICABLE LAW AS WILL PERMIT SUCH
PAYMENTS TO BE MADE WITHOUT WITHHOLDING OR AT A REDUCED RATE OF WITHHOLDING
(INCLUDING ANY DOCUMENTATION NECESSARY TO PREVENT WITHHOLDING UNDER SECTION 1471
OR SECTION 1472 OF THE CODE).  IN ADDITION, ANY LENDER, IF REQUESTED BY THE
BORROWERS OR THE ADMINISTRATIVE AGENT, SHALL DELIVER SUCH OTHER DOCUMENTATION
PRESCRIBED BY APPLICABLE LAW OR REASONABLY REQUESTED BY THE BORROWERS OR THE
ADMINISTRATIVE AGENT AS WILL ENABLE THE BORROWERS OR THE ADMINISTRATIVE AGENT TO
DETERMINE WHETHER OR NOT SUCH LENDER IS SUBJECT TO BACKUP WITHHOLDING OR
INFORMATION REPORTING REQUIREMENTS.  IN ADDITION, EACH FOREIGN LENDER SHALL,
UPON REQUEST FROM A BORROWER, DELIVER NEW FORMS PROMPTLY UPON THE OBSOLESCENCE
OR INVALIDITY OF ANY FORM PREVIOUSLY DELIVERED BY SUCH FOREIGN LENDER.  EACH
FOREIGN LENDER SHALL NOTIFY THE BORROWER AT ANY TIME IT DETERMINES THAT IT IS NO
LONGER IN A POSITION TO PROVIDE ANY PREVIOUSLY DELIVERED CERTIFICATE TO THE
BORROWER

 

Any Foreign Lender shall deliver to the Borrowers and the Administrative Agent
(in such number of copies as shall be requested by the recipient) on or prior to
the date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the request of the Borrowers or the
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:

 

(I)            DULY COMPLETED COPIES OF INTERNAL REVENUE SERVICE FORM W-8BEN
CLAIMING ELIGIBILITY FOR BENEFITS OF AN INCOME TAX TREATY TO WHICH THE UNITED
STATES IS A PARTY,

 

(II)           DULY COMPLETED COPIES OF INTERNAL REVENUE SERVICE FORM W-8ECI,

 

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(III)          IN THE CASE OF A FOREIGN LENDER CLAIMING THE BENEFITS OF THE
EXEMPTION FOR PORTFOLIO INTEREST UNDER SECTION 881(C) OF THE CODE, (X) A
CERTIFICATE TO THE EFFECT THAT SUCH FOREIGN LENDER IS NOT (A) A “BANK” WITHIN
THE MEANING OF SECTION 881(C)(3)(A) OF THE CODE, (B) A “10 PERCENT SHAREHOLDER”
OF ANY BORROWER WITHIN THE MEANING OF SECTION 881(C)(3)(B) OF THE CODE, OR (C) A
“CONTROLLED FOREIGN CORPORATION” DESCRIBED IN SECTION 881(C)(3)(C) OF THE CODE
AND (Y) DULY COMPLETED COPIES OF  INTERNAL REVENUE SERVICE FORM W-8BEN, OR

 

(IV)          ANY OTHER FORM PRESCRIBED BY APPLICABLE LAW AS A BASIS FOR
CLAIMING EXEMPTION FROM OR A REDUCTION IN UNITED STATES FEDERAL WITHHOLDING TAX
DULY COMPLETED TOGETHER WITH SUCH SUPPLEMENTARY DOCUMENTATION AS MAY BE
PRESCRIBED BY APPLICABLE LAW TO PERMIT THE BORROWERS TO DETERMINE THE
WITHHOLDING OR DEDUCTION REQUIRED TO BE MADE.

 

(F)            TREATMENT OF CERTAIN REFUNDS.  IF THE ADMINISTRATIVE AGENT OR ANY
LENDER DETERMINES, IN ITS SOLE DISCRETION, WHICH SHALL BE EXERCISED IN A
COMMERCIALLY REASONABLE MANNER, THAT IT HAS RECEIVED A REFUND OF ANY TAXES OR
OTHER TAXES AS TO WHICH IT HAS BEEN INDEMNIFIED BY THE BORROWERS OR WITH RESPECT
TO WHICH ANY BORROWER HAS PAID ADDITIONAL AMOUNTS PURSUANT TO THIS SECTION, IT
SHALL PAY TO SUCH BORROWER AN AMOUNT EQUAL TO SUCH REFUND (BUT ONLY TO THE
EXTENT OF INDEMNITY PAYMENTS MADE, OR ADDITIONAL AMOUNTS PAID, BY THE BORROWERS
UNDER THIS SECTION 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, AS THE CASE MAY BE, AND WITHOUT INTEREST (OTHER THAN ANY INTEREST PAID
BY THE RELEVANT GOVERNMENTAL AUTHORITY WITH RESPECT TO SUCH REFUND), PROVIDED
THAT EACH BORROWER, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT OR SUCH LENDER,
AGREES TO REPAY THE AMOUNT PAID OVER TO SUCH 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 SUBSECTION 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 THAT IT DEEMS CONFIDENTIAL) TO THE BORROWERS OR ANY OTHER PERSON.

 

3.02        ILLEGALITY.  IF ANY LENDER DETERMINES THAT ANY LAW HAS MADE IT
UNLAWFUL, OR THAT ANY GOVERNMENTAL AUTHORITY HAS ASSERTED THAT IT IS UNLAWFUL,
FOR ANY LENDER OR ITS APPLICABLE LENDING OFFICE TO MAKE, MAINTAIN OR FUND FIXED
PERIOD EURODOLLAR LOANS OR DAILY FLOATING EURODOLLAR LOANS, OR TO DETERMINE OR
CHARGE INTEREST RATES BASED UPON THE FIXED PERIOD EURODOLLAR RATE OR THE DAILY
FLOATING EURODOLLAR RATE, OR ANY GOVERNMENTAL AUTHORITY HAS IMPOSED MATERIAL
RESTRICTIONS ON THE AUTHORITY OF SUCH LENDER TO PURCHASE OR SELL, OR TO TAKE
DEPOSITS OF, DOLLARS IN THE LONDON INTERBANK MARKET, THEN, ON NOTICE THEREOF BY
SUCH LENDER TO THE BORROWERS THROUGH THE ADMINISTRATIVE AGENT, ANY OBLIGATION OF
SUCH LENDER TO MAKE OR CONTINUE FIXED PERIOD EURODOLLAR LOANS OR DAILY FLOATING
EURODOLLAR LOANS OR TO CONVERT BASE RATE LOANS TO FIXED PERIOD EURODOLLAR LOANS
OR DAILY FLOATING EURODOLLAR LOANS SHALL BE SUSPENDED UNTIL SUCH LENDER NOTIFIES
THE ADMINISTRATIVE AGENT AND THE BORROWERS THAT THE CIRCUMSTANCES GIVING RISE TO
SUCH DETERMINATION NO LONGER EXIST.  UPON RECEIPT OF SUCH NOTICE, THE BORROWERS
SHALL, UPON DEMAND FROM SUCH LENDER (WITH A COPY TO THE ADMINISTRATIVE AGENT),
PREPAY OR, IF APPLICABLE, CONVERT ALL FIXED PERIOD EURODOLLAR LOANS OR DAILY
FLOATING EURODOLLAR LOANS OF SUCH LENDER TO BASE RATE LOANS, EITHER ON THE LAST
DAY OF THE INTEREST PERIOD THEREFOR, IF SUCH LENDER MAY LAWFULLY CONTINUE TO
MAINTAIN SUCH LOANS TO SUCH DAY, OR IMMEDIATELY, IF SUCH LENDER MAY NOT LAWFULLY
CONTINUE TO MAINTAIN SUCH LOANS.  UPON ANY SUCH PREPAYMENT OR CONVERSION, THE
BORROWERS SHALL ALSO PAY ACCRUED INTEREST ON THE AMOUNT SO PREPAID OR CONVERTED.

 

3.03        INABILITY TO DETERMINE RATES.  IF THE ADMINISTRATIVE AGENT OR THE
REQUIRED LENDERS DETERMINE THAT FOR ANY REASON IN CONNECTION WITH ANY REQUEST
FOR A FIXED PERIOD EURODOLLAR LOAN OR A DAILY FLOATING EURODOLLAR LOAN, AS
APPLICABLE, OR A CONVERSION TO OR CONTINUATION THEREOF THAT (A)  DEPOSITS IN THE
RELEVANT APPROVED CURRENCY ARE NOT BEING OFFERED TO BANKS IN THE LONDON
INTERBANK EURODOLLAR MARKET FOR THE APPLICABLE AMOUNT AND INTEREST PERIOD OF
SUCH FIXED PERIOD EURODOLLAR LOAN OR DAILY

 

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FLOATING EURODOLLAR LOAN, (B) ADEQUATE AND REASONABLE MEANS DO NOT EXIST FOR
DETERMINING THE FIXED PERIOD EURODOLLAR RATE OR DAILY FLOATING EURODOLLAR RATE,
AS APPLICABLE, FOR ANY REQUESTED INTEREST PERIOD WITH RESPECT TO A PROPOSED
FIXED PERIOD EURODOLLAR LOAN OR DAILY FLOATING EURODOLLAR LOAN, AS APPLICABLE,
OR (C) THE FIXED PERIOD EURODOLLAR RATE OR DAILY FLOATING EURODOLLAR RATE FOR
ANY REQUESTED INTEREST PERIOD WITH RESPECT TO A PROPOSED FIXED PERIOD EURODOLLAR
LOAN OR DAILY FLOATING EURODOLLAR LOAN DOES NOT ADEQUATELY AND FAIRLY REFLECT
THE COST OF FUNDING SUCH LOAN, THE ADMINISTRATIVE AGENT WILL PROMPTLY SO NOTIFY
THE BORROWERS AND EACH LENDER.  THEREAFTER, THE OBLIGATION OF THE LENDERS TO
MAKE OR MAINTAIN FIXED PERIOD EURODOLLAR LOANS OR DAILY FLOATING EURODOLLAR
LOANS IN THE AFFECTED CURRENCY OR CURRENCIES SHALL BE SUSPENDED UNTIL THE
ADMINISTRATIVE AGENT (UPON THE INSTRUCTION OF THE REQUIRED LENDERS) REVOKES SUCH
NOTICE.  UPON RECEIPT OF SUCH NOTICE, THE BORROWERS MAY REVOKE ANY PENDING
REQUEST FOR BORROWING OF, CONVERSION TO OR CONTINUATION OF FIXED PERIOD
EURODOLLAR LOANS OR DAILY FLOATING EURODOLLAR LOANS, AS APPLICABLE, OR, FAILING
THAT, WILL BE DEEMED TO HAVE CONVERTED SUCH REQUEST INTO A REQUEST FOR A BASE
RATE LOAN IN THE AMOUNT SPECIFIED THEREIN.

 

3.04        INCREASED COSTS; RESERVES ON EURODOLLAR LOANS.

 

(A)           INCREASED COSTS GENERALLY.  IF ANY CHANGE IN LAW SHALL:

 

(I)            IMPOSE, MODIFY OR DEEM APPLICABLE ANY RESERVE, SPECIAL DEPOSIT,
COMPULSORY LOAN, INSURANCE CHARGE OR SIMILAR REQUIREMENT AGAINST ASSETS OF,
DEPOSITS WITH OR FOR THE ACCOUNT OF, OR CREDIT EXTENDED OR PARTICIPATED IN BY,
ANY LENDER (EXCEPT ANY RESERVE REQUIREMENT REFLECTED CONTEMPLATED BY
SECTION 3.04(E));

 

(II)           IMPOSE ON ANY LENDER OR THE LONDON INTERBANK MARKET ANY OTHER
CONDITION, COST OR EXPENSE AFFECTING THIS AGREEMENT OR EURODOLLAR LOANS MADE BY
SUCH LENDER;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan), or to reduce the amount of any sum received
or receivable by such Lender (whether of principal, interest or any other
amount) then, upon request of such Lender, the Borrowers will pay to such
Lender, as the case may be, such additional amount or amounts as will compensate
such Lender, as the case may be, for such additional costs incurred or reduction
suffered.

 

(B)           CAPITAL REQUIREMENTS.  IF ANY LENDER DETERMINES THAT ANY CHANGE IN
LAW AFFECTING SUCH LENDER OR ANY LENDING OFFICE OF SUCH LENDER OR SUCH LENDER’S
HOLDING COMPANY, IF ANY, REGARDING CAPITAL REQUIREMENTS HAS OR WOULD HAVE THE
EFFECT OF REDUCING THE RATE OF RETURN ON SUCH LENDER’S CAPITAL OR ON THE CAPITAL
OF SUCH LENDER’S HOLDING COMPANY, IF ANY, AS A CONSEQUENCE OF THIS AGREEMENT,
THE COMMITMENTS OF SUCH LENDER OR THE LOANS MADE BY, SUCH LENDER, TO A LEVEL
BELOW THAT WHICH SUCH LENDER OR SUCH LENDER’S HOLDING COMPANY COULD HAVE
ACHIEVED BUT FOR SUCH CHANGE IN LAW (TAKING INTO CONSIDERATION SUCH LENDER’S
POLICIES AND THE POLICIES OF SUCH LENDER’S HOLDING COMPANY WITH RESPECT TO
CAPITAL ADEQUACY), THEN FROM TIME TO TIME THE BORROWERS WILL PAY TO SUCH LENDER,
AS THE CASE MAY BE, SUCH ADDITIONAL AMOUNT OR AMOUNTS AS WILL COMPENSATE SUCH
LENDER OR SUCH LENDER’S HOLDING COMPANY FOR ANY SUCH REDUCTION SUFFERED.

 

(C)           CERTIFICATES FOR REIMBURSEMENT.  A CERTIFICATE OF A LENDER SETTING
FORTH THE AMOUNT OR AMOUNTS NECESSARY TO COMPENSATE SUCH LENDER OR ITS HOLDING
COMPANY, AS THE CASE MAY BE, AS SPECIFIED IN SUBSECTION (A) OR (B) OF THIS
SECTION AND DELIVERED TO THE BORROWERS SHALL BE CONCLUSIVE ABSENT MANIFEST
ERROR.  THE BORROWERS SHALL PAY SUCH LENDER, AS THE CASE MAY BE, THE AMOUNT
SHOWN AS DUE ON ANY SUCH CERTIFICATE WITHIN 10 DAYS AFTER RECEIPT THEREOF.

 

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(D)           DELAY IN REQUESTS.  FAILURE OR DELAY ON THE PART OF ANY LENDER TO
DEMAND COMPENSATION PURSUANT TO THE FOREGOING PROVISIONS OF THIS SECTION SHALL
NOT CONSTITUTE A WAIVER OF SUCH LENDER’S RIGHT TO DEMAND SUCH COMPENSATION,
PROVIDED THAT THE BORROWERS SHALL NOT BE REQUIRED TO COMPENSATE A LENDER
PURSUANT TO THE FOREGOING PROVISIONS OF THIS SECTION FOR ANY INCREASED COSTS
INCURRED OR REDUCTIONS SUFFERED MORE THAN 180 DAYS PRIOR TO THE DATE THAT SUCH
LENDER, AS THE CASE MAY BE, NOTIFIES THE BORROWERS OF THE CHANGE IN LAW GIVING
RISE TO SUCH INCREASED COSTS OR REDUCTIONS AND OF SUCH LENDER’S INTENTION TO
CLAIM COMPENSATION THEREFOR (EXCEPT THAT, IF THE CHANGE IN LAW GIVING RISE TO
SUCH INCREASED COSTS OR REDUCTIONS IS RETROACTIVE, THEN THE 180 DAYS PERIOD
REFERRED TO ABOVE SHALL BE EXTENDED TO INCLUDE THE PERIOD OF RETROACTIVE EFFECT
THEREOF).

 

(E)           RESERVES ON EURODOLLAR LOANS.  THE BORROWERS SHALL PAY TO EACH
LENDER, AS LONG AS SUCH LENDER SHALL BE REQUIRED TO MAINTAIN RESERVES WITH
RESPECT TO LIABILITIES OR ASSETS CONSISTING OF OR INCLUDING EUROCURRENCY FUNDS
OR DEPOSITS (CURRENTLY KNOWN AS “EUROCURRENCY LIABILITIES”), ADDITIONAL INTEREST
ON THE UNPAID PRINCIPAL AMOUNT OF EACH EURODOLLAR LOAN EQUAL TO THE ACTUAL COSTS
OF SUCH RESERVES ALLOCATED TO SUCH LOAN BY SUCH LENDER (AS DETERMINED BY SUCH
LENDER IN GOOD FAITH, WHICH DETERMINATION SHALL BE CONCLUSIVE), WHICH SHALL BE
DUE AND PAYABLE ON EACH DATE ON WHICH INTEREST IS PAYABLE ON SUCH LOAN, PROVIDED
THE BORROWERS SHALL HAVE RECEIVED AT LEAST 10 DAYS’ PRIOR NOTICE (WITH A COPY TO
THE ADMINISTRATIVE AGENT) OF SUCH ADDITIONAL INTEREST FROM SUCH LENDER.  IF A
LENDER FAILS TO GIVE NOTICE 10 DAYS PRIOR TO THE RELEVANT INTEREST PAYMENT DATE,
SUCH ADDITIONAL INTEREST SHALL BE DUE AND PAYABLE 10 DAYS FROM RECEIPT OF SUCH
NOTICE.

 

3.05        COMPENSATION FOR LOSSES.  UPON DEMAND OF ANY LENDER (WITH A COPY TO
THE ADMINISTRATIVE AGENT) FROM TIME TO TIME, THE BORROWERS SHALL PROMPTLY
COMPENSATE SUCH LENDER FOR AND HOLD SUCH LENDER HARMLESS FROM ANY LOSS, COST OR
EXPENSE INCURRED BY IT AS A RESULT OF:

 

(A)           ANY CONTINUATION, CONVERSION, PAYMENT OR PREPAYMENT OF ANY LOAN
OTHER THAN A BASE RATE LOAN OR A DAILY FLOATING EURODOLLAR LOAN ON A DAY OTHER
THAN THE LAST DAY OF THE INTEREST PERIOD FOR SUCH LOAN (WHETHER VOLUNTARY,
MANDATORY, AUTOMATIC, BY REASON OF ACCELERATION, OR OTHERWISE);

 

(B)           ANY FAILURE BY THE BORROWERS (FOR A REASON OTHER THAN THE FAILURE
OF SUCH LENDER TO MAKE A LOAN) TO PREPAY, BORROW, CONTINUE OR CONVERT ANY LOAN
OTHER THAN A BASE RATE LOAN OR A DAILY FLOATING EURODOLLAR LOAN ON THE DATE OR
IN THE AMOUNT NOTIFIED BY THE BORROWERS; OR

 

(C)           ANY ASSIGNMENT OF A FIXED PERIOD EURODOLLAR LOAN ON A DAY OTHER
THAN THE LAST DAY OF THE INTEREST PERIOD THEREFOR AS A RESULT OF A REQUEST BY
THE BORROWERS PURSUANT TO SECTION 10.13;

 

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were
obtained.  The Borrowers shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.  Notwithstanding the
foregoing, if, during the 120 day period following the Closing Date, the
Administrative Agent incurs any breakage costs on account of the syndication of
the credit facility established hereunder, the Borrowers shall immediately
reimburse the Administrative Agent for any such breakage costs.

 

For purposes of calculating amounts payable by the Borrowers to the Lenders
under this Section 3.05, each Lender shall be deemed to have funded each Fixed
Period Eurodollar Loan made by it at the Fixed Period Eurodollar Rate used in
determining the Fixed Period Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Fixed Period Eurodollar
Loan was in fact so funded.

 

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3.06        MITIGATION OBLIGATIONS.  IF ANY LENDER REQUESTS COMPENSATION UNDER
SECTION 3.04, OR ANY BORROWER IS REQUIRED TO PAY ANY ADDITIONAL AMOUNT TO ANY
LENDER OR ANY GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF ANY LENDER PURSUANT TO
SECTION 3.01, OR IF ANY LENDER GIVES A NOTICE PURSUANT TO SECTION 3.02, 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 3.01 OR 3.04, AS THE CASE MAY BE,
IN THE FUTURE, OR ELIMINATE THE NEED FOR THE NOTICE PURSUANT TO SECTION 3.02, AS
APPLICABLE, AND (II) IN EACH CASE, WOULD NOT SUBJECT SUCH LENDER TO ANY
UNREIMBURSED COST OR EXPENSE AND WOULD NOT OTHERWISE BE DISADVANTAGEOUS TO SUCH
LENDER.  EACH BORROWER HEREBY AGREES TO PAY ALL REASONABLE COSTS AND EXPENSES
INCURRED BY ANY LENDER IN CONNECTION WITH ANY SUCH DESIGNATION OR ASSIGNMENT.

 

3.07        Survival.  All of the Borrowers’ obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

ARTICLE IV.
CONDITIONS PRECEDENT TO BORROWINGS

 

4.01        CONDITIONS TO EFFECTIVENESS.  THE PARTIES HERETO ACKNOWLEDGE AND
AGREE THAT THIS AGREEMENT SHALL BECOME EFFECTIVE UPON RECEIPT BY EACH PARTY
HERETO OF THIS AGREEMENT, EXECUTED AND DELIVERED BY A RESPONSIBLE OFFICER OF
EACH BORROWER AND EACH LENDER; PROVIDED, HOWEVER, THAT THE OBLIGATION OF ANY
LENDER TO MAKE ANY LOANS, OR OF THE ISSUING BANK TO ISSUE ANY LETTERS OF CREDIT,
HEREUNDER IS SUBJECT TO THE SATISFACTION OF THE CONDITIONS SET FORTH IN SECTIONS
4.02 AND 4.03 HEREUNDER.

 

4.02        CONDITIONS OF INITIAL BORROWING.  THE OBLIGATION OF EACH LENDER TO
MAKE ITS INITIAL REVOLVING LOANS HEREUNDER, AND OF THE ISSUING BANK TO INITIALLY
ISSUE ANY LETTERS OF CREDIT, IS SUBJECT TO SATISFACTION OF THE FOLLOWING
CONDITIONS PRECEDENT:

 

(A)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED:

 

(I)            THIS AGREEMENT AS PROVIDED IN SECTION 4.01;

 

(II)           A BORROWING BASE REPORT, CERTIFIED AS COMPLETE AND CORRECT IN ALL
MATERIAL RESPECTS, WHICH CALCULATES THE BORROWING BASE AS OF THE LAST BUSINESS
DAY OF THE MOST RECENT MONTH ENDED AT LEAST 20 BUSINESS DAYS PRIOR TO THE
CLOSING DATE;

 

(III)          THE OTHER LOAN DOCUMENTS (OTHER THAN NOTES), EXECUTED AND
DELIVERED BY A DULY AUTHORIZED OFFICER OR SIGNATORY OF EACH GRANTOR PARTY
THERETO; AND

 

(IV)          A NOTE EXECUTED BY THE BORROWERS IN FAVOR OF EACH LENDER THAT HAS
REQUESTED A NOTE AT LEAST TWO BUSINESS DAYS PRIOR TO THE DATE ON WHICH THE
INITIAL REVOLVING LOANS ARE TO BE MADE.

 

(B)           COLLATERAL.  ALL DOCUMENTS AND INSTRUMENTS, INCLUDING UNIFORM
COMMERCIAL CODE OR OTHER APPLICABLE PERSONAL PROPERTY AND FINANCING STATEMENTS,
REASONABLY REQUESTED BY THE ADMINISTRATIVE AGENT TO BE FILED, REGISTERED OR
RECORDED TO CREATE THE LIENS ON THE COLLATERAL INTENDED TO BE CREATED BY THE
SECURITY AGREEMENT AND PERFECT SUCH LIENS TO THE EXTENT REQUIRED BY, AND WITH
THE PRIORITY REQUIRED BY, THE SECURITY AGREEMENT SHALL HAVE BEEN DELIVERED TO
THE ADMINISTRATIVE AGENT FOR FILING, REGISTRATION OR RECORDING AND NONE OF THE
COLLATERAL SHALL BE SUBJECT TO ANY OTHER PLEDGES, SECURITY INTERESTS OR
MORTGAGES, EXCEPT FOR LIENS PERMITTED HEREUNDER.

 

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(C)           LEGAL OPINIONS.  THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE
EXECUTED LEGAL OPINIONS OF (A) SIMPSON THACHER & BARTLETT LLP, SPECIAL NEW YORK
COUNSEL TO THE BORROWERS, SUBSTANTIALLY IN THE FORM OF EXHIBIT G-1, (B) THE
IN-HOUSE GENERAL COUNSEL FOR THE BORROWERS, SUBSTANTIALLY IN THE FORM OF
EXHIBIT G-2, AND (C) MAPLES AND CALDER, COUNSEL FOR THE BORROWERS THAT ARE
CAYMAN ISLANDS COMPANIES, WITH RESPECT TO MATTERS OF CAYMAN ISLANDS LAW
SUBSTANTIALLY IN THE FORM OF EXHIBIT G-3.  THE BORROWERS HEREBY REQUEST SUCH
COUNSEL TO DELIVER SUCH OPINIONS.

 

(D)           CLOSING CERTIFICATES.  THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED A CERTIFICATE OF EACH BORROWER, DATED AS OF THE CLOSING DATE, WITH
APPROPRIATE INSERTIONS, EXECUTED BY THE PRESIDENT OR ANY VICE PRESIDENT AND THE
SECRETARY OR ANY ASSISTANT SECRETARY OR ANY OTHER RESPONSIBLE OFFICER OR DULY
AUTHORIZED SIGNATORY OF SUCH BORROWER, AND ATTACHING THE DOCUMENTS REFERRED TO
IN CLAUSE (E) BELOW AND SUCH OTHER CLOSING CERTIFICATES AS IT MAY REASONABLY
REQUEST.

 

(E)           AUTHORIZATION OF PROCEEDINGS OF EACH BORROWER; INCUMBENCY; DUE
ORGANIZATION; GOOD STANDING.

 

(I)            THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A COPY OF THE
RESOLUTIONS, IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT, OF
THE BOARD OF DIRECTORS OR OTHER MANAGERS OF EACH BORROWER (OR A DULY AUTHORIZED
COMMITTEE THEREOF) AUTHORIZING (X) THE EXECUTION, DELIVERY AND PERFORMANCE OF
THE LOAN DOCUMENTS (AND ANY AGREEMENTS RELATING THERETO) TO WHICH IT IS A PARTY
AND (Y) IN THE CASE OF EACH BORROWER, THE EXTENSIONS OF CREDIT CONTEMPLATED
HEREUNDER.

 

(II)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SUCH CERTIFICATES OF
RESOLUTIONS OR OTHER ACTION, INCUMBENCY CERTIFICATES AND/OR OTHER CERTIFICATES
OF RESPONSIBLE OFFICERS OF EACH BORROWER AS THE ADMINISTRATIVE AGENT MAY REQUIRE
EVIDENCING THE IDENTITY, AUTHORITY AND CAPACITY OF EACH RESPONSIBLE OFFICER
THEREOF AUTHORIZED TO ACT AS A RESPONSIBLE OFFICER IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH SUCH BORROWER IS A PARTY;

 

(III)          THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SUCH DOCUMENTS AND
CERTIFICATIONS AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUIRE TO EVIDENCE
THAT EACH BORROWER IS DULY ORGANIZED OR FORMED AND THAT EACH OF THE BORROWERS IS
VALIDLY EXISTING, IN GOOD STANDING AND QUALIFIED TO ENGAGE IN BUSINESS IN EACH
JURISDICTION WHERE SUCH BORROWERS’ OWNERSHIP, LEASE OR OPERATION OF PROPERTIES
OR THE CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION, EXCEPT TO THE EXTENT
THAT FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT;

 

(F)            FEES. THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE FEES IN
THE AMOUNTS PREVIOUSLY AGREED IN WRITING TO BE RECEIVED ON THE CLOSING DATE AND
ALL EXPENSES (INCLUDING THE REASONABLE FEES, DISBURSEMENTS AND OTHER CHARGES OF
COUNSEL) PAYABLE BY THE BORROWERS FOR WHICH INVOICES HAVE BEEN PRESENTED PRIOR
TO THE CLOSING DATE SHALL HAVE BEEN PAID.

 

(G)           EXISTING CREDIT AGREEMENT. THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED CUSTOMARY EVIDENCE INDICATING THAT THE EXISTING CREDIT AGREEMENT HAS
BEEN, OR CONCURRENTLY WITH THE CLOSING DATE IS BEING, TERMINATED AND ALL AMOUNTS
OUTSTANDING THEREUNDER ARE BEING REPAID IN FULL AND ALL LIENS SECURING
OBLIGATIONS THEREUNDER HAVE BEEN, OR CONCURRENTLY WITH THE CLOSING DATE ARE
BEING, RELEASED.

 

(H)           REPRESENTATIONS; NO DEFAULT. THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED A CUSTOMARY CERTIFICATE SIGNED BY A RESPONSIBLE OFFICER OF EACH
BORROWER, IN A FORM SATISFACTORY TO THE ADMINISTRATIVE AGENT, CERTIFYING THAT
THE CONDITIONS SPECIFIED IN SECTIONS 4.03(A) AND 4.03(B) HAVE BEEN SATISFIED.

 

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4.03        CONDITIONS TO ALL BORROWINGS.  THE OBLIGATION OF EACH LENDER TO
HONOR ANY REQUEST FOR BORROWING (OTHER THAN A REVOLVING LOAN NOTICE REQUESTING
ONLY A CONVERSION OF REVOLVING LOANS TO ANOTHER INTEREST RATE TYPE, OR A
CONTINUATION OF FIXED PERIOD EURODOLLAR LOANS) IS SUBJECT TO THE FOLLOWING
CONDITIONS PRECEDENT:

 

(A)           THE REPRESENTATIONS AND WARRANTIES OF THE BORROWERS CONTAINED IN
ARTICLE V AND ANY OTHER LOAN DOCUMENT SHALL, AFTER TAKING INTO ACCOUNT ANY
MATERIALITY OR OTHER QUALIFICATION CONTAINED THEREIN, BE TRUE AND CORRECT ON AND
AS OF THE DATE OF SUCH BORROWING, EXCEPT TO THE EXTENT THAT SUCH REPRESENTATIONS
AND WARRANTIES SPECIFICALLY REFER TO AN EARLIER DATE, IN WHICH CASE THEY SHALL
BE TRUE AND CORRECT AS OF SUCH EARLIER DATE.

 

(B)           NO DEFAULT SHALL EXIST, OR WOULD RESULT FROM SUCH PROPOSED
BORROWING OR FROM THE APPLICATION OF THE PROCEEDS THEREOF.

 

(C)           EITHER (I) THE TOTAL REVOLVING CREDIT EXPOSURE (AFTER GIVING
EFFECT TO SUCH EXTENSION OF CREDIT) SHALL NOT EXCEED THE BORROWING BASE
REFLECTED ON THE BORROWING BASE REPORT MOST RECENTLY DELIVERED TO THE
ADMINISTRATIVE AGENT OR (II) THE BORROWERS SHALL HAVE DELIVERED AN UPDATED
BORROWING BASE REPORT DEMONSTRATING THAT THE TOTAL REVOLVING CREDIT EXPOSURE
(AFTER GIVING EFFECT TO SUCH EXTENSION OF CREDIT) SHALL NOT EXCEED THE BORROWING
BASE AFTER GIVING EFFECT TO SUCH EXTENSION OF CREDIT AS WELL AS ANY CONCURRENT
ACQUISITIONS OF SPECIFIED FINANCIAL ASSETS OR PAYMENT OF OUTSTANDING LOANS.

 

(D)           IN THE EVENT THAT AN ASSET TO BE PURCHASED WITH THE PROCEEDS OF A
BORROWING MADE ON THE DATE OF THE BORROWING IS TO BE INCLUDED IN THE BORROWING
BASE AS OF THE DATE OF THE BORROWING, THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED EVIDENCE REASONABLY SATISFACTORY TO IT THAT THE CONDITIONS REFERRED
TO IN CLAUSES (I) AND (II) IN THE PROVISO TO SECTION 2.01, AS APPLICABLE, HAVE
BEEN SATISFIED.

 

(E)           THE ADMINISTRATIVE AGENT AND, IF APPLICABLE, THE SWINGLINE LENDER
SHALL HAVE RECEIVED A REQUEST FOR BORROWING IN ACCORDANCE WITH THE REQUIREMENTS
HEREOF.

 

Each Request for Borrowing (other than a Revolving Loan Notice requesting only a
conversion of Revolving Loans to another Interest Rate Type or a continuation of
Fixed Period Eurodollar Loans) submitted by the Borrowers shall be deemed to be
a representation and warranty that the conditions specified in Sections 
4.03(a) and 4.03(b) have been satisfied on and as of the date of the applicable
Borrowing.

 

ARTICLE V.
REPRESENTATIONS AND WARRANTIES

 

The Borrowers represent and warrant to the Administrative Agent and the Lenders
that:

 

5.01        EXISTENCE, QUALIFICATION AND POWER.  EACH BORROWER (A) IS DULY
ORGANIZED OR FORMED, VALIDLY EXISTING AND, AS APPLICABLE, IN GOOD STANDING UNDER
THE LAWS OF THE JURISDICTION OF ITS INCORPORATION OR ORGANIZATION, (B) HAS ALL
REQUISITE POWER AND AUTHORITY AND ALL REQUISITE AND RELEVANT GOVERNMENTAL
LICENSES, AUTHORIZATIONS, CONSENTS AND APPROVALS TO (I) OWN OR LEASE ITS ASSETS
AND CARRY ON ITS BUSINESS AND (II) EXECUTE, DELIVER AND PERFORM ITS OBLIGATIONS
UNDER THE LOAN DOCUMENTS TO WHICH IT IS A PARTY, AND (C) IS DULY QUALIFIED AND
IS LICENSED WHERE APPLICABLE AND, AS APPLICABLE, IN GOOD STANDING UNDER THE LAWS
OF EACH JURISDICTION WHERE ITS OWNERSHIP, LEASE OR OPERATION OF PROPERTIES OR
THE CONDUCT OF ITS BUSINESS REQUIRES SUCH QUALIFICATION OR LICENSE; EXCEPT IN
EACH CASE REFERRED TO IN CLAUSE (B)(I) OR (C), TO THE EXTENT THAT FAILURE TO DO
SO COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

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5.02        AUTHORIZATION; NO CONTRAVENTION.  THE EXECUTION, DELIVERY AND
PERFORMANCE BY EACH BORROWER OF EACH LOAN DOCUMENT TO WHICH SUCH PERSON IS
PARTY, HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE OR OTHER
ORGANIZATIONAL ACTION, AND DO NOT AND WILL NOT (A) CONTRAVENE THE TERMS OF ANY
OF SUCH PERSON’S ORGANIZATION DOCUMENTS; (B) CONFLICT WITH OR RESULT IN ANY
BREACH OR CONTRAVENTION OF, OR REQUIRE ANY PAYMENT TO BE MADE UNDER (I) ANY
CONTRACTUAL OBLIGATION TO WHICH SUCH PERSON IS A PARTY OR AFFECTING SUCH PERSON
OR THE PROPERTIES OF SUCH PERSON OR ANY OF ITS SUBSIDIARIES OR (II) ANY ORDER,
INJUNCTION, WRIT OR DECREE OF ANY GOVERNMENTAL AUTHORITY OR ANY ARBITRAL AWARD
TO WHICH SUCH PERSON OR ITS PROPERTY IS SUBJECT; (C) VIOLATE ANY LAW; EXCEPT, IN
EACH CASE REFERRED TO IN CLAUSE (B) OR (C) TO THE EXTENT SUCH CONFLICT, BREACH,
CONTRAVENTION, PAYMENT OR VIOLATION WOULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT OR (D) RESULT IN THE CREATION OR IMPOSITION OF ANY LIEN
ON ANY ASSET OF ANY OF THE BORROWERS OR ANY OF THEIR SUBSIDIARIES OTHER THAN THE
LIENS CREATED PURSUANT TO THE LOAN DOCUMENTS.

 

5.03        GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS.  NO APPROVAL, CONSENT,
EXEMPTION, AUTHORIZATION, OR OTHER ACTION BY, OR NOTICE TO, OR FILING WITH, ANY
GOVERNMENTAL AUTHORITY OR ANY OTHER PERSON IS NECESSARY OR REQUIRED IN
CONNECTION WITH THE EXECUTION, DELIVERY OR PERFORMANCE BY, OR ENFORCEMENT
AGAINST, ANY BORROWER OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT EXCEPT (I)
FOR THE FILING OF UCC FINANCING STATEMENTS AND (II) SUCH APPROVALS, CONSENTS,
EXEMPTIONS, AUTHORIZATIONS OR OTHER ACTIONS, NOTICES OR FILINGS AS HAVE BEEN
OBTAINED OR MADE AND ARE IN FULL FORCE AND EFFECT OR WHERE THE FAILURE TO OBTAIN
OR MAKE SUCH APPROVALS, CONSENTS, EXEMPTIONS, AUTHORIZATIONS OR OTHER ACTIONS,
NOTICES OR FILINGS WOULD NOT HAVE A MATERIAL ADVERSE EFFECT.

 

5.04        BINDING EFFECT.  THIS AGREEMENT HAS BEEN, AND EACH OTHER LOAN
DOCUMENT, WHEN DELIVERED HEREUNDER, WILL HAVE BEEN, DULY EXECUTED AND DELIVERED
BY EACH BORROWER THAT IS A PARTY THERETO.  THIS AGREEMENT CONSTITUTES, AND EACH
OTHER LOAN DOCUMENT WHEN SO DELIVERED WILL CONSTITUTE, A LEGAL, VALID AND
BINDING OBLIGATION OF SUCH BORROWER, ENFORCEABLE AGAINST EACH BORROWER THAT IS
PARTY THERETO 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.

 

5.05                        FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.

 

(A)                                  THE AUDITED FINANCIAL STATEMENTS (I) WERE
PREPARED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED THROUGHOUT THE PERIOD
COVERED THEREBY, EXCEPT AS OTHERWISE EXPRESSLY NOTED THEREIN; AND (II) FAIRLY
PRESENT THE FINANCIAL CONDITION OF KKR FINANCIAL  AND ITS CONSOLIDATED
SUBSIDIARIES AS OF THE DATE THEREOF AND THEIR RESULTS OF OPERATIONS FOR THE
PERIOD COVERED THEREBY IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED THROUGHOUT
THE PERIOD COVERED THEREBY, EXCEPT AS OTHERWISE EXPRESSLY NOTED THEREIN.

 

(B)                                 THE UNAUDITED CONSOLIDATED BALANCE SHEET OF
KKR FINANCIAL AND ITS CONSOLIDATED SUBSIDIARIES DATED SEPTEMBER 30, 2009, AND
THE RELATED CONSOLIDATED STATEMENTS OF INCOME OR OPERATIONS, SHAREHOLDERS’
EQUITY AND CASH FLOWS FOR THE FISCAL QUARTER ENDED ON THAT DATE (I) WERE
PREPARED IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED THROUGHOUT THE PERIOD
COVERED THEREBY, EXCEPT AS OTHERWISE EXPRESSLY NOTED THEREIN, AND (II) FAIRLY
PRESENT THE FINANCIAL CONDITION OF KKR FINANCIAL AND ITS SUBSIDIARIES AS OF THE
DATE THEREOF AND THEIR RESULTS OF OPERATIONS FOR THE PERIOD COVERED THEREBY,
SUBJECT, IN THE CASE OF CLAUSES (I) AND (II), TO THE ABSENCE OF FOOTNOTES AND TO
NORMAL YEAR-END AUDIT ADJUSTMENTS.

 

(C)                                  SINCE THE DATE OF THE AUDITED FINANCIAL
STATEMENTS, THERE HAS BEEN NO EVENT OR CIRCUMSTANCE, EITHER INDIVIDUALLY OR IN
THE AGGREGATE, THAT HAS HAD OR COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.

 

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5.06        LITIGATION.  EXCEPT AS SET FORTH ON SCHEDULE 5.06, THERE ARE NO
ACTIONS, SUITS, PROCEEDINGS, FORMAL INVESTIGATIONS, CLAIMS OR DISPUTES PENDING
OR, TO THE KNOWLEDGE OF THE BORROWERS AFTER DUE AND DILIGENT INVESTIGATION,
THREATENED OR CONTEMPLATED, AT LAW, IN EQUITY, IN ARBITRATION OR BEFORE ANY
GOVERNMENTAL AUTHORITY, BY OR AGAINST ANY BORROWER OR ANY OF ITS SUBSIDIARIES OR
AGAINST ANY OF THEIR PROPERTIES OR REVENUES THAT (A) PURPORT TO AFFECT OR
PERTAIN TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY, OR (B) EITHER INDIVIDUALLY OR IN THE AGGREGATE, COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

5.07        NO DEFAULT.  NEITHER ANY BORROWER NOR ANY SUBSIDIARY THEREOF IS IN
DEFAULT UNDER OR WITH RESPECT TO ANY CONTRACTUAL OBLIGATION THAT COULD, EITHER
INDIVIDUALLY OR IN THE AGGREGATE, REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT.  NO DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD RESULT FROM
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT.

 

5.08        INSURANCE.  THE PROPERTIES OF THE BORROWERS AND THEIR SUBSIDIARIES
ARE INSURED WITH FINANCIALLY SOUND AND REPUTABLE INSURANCE COMPANIES, IN SUCH
AMOUNTS, WITH SUCH DEDUCTIBLES AND COVERING SUCH RISKS AS ARE CUSTOMARILY
CARRIED BY COMPANIES ENGAGED IN SIMILAR BUSINESSES AND OWNING SIMILAR PROPERTIES
IN LOCALITIES WHERE THE BORROWERS OR THE APPLICABLE SUBSIDIARY OPERATES.

 

5.09        TAXES.  EACH BORROWER AND ITS SUBSIDIARIES HAVE FILED ALL FEDERAL,
STATE AND OTHER MATERIAL TAX RETURNS AND REPORTS REQUIRED TO BE FILED, AND HAVE
PAID ALL FEDERAL, STATE AND OTHER MATERIAL TAXES, ASSESSMENTS, FEES AND OTHER
GOVERNMENTAL CHARGES LEVIED OR IMPOSED UPON THEM OR THEIR PROPERTIES, INCOME OR
ASSETS OTHERWISE DUE AND PAYABLE, EXCEPT (I) THOSE WHICH ARE BEING CONTESTED IN
GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED AND FOR WHICH
ADEQUATE RESERVES HAVE BEEN PROVIDED IN ACCORDANCE WITH GAAP AND (II) TO THE
EXTENT THAT THE FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

5.10        ERISA COMPLIANCE.  NO ERISA EVENT HAS OCCURRED OR IS REASONABLY
EXPECTED TO OCCUR THAT, WHEN TAKEN TOGETHER WITH ALL OTHER SUCH ERISA EVENTS FOR
WHICH LIABILITY 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 $25,000,000 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 $25,000,000 THE FAIR
MARKET VALUE OF THE ASSETS OF ALL SUCH UNDERFUNDED PLANS.

 

5.11        PROPERTIES.  (I) EACH OF THE BORROWERS AND EACH OF THEIR
SUBSIDIARIES HAS GOOD TITLE TO, OR VALID LEASEHOLD, EASEMENT OR OTHER PROPERTY
INTERESTS IN, ALL ITS REAL AND PERSONAL PROPERTY NECESSARY 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 AND EXCEPT WHERE THE FAILURE TO HAVE SUCH TITLE WOULD
NOT HAVE A MATERIAL ADVERSE EFFECT.

 

(II)           EACH OF THE BORROWERS AND EACH OF THEIR SUBSIDIARIES OWNS, OR IS
LICENSED TO USE, ALL TRADEMARKS, TRADENAMES, COPYRIGHTS, PATENTS AND OTHER
INTELLECTUAL PROPERTY NECESSARY TO ITS BUSINESS, AND THE USE THEREOF BY SUCH
PERSON 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.

 

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5.12        INVESTMENT COMPANY ACT.  NONE OF THE BORROWERS, AND NONE OF THE
PERSONS CONTROLLING ANY OF THE BORROWERS, IS OR IS REQUIRED TO BE REGISTERED AS
AN “INVESTMENT COMPANY” UNDER THE INVESTMENT COMPANY ACT OF 1940.

 

5.13        DISCLOSURE.  THE BORROWERS HAVE DISCLOSED TO THE ADMINISTRATIVE
AGENT AND 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.  NO REPORT, FINANCIAL
STATEMENT, CERTIFICATE OR OTHER WRITTEN INFORMATION FURNISHED BY OR ON BEHALF OF
ANY BORROWER TO THE ADMINISTRATIVE AGENT OR ANY LENDER IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED HEREBY AND THE NEGOTIATION OF THIS AGREEMENT OR
DELIVERED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT (IN EACH CASE, 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 AS OF THE DATE FURNISHED; PROVIDED THAT, WITH RESPECT TO
PROJECTED FINANCIAL INFORMATION, THE BORROWERS REPRESENT ONLY THAT SUCH
INFORMATION WAS PREPARED IN GOOD FAITH BASED UPON ASSUMPTIONS BELIEVED TO BE
REASONABLE AT THE TIME.

 

5.14        COMPLIANCE WITH LAWS.  EACH BORROWER AND EACH SUBSIDIARY THEREOF IS
IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF ALL LAWS AND ALL
ORDERS, WRITS, INJUNCTIONS AND DECREES APPLICABLE TO IT OR TO ITS PROPERTIES,
EXCEPT IN SUCH INSTANCES IN WHICH (A) SUCH REQUIREMENT OF LAW OR ORDER, WRIT,
INJUNCTION OR DECREE IS BEING CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS
DILIGENTLY CONDUCTED OR (B) THE FAILURE TO COMPLY THEREWITH, EITHER INDIVIDUALLY
OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.

 

5.15        SOLVENCY.  EACH OF THE BORROWERS IS AND, AFTER CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, WILL BE SOLVENT.

 

5.16        BORROWING BASE REPORT.  THE MOST RECENT BORROWING BASE REPORT
DELIVERED BY THE BORROWERS ACCURATELY REFLECTS THE BORROWING BASE AND THE VALUE
OF ALL ELIGIBLE SPECIFIED FINANCIAL ASSETS INCLUDED THEREIN ON AND AS OF THE
DATE OF SUCH BORROWING BASE REPORT (OR, IN THE CASE OF VALUES, AS OF THE MOST
RECENT DATE THAT SUCH VALUES ARE REQUIRED TO BE DETERMINED) AND ALL RELATED
BORROWING BASE INFORMATION SET FORTH THEREIN AND THE VALUE OF ALL ELIGIBLE
SPECIFIED FINANCIAL ASSETS IS TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND
AS OF THE DATE OF SUCH BORROWING BASE REPORT (OR, IN THE CASE OF VALUES, AS OF
THE MOST RECENT DATE THAT SUCH VALUES ARE REQUIRED TO BE DETERMINED).

 

ARTICLE VI.
AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, the Borrowers shall,
and shall (except in the case of the covenants set forth in Sections 6.01, 6.02,
and 6.03) cause each Subsidiary to:

 

6.01        FINANCIAL STATEMENTS.  DELIVER TO THE ADMINISTRATIVE AGENT AND EACH
LENDER:

 

(A)           AS SOON AS AVAILABLE, BUT IN ANY EVENT WITHIN 90 DAYS AFTER THE
END OF EACH FISCAL YEAR OF KKR FINANCIAL, A CONSOLIDATED BALANCE SHEET OF KKR
FINANCIAL AND ITS SUBSIDIARIES AS AT THE END OF SUCH FISCAL YEAR, AND THE
RELATED CONSOLIDATED STATEMENTS OF INCOME OR OPERATIONS, SHAREHOLDERS’ EQUITY
AND CASH FLOWS FOR SUCH FISCAL YEAR, SETTING FORTH, IN EACH CASE, IN COMPARATIVE
FORM THE FIGURES FOR THE PREVIOUS FISCAL YEAR, ALL IN REASONABLE DETAIL AND
PREPARED IN ACCORDANCE WITH GAAP, AUDITED AND ACCOMPANIED BY A REPORT AND
OPINION OF DELOITTE & TOUCHE LLP OR ANOTHER REGISTERED PUBLIC ACCOUNTING FIRM OF
NATIONALLY RECOGNIZED STANDING, WHICH REPORT AND OPINION SHALL BE PREPARED IN
ACCORDANCE WITH GENERALLY ACCEPTED

 

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AUDITING STANDARDS AND APPLICABLE SECURITIES LAWS AND SHALL NOT BE SUBJECT TO
ANY “GOING CONCERN” OR LIKE QUALIFICATION OR EXCEPTION OR ANY QUALIFICATION OR
EXCEPTION AS TO THE SCOPE OF SUCH AUDIT OR WITH RESPECT TO THE ABSENCE OF ANY
MATERIAL MISSTATEMENT; AND

 

(B)           AS SOON AS AVAILABLE, BUT IN ANY EVENT WITHIN 45 DAYS AFTER THE
END OF EACH OF THE FIRST THREE FISCAL QUARTERS OF EACH FISCAL YEAR OF KKR
FINANCIAL, A CONSOLIDATED BALANCE SHEET OF KKR FINANCIAL AND ITS SUBSIDIARIES AS
AT THE END OF SUCH FISCAL QUARTER, AND THE RELATED CONSOLIDATED STATEMENTS OF
INCOME OR OPERATIONS, SHAREHOLDERS’ EQUITY AND CASH FLOWS FOR SUCH FISCAL
QUARTER AND FOR THE PORTION OF KKR FINANCIAL’S FISCAL YEAR THEN ENDED, SETTING
FORTH IN EACH CASE IN COMPARATIVE FORM THE FIGURES FOR THE CORRESPONDING FISCAL
QUARTER OF THE PREVIOUS FISCAL YEAR AND THE CORRESPONDING PORTION OF THE
PREVIOUS FISCAL YEAR, ALL IN REASONABLE DETAIL, CERTIFIED BY THE CHIEF EXECUTIVE
OFFICER, CHIEF FINANCIAL OFFICER, TREASURER OR CONTROLLER OF KKR FINANCIAL AS
FAIRLY PRESENTING THE FINANCIAL CONDITION, RESULTS OF OPERATIONS, SHAREHOLDERS’
EQUITY AND CASH FLOWS OF KKR FINANCIAL AND ITS SUBSIDIARIES IN ACCORDANCE WITH
GAAP, SUBJECT ONLY TO NORMAL YEAR-END AUDIT ADJUSTMENTS AND THE ABSENCE OF
FOOTNOTES.

 

As to any information contained in materials furnished pursuant to
Section 6.02(d), the Borrowers shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrowers to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.

 

6.02        CERTIFICATES; OTHER INFORMATION.   DELIVER TO THE ADMINISTRATIVE
AGENT AND EACH LENDER, IN FORM AND DETAIL REASONABLY SATISFACTORY TO THE
ADMINISTRATIVE AGENT:

 

(A)           CONCURRENTLY WITH THE DELIVERY OF THE FINANCIAL STATEMENTS
REFERRED TO IN SECTION 6.01(A), (I) A CERTIFICATE OF THE REGISTERED PUBLIC
ACCOUNTING FIRM CERTIFYING SUCH FINANCIAL STATEMENTS AND STATING THAT IN MAKING
THE EXAMINATION NECESSARY THEREFOR NO KNOWLEDGE WAS OBTAINED OF ANY DEFAULT OR,
IF ANY SUCH DEFAULT SHALL EXIST, STATING THE NATURE AND STATUS OF SUCH EVENT
(WHICH CERTIFICATE MAY BE LIMITED TO THE EXTENT REQUIRED BY ACCOUNTING RULES,
GUIDELINES OR PRACTICES), (II) SETTING FORTH REASONABLY DETAILED CALCULATIONS
DEMONSTRATING COMPLIANCE WITH THE FINANCIAL COVENANTS CONTAINED IN SECTION 7.09
AND (III) STATING WHETHER ANY CHANGE IN GAAP OR IN THE APPLICATION THEREOF WHICH
IS MATERIAL IN ANY RESPECT TO KKR FINANCIAL’S FINANCIAL STATEMENTS HAS OCCURRED
SINCE THE DATE OF THE AUDITED FINANCIAL STATEMENTS AND, IF ANY SUCH CHANGE HAS
OCCURRED, SPECIFYING THE EFFECT OF SUCH CHANGE ON THE FINANCIAL STATEMENTS
ACCOMPANYING SUCH CERTIFICATE;

 

(B)           CONCURRENTLY WITH THE DELIVERY OF THE FINANCIAL STATEMENTS
REFERRED TO IN SECTIONS 6.01(A) AND 6.01(B), A DULY COMPLETED COMPLIANCE
CERTIFICATE SIGNED BY THE CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER,
TREASURER OR CONTROLLER OF THE BORROWERS;

 

(C)           AS SOON AS AVAILABLE AND IN ANY EVENT NOT LATER THAN THE
20TH BUSINESS DAY OF THE CALENDAR MONTH FOLLOWING EACH MONTHLY ACCOUNTING PERIOD
(ENDING ON THE LAST DAY OF EACH CALENDAR MONTH) OF THE BORROWERS, A BORROWING
BASE REPORT AS AT THE LAST DAY OF SUCH ACCOUNTING PERIOD;

 

(D)           PROMPTLY BUT NO LATER THAN FIVE BUSINESS DAYS AFTER ANY DATE ON
WHICH A BORROWER GRANTS A LIEN ON ASSETS IN CONNECTION WITH THE INCURRENCE OF
INDEBTEDNESS (INCLUDING, FOR AVOIDANCE OF DOUBT, ANY ISSUANCE OF SECURED BONDS
OR ISSUANCE OF NOTES IN CONNECTION WITH A CLO), A BORROWING BASE REPORT AS OF
THE DATE OF THE INCURRENCE OF SUCH INDEBTEDNESS;

 

(E)           PROMPTLY BUT NO LATER THAN FIVE BUSINESS DAYS AFTER ANY BORROWER
SHALL AT ANY TIME HAVE KNOWLEDGE THAT THERE IS A BORROWING BASE DEFICIENCY, A
BORROWING BASE REPORT AS AT THE DATE ANY BORROWER HAS KNOWLEDGE OF SUCH
BORROWING BASE DEFICIENCY INDICATING THE AMOUNT OF THE BORROWING BASE DEFICIENCY
AS AT THE DATE SUCH BORROWER OBTAINED KNOWLEDGE OF SUCH DEFICIENCY AND THE
AMOUNT OF THE BORROWING BASE DEFICIENCY AS OF THE DATE NOT EARLIER THAN TWO
BUSINESS DAYS PRIOR TO THE DATE THE BORROWING BASE REPORT IS DELIVERED PURSUANT
TO THIS PARAGRAPH;

 

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(F)            ON A MONTHLY BASIS OR AS OTHERWISE APPROVED BY THE ADMINISTRATIVE
AGENT, AN UPDATE AS TO THE VALUE OF ALL ELIGIBLE SPECIFIED FINANCIAL ASSETS
CONTAINED IN THE BORROWING BASE; PROVIDED THAT DURING ANY PERIOD IN WHICH, AND
FOR SO LONG AS, AVAILABILITY IS EQUAL TO AN AMOUNT THAT IS LESS THAN 10% OF THE
BORROWING BASE, SUCH UPDATES AS TO VALUE SHALL BE DELIVERED ON A WEEKLY BASIS;

 

(G)           PROMPTLY AFTER THE SAME ARE AVAILABLE, COPIES OF EACH ANNUAL
REPORT, PROXY OR FINANCIAL STATEMENT OR OTHER REPORT OR COMMUNICATION SENT TO
THE STOCKHOLDERS OF KKR FINANCIAL, AND COPIES OF ALL ANNUAL, REGULAR, PERIODIC
AND SPECIAL REPORTS AND REGISTRATION STATEMENTS WHICH KKR FINANCIAL MAY FILE OR
BE REQUIRED TO FILE WITH THE SEC UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, AND NOT OTHERWISE REQUIRED TO BE DELIVERED TO THE
ADMINISTRATIVE AGENT PURSUANT HERETO; AND

 

(H)           PROMPTLY FOLLOWING ANY REQUEST THEREFOR, SUCH OTHER INFORMATION
REGARDING THE OPERATIONS, BUSINESS AFFAIRS AND FINANCIAL CONDITION OF THE
BORROWERS, OR COMPLIANCE WITH THE TERMS OF THIS AGREEMENT, AS THE ADMINISTRATIVE
AGENT OR ANY LENDER MAY REASONABLY REQUEST.

 

Documents required to be delivered pursuant to Section 6.01(a) or 6.01(b) or
Section 6.02(f) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which KKR
Financial posts such documents, or provides a link thereto on KKR Financial’s
website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on KKR Financial’s behalf on an Internet
or intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that (i) the Borrowers shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrowers to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrowers shall notify the Administrative Agent and each Lender (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents.  The Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrowers with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

 

The Borrowers hereby acknowledge that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders materials and/or information
provided by or on behalf of the Borrowers hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to KKR Financial or its securities) (each, a
“Public Lender”).  Each of the Borrowers hereby agrees that (w) all Borrower
Materials that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (x) by marking
Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized
the Administrative Agent, the Arranger and the Lenders to treat such Borrower
Materials as not containing any material non-public information with respect to
the Borrowers or any securities for purposes of United States Federal and state
securities laws (provided, however, that to the extent such Borrower Materials
constitute Information, they shall be treated as set forth in Section 10.07);
(y) all Borrower Materials marked “PUBLIC” are permitted to be made available
through a portion of the Platform designated “Public Investor;” and (z) the
Administrative Agent and the Arranger shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform other than that which is designated “Public Investor.”

 

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6.03        NOTICES.  PROMPTLY NOTIFY THE ADMINISTRATIVE AGENT AND EACH LENDER
UPON A RESPONSIBLE OFFICER OF A BORROWER OBTAINING KNOWLEDGE THEREOF:

 

(A)           OF THE OCCURRENCE OF ANY DEFAULT;

 

(B)           OF 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 BORROWERS AND THEIR SUBSIDIARIES IN AN AGGREGATE
AMOUNT EXCEEDING $25,000,000; AND

 

(C)           ANY OTHER DEVELOPMENT THAT RESULTS IN, OR COULD REASONABLY BE
EXPECTED TO RESULT IN, A MATERIAL ADVERSE EFFECT; INCLUDING (I) BREACH OR
NON-PERFORMANCE OF, OR ANY DEFAULT UNDER, A CONTRACTUAL OBLIGATION OF EITHER OF
THE BORROWERS OR ANY SUBSIDIARY; (II) ANY DISPUTE, LITIGATION, INVESTIGATION,
PROCEEDING OR SUSPENSION BETWEEN EITHER OF THE BORROWERS OR ANY SUBSIDIARY AND
ANY GOVERNMENTAL AUTHORITY; OR (III) THE FILING OR COMMENCEMENT OF, OR ANY
MATERIAL DEVELOPMENT IN, ANY LITIGATION OR PROCEEDING AFFECTING THE EITHER OF
THE BORROWERS OR ANY SUBSIDIARY, INCLUDING PURSUANT TO ANY APPLICABLE
ENVIRONMENTAL LAWS;

 

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of
a Responsible Officer of the applicable Borrower setting forth details of the
occurrence referred to therein and stating what action such Borrower has taken
and proposes to take with respect thereto.  Each notice pursuant to
Section 6.03(a) shall describe with particularity any and all provisions of this
Agreement and any other Loan Document that have been breached.

 

6.04        PAYMENT OF OBLIGATIONS.  PAY AND DISCHARGE 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) SUCH BORROWER 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.

 

6.05        PRESERVATION OF EXISTENCE, ETC.  (A) PRESERVE, RENEW AND MAINTAIN IN
FULL FORCE AND EFFECT ITS LEGAL EXISTENCE AND GOOD STANDING UNDER THE LAWS OF
THE JURISDICTION OF ITS ORGANIZATION EXCEPT IN A TRANSACTION PERMITTED BY
SECTION 7.04 OR 7.05; AND (B) TAKE ALL REASONABLE ACTION TO MAINTAIN ALL RIGHTS,
PRIVILEGES, PERMITS, LICENSES AND FRANCHISES NECESSARY IN THE NORMAL CONDUCT OF
ITS BUSINESS, EXCEPT TO THE EXTENT THAT FAILURE TO DO SO COULD NOT REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

6.06        MAINTENANCE OF PROPERTIES.  (A) MAINTAIN, PRESERVE AND PROTECT ALL
OF ITS MATERIAL PROPERTIES AND EQUIPMENT NECESSARY IN THE OPERATION OF ITS
BUSINESS IN GOOD WORKING ORDER AND CONDITION, ORDINARY WEAR AND TEAR EXCEPTED;
AND (B) MAKE ALL NECESSARY REPAIRS THERETO AND RENEWALS AND REPLACEMENTS THEREOF
EXCEPT WHERE THE FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

6.07        MAINTENANCE OF INSURANCE.  MAINTAIN WITH FINANCIALLY SOUND AND
REPUTABLE INSURANCE COMPANIES, INSURANCE WITH RESPECT TO ITS PROPERTIES AND
BUSINESS AGAINST LOSS OR DAMAGE OF THE KINDS CUSTOMARILY INSURED AGAINST BY
PERSONS ENGAGED IN THE SAME OR SIMILAR BUSINESS, OF SUCH TYPES AND IN SUCH
AMOUNTS AS ARE CUSTOMARILY CARRIED UNDER SIMILAR CIRCUMSTANCES BY SUCH OTHER
PERSONS.

 

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6.08        COMPLIANCE WITH LAWS.  COMPLY IN ALL MATERIAL RESPECTS WITH THE
REQUIREMENTS OF ALL RELEVANT LAWS AND ALL ORDERS, WRITS, INJUNCTIONS AND DECREES
APPLICABLE TO IT OR TO ITS BUSINESS OR PROPERTY, EXCEPT IN SUCH INSTANCES IN
WHICH (A) SUCH REQUIREMENT OF LAW OR ORDER, WRIT, INJUNCTION OR DECREE IS BEING
CONTESTED IN GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED; OR
(B) THE FAILURE TO COMPLY THEREWITH COULD NOT REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

6.09        BOOKS AND RECORDS.  MAINTAIN PROPER BOOKS OF RECORD AND ACCOUNT, IN
CONFORMITY WITH GAAP CONSISTENTLY APPLIED.

 

6.10        INSPECTION RIGHTS.  PERMIT REPRESENTATIVES AND INDEPENDENT
CONTRACTORS OF THE ADMINISTRATIVE AGENT AND EACH LENDER TO VISIT AND INSPECT ANY
OF ITS PROPERTIES, TO EXAMINE ITS CORPORATE, FINANCIAL AND OPERATING RECORDS,
AND MAKE COPIES THEREOF OR ABSTRACTS THEREFROM, AND TO DISCUSS ITS AFFAIRS,
FINANCES AND ACCOUNTS WITH ITS DIRECTORS, OFFICERS, AND INDEPENDENT PUBLIC
ACCOUNTANTS, ALL AT SUCH REASONABLE TIMES DURING NORMAL BUSINESS HOURS AND AS
OFTEN AS MAY BE REASONABLY DESIRED, UPON REASONABLE ADVANCE NOTICE TO THE
BORROWERS (SUBJECT TO REASONABLE REQUIREMENTS OF CONFIDENTIALITY); PROVIDED,
HOWEVER, THAT WHEN AN EVENT OF DEFAULT EXISTS THE ADMINISTRATIVE AGENT OR ANY
LENDER (OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR INDEPENDENT CONTRACTORS)
MAY DO ANY OF THE FOREGOING AT THE EXPENSE OF THE BORROWERS AT ANY TIME DURING
NORMAL BUSINESS HOURS AND WITHOUT ADVANCE NOTICE.

 

6.11        AUDIT RIGHTS.  PERMIT REPRESENTATIVES DESIGNATED BY ADMINISTRATIVE
AGENT (INCLUDING ANY CONSULTANTS, ACCOUNTANTS, LAWYERS AND APPRAISERS RETAINED
BY THE ADMINISTRATIVE AGENT) TO CONDUCT EVALUATIONS AND APPRAISALS OF THE
BORROWER’S COMPUTATION OF THE BORROWING BASE AND THE ASSETS INCLUDED IN THE
BORROWING BASE, ALL AT SUCH REASONABLE TIMES AS REQUESTED; PROVIDED THAT, SO
LONG AS NO DEFAULT HAS OCCURRED AND IS CONTINUING, THE AUDIT RIGHTS SET FORTH IN
THIS SECTION 6.11 MAY BE EXERCISED ONLY TWICE PER CALENDAR YEAR.  THE BORROWERS
SHALL PAY THE REASONABLE FEES AND EXPENSES OF ANY REPRESENTATIVES RETAINED BY
THE ADMINISTRATIVE AGENT TO CONDUCT ANY SUCH EVALUATION OR APPRAISAL; PROVIDED
THAT THE BORROWERS SHALL NOT BE REQUIRED TO PAY SUCH FEES AND EXPENSES FOR MORE
THAN ONE SUCH EVALUATION OR APPRAISAL DURING ANY CALENDAR YEAR UNLESS AN EVENT
OF DEFAULT HAS OCCURRED AND IS CONTINUING AT THE TIME OF ANY SUBSEQUENT
EVALUATION OR APPRAISAL DURING SUCH CALENDAR YEAR.  THE BORROWERS ALSO AGREE TO
MODIFY OR ADJUST THE COMPUTATION OF THE BORROWING BASE IN ACCORDANCE WITH THE
TERMS OF THIS AGREEMENT TO THE EXTENT REQUIRED BY THE ADMINISTRATIVE AGENT OR
THE REQUIRED LENDERS AS A RESULT OF ANY SUCH EVALUATION OR APPRAISAL, PROVIDED
THAT IF THE BORROWERS DEMONSTRATE THAT SUCH EVALUATION OR APPRAISAL IS
INCORRECT, THE BORROWERS SHALL BE PERMITTED TO RE-ADJUST THEIR COMPUTATION OF
THE BORROWING BASE.

 

6.12        USE OF PROCEEDS.  USE THE PROCEEDS OF THE LOANS ONLY FOR WORKING
CAPITAL REQUIREMENTS AND OTHER GENERAL CORPORATE PURPOSES CONSISTENT WITH KKR
FINANCIAL FORM 10-K, INCLUDING THE ACQUISITION AND FUNDING (EITHER DIRECTLY OR
THROUGH ONE OR MORE WHOLLY OWNED SUBSIDIARIES) OF SECURED AND UNSECURED
LEVERAGED LOANS, MEZZANINE LOANS, HIGH-YIELD SECURITIES, MORTGAGE BONDS AND
OTHER PORTFOLIO INVESTMENTS.  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 FRB, INCLUDING REGULATIONS T, U AND X.

 

6.13        INVESTMENT POLICIES.  COMPLY WITH THE INVESTMENT POLICIES ADOPTED BY
THE BOARD OF DIRECTORS OF KKR FINANCIAL AS IN EFFECT ON THE CLOSING DATE (AS
SUCH POLICIES MAY BE AMENDED, SUPPLEMENTED OR MODIFIED FROM TIME TO TIME),
EXCEPT TO THE EXTENT THAT THE FAILURE TO SO COMPLY COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

6.14        FURTHER ASSURANCES.  TAKE SUCH ACTION FROM TIME TO TIME AS SHALL
REASONABLY BE REQUESTED BY THE ADMINISTRATIVE AGENT TO EFFECTUATE THE PURPOSES
AND OBJECTIVES OF THIS AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE BORROWERS SHALL TAKE SUCH ACTION FROM TIME TO TIME (INCLUDING
FILING APPROPRIATE UNIFORM COMMERCIAL CODE FINANCING STATEMENTS AND EXECUTING
AND DELIVERING SUCH ASSIGNMENTS, SECURITY AGREEMENTS AND OTHER INSTRUMENTS) AS
SHALL BE REASONABLY REQUESTED BY THE ADMINISTRATIVE AGENT TO CREATE, IN FAVOR OF
THE COLLATERAL AGENT FOR THE BENEFIT OF THE LENDERS, PERFECTED SECURITY
INTERESTS AND LIENS IN THE COLLATERAL.

 

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6.15        Portfolio Valuation and Diversification, Etc.

 

(A)           INDUSTRY CLASSIFICATION GROUPS.  FOR PURPOSES OF THIS AGREEMENT,
EACH BORROWER SHALL IN ITS REASONABLE DETERMINATION ASSIGN EACH SPECIFIED
FINANCIAL ASSET TO AN INDUSTRY CLASSIFICATION GROUP.  TO THE EXTENT THAT ANY
SPECIFIED FINANCIAL ASSET IS NOT CORRELATED WITH THE RISKS OF OTHER SPECIFIED
FINANCIAL ASSETS IN AN INDUSTRY CLASSIFICATION GROUP ESTABLISHED BY MOODY’S,
SUCH PORTFOLIO INVESTMENT MAY BE ASSIGNED BY THE APPLICABLE BORROWER TO AN
INDUSTRY CLASSIFICATION GROUP THAT IS MORE CLOSELY CORRELATED TO SUCH SPECIFIED
FINANCIAL ASSET.  IN THE ABSENCE OF ANY CORRELATION, SUCH BORROWER SHALL BE
PERMITTED, UPON NOTICE TO THE ADMINISTRATIVE AGENT TO CREATE UP TO THREE
ADDITIONAL INDUSTRY CLASSIFICATION GROUPS FOR PURPOSES OF THIS AGREEMENT.

 

(B)           PORTFOLIO VALUATION, ETC.

 

(I)            SETTLEMENT DATE BASIS. SOLELY FOR PURPOSES OF DETERMINING THE
BORROWING BASE, ALL DETERMINATIONS OF WHETHER AN INVESTMENT IS TO BE INCLUDED AS
AN ELIGIBLE SPECIFIED FINANCIAL ASSET SHALL BE DETERMINED ON A SETTLEMENT-DATE
BASIS (MEANING THAT ANY INVESTMENT THAT HAS BEEN PURCHASED WILL NOT BE TREATED
AS AN ELIGIBLE SPECIFIED FINANCIAL ASSET UNTIL SUCH PURCHASE HAS SETTLED, AND
ANY ELIGIBLE SPECIFIED FINANCIAL ASSET WHICH HAS BEEN SOLD WILL NOT BE EXCLUDED
AS A ELIGIBLE SPECIFIED FINANCIAL ASSET UNTIL SUCH SALE HAS SETTLED); PROVIDED
THAT NO SUCH INVESTMENT SHALL BE INCLUDED AS AN ELIGIBLE SPECIFIED FINANCIAL
ASSET TO THE EXTENT THAT IT HAS NOT BEEN PAID FOR IN FULL.

 

(II)           DETERMINATION OF VALUES. THE BORROWERS WILL CONDUCT REVIEWS OF
THE VALUE TO BE ASSIGNED TO EACH OF ITS ELIGIBLE SPECIFIED FINANCIAL ASSETS AS
FOLLOWS:

 

(A)          QUOTED INVESTMENTS. WITH RESPECT TO SPECIFIED FINANCIAL ASSETS
(INCLUDING CASH EQUIVALENTS) FOR WHICH MARKET QUOTATIONS ARE READILY AVAILABLE,
THE BORROWERS SHALL, NOT LESS FREQUENTLY THAN ONCE EACH CALENDAR MONTH,
DETERMINE THE MARKET VALUE OF SUCH SPECIFIED FINANCIAL ASSETS IN ACCORDANCE WITH
THEIR VALUATION POLICIES, AS FOLLOWS (IN THE FOLLOWING ORDER OF PRIORITY):

 

(1)          IF THE ELIGIBLE SPECIFIED FINANCIAL ASSET IS OF A TYPE SOLD ON A
RECOGNIZED EXCHANGE, THE VALUE IS THE DOLLAR EQUIVALENT AMOUNT OF THE CLOSING
PRICE ON THE EXCHANGE AS OF SUCH DATE;

 

(2)          IF THE ELIGIBLE SPECIFIED FINANCIAL ASSET IS OF A TYPE FOR WHICH
SALES QUOTATIONS ARE PROVIDED BY IDC, MARKIT, LOAN PRICING CORPORATION, IPS OR
ANY OTHER PRICING SERVICE APPROVED BY THE ADMINISTRATIVE AGENT, IN ITS
REASONABLE DISCRETION, THE VALUE IS THE DOLLAR EQUIVALENT AMOUNT OF THE SALES
PRICE PROVIDED BY THE PRICING SERVICE AS OF SUCH DATE;

 

(3)          IF THE ELIGIBLE SPECIFIED FINANCIAL ASSET IS OF A TYPE FOR WHICH
SALES QUOTATIONS ARE AVAILABLE FROM BANK OF AMERICA, BARCLAYS BANK PLC,
CITIGROUP, CREDIT SUISSE, DEUTSCHE BANK, GOLDMAN SACHS, JPMORGAN, MORGAN
STANLEY, UBS, WELLS FARGO OR ANY OF THEIR RESPECTIVE AFFILIATES OR ANY OTHER
DEALERS APPROVED BY THE ADMINISTRATIVE AGENT, IN ITS REASONABLE DISCRETION, THE
VALUE IS THE DOLLAR EQUIVALENT AMOUNT OF THE BID PRICE AS OF SUCH DATE PROVIDED
BY ANY SUCH DEALER; AND

 

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(4)          IN ALL OTHER CASES, THE VALUE IS THE AMOUNT DETERMINED BY A PRICING
OR QUOTATION SERVICE APPROVED BY THE APPLICABLE BORROWER’S BOARD OF DIRECTORS
AND DESIGNATED IN WRITING TO THE ADMINISTRATIVE AGENT (WHICH DESIGNATION SHALL
BE ACCOMPANIED BY A COPY OF A RESOLUTION OF THE BOARD THAT SUCH PRICING OR
QUOTATION SERVICE HAS BEEN APPROVED BY THE BORROWER).

 

(B)           UNQUOTED INVESTMENTS. WITH RESPECT TO ANY SPECIFIED FINANCIAL
ASSET FOR WHICH MARKET QUOTATIONS ARE NOT READILY AVAILABLE, THE BORROWERS SHALL
CONDUCT INTERNAL REVIEWS OF SUCH SPECIFIED FINANCIAL ASSET AT LEAST ONCE EACH
CALENDAR MONTH IN ORDER TO DETERMINE THE FAIR VALUE OF SUCH SPECIFIED FINANCIAL
ASSET.  SUCH INTERNAL REVIEWS AND DETERMINATIONS OF VALUE SHALL TAKE INTO
ACCOUNT ANY EVENTS OF WHICH THE BORROWERS HAVE KNOWLEDGE THAT ADVERSELY AFFECT
THE VALUE OF SPECIFIED FINANCIAL ASSETS.

 

FOR ANY PARTICULAR ELIGIBLE SPECIFIED FINANCIAL ASSET WHOSE CURRENT VALUE IS
DETERMINED PURSUANT TO AN INTERNAL REVIEW IN ACCORDANCE WITH THIS
SECTION 6.15(B)(II)(B), TO THE EXTENT SUCH ELIGIBLE SPECIFIED FINANCIAL ASSET IS
(I) INCLUDED IN THE BORROWING BASE AND (II) HAS A FAIR VALUE IN EXCESS OF $10
MILLION INDIVIDUALLY OR IN EXCESS OF $25 MILLION IN THE AGGREGATE WHEN TAKEN
TOGETHER WITH ALL OTHER SUCH ELIGIBLE SPECIFIED FINANCIAL ASSETS, THE BORROWERS
SHALL DELIVER TO THE ADMINISTRATIVE AGENT A NEGATIVE ASSURANCE OR VALUATION
OPINION FROM AN INDEPENDENT THIRD-PARTY APPRAISAL FIRM WITHIN 45 DAYS OF THE END
OF EACH APPLICABLE FISCAL QUARTER.

 

(C)           FAILURE TO DETERMINE VALUES. IF THE BORROWERS SHALL FAIL TO
DETERMINE THE VALUE OF ANY ELIGIBLE SPECIFIED FINANCIAL ASSET FOR WHICH MARKET
QUOTATION(S) ARE NOT READILY AVAILABLE AS AT ANY DATE PURSUANT TO THE
REQUIREMENTS OF THE FOREGOING SUB-CLAUSES (A) OR (B), THEN THE “VALUE” OF SUCH
PORTFOLIO INVESTMENT AS AT SUCH DATE SHALL BE DEEMED TO BE ZERO.

 

6.16        CALCULATION OF BORROWING BASE.  (A) FOR PURPOSES OF THIS AGREEMENT,
THE “BORROWING BASE” SHALL MEAN AND BE DETERMINED AS, AS AT ANY DATE OF
DETERMINATION, THE SUM (EXPRESSED IN DOLLARS) OF THE PRODUCTS OF (X) THE VALUE
OF EACH SPECIFIED FINANCIAL ASSET THAT IS AN ELIGIBLE SPECIFIED FINANCIAL ASSET
AS OF THE MOST RECENT DATE SUCH VALUE IS REQUIRED TO BE DETERMINED PURSUANT TO
SECTION 6.02 AND (Y) THE SPECIFIED PERCENTAGE APPLICABLE TO SUCH SPECIFIED
FINANCIAL ASSET; PROVIDED THAT:

 

(I)            TO THE EXTENT THAT THE AGGREGATE VALUE (WITHOUT DUPLICATION) OF
ANY ELIGIBLE SPECIFIED FINANCIAL ASSET SHOWN IN THE TABLE BELOW WOULD EXCEED THE
APPLICABLE SUBLIMIT SET FORTH ACROSS FROM SUCH ELIGIBLE SPECIFIED FINANCIAL
ASSET, SUCH EXCESS SHALL BE EXCLUDED FROM THE BORROWING BASE (I.E., THE
SPECIFIED PERCENTAGE APPLICABLE TO THE EXCESS OVER SUCH SUBLIMIT SHALL BE 0%):

 

Eligible Specified Financial Asset

 

Sublimits

 

Eligible Specified Financial Assets that have a rating between CCC+ and CCC-
(inclusive)

 

$200 million

 

Eligible Specified Financial Assets that are Mezzanine Obligations

 

$160 million

 

Eligible Specified Financial Assets that are Mortgage-related Debt Securities

 

$40 million

 

 

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(II)           TO THE EXTENT THAT THE AGGREGATE NET VALUE AMOUNTS OF ELIGIBLE
SPECIFIED FINANCIAL ASSETS OF ALL ISSUERS IN A CONSOLIDATED GROUP OF
CORPORATIONS OR OTHER ENTITIES WOULD EXCEED 10% OF THE BORROWING BASE, SUCH
EXCESS SHALL BE EXCLUDED FROM THE BORROWING BASE;

 

(III)          TO THE EXTENT THAT THE AGGREGATE NET VALUE AMOUNTS OF ELIGIBLE
SPECIFIED FINANCIAL ASSETS IN ANY SINGLE INDUSTRY CLASSIFICATION GROUP WOULD
EXCEED 20% OF THE BORROWING BASE (WHICH FOR PURPOSES OF THIS CALCULATION SHALL
EXCLUDE THE AGGREGATE AMOUNT OF INVESTMENTS IN, AND ADVANCES TO, FINANCING
SUBSIDIARIES), SUCH EXCESS SHALL BE DISREGARDED FOR PURPOSES OF CALCULATING THE
BORROWING BASE; PROVIDED THAT, WITH RESPECT TO ELIGIBLE SPECIFIED FINANCIAL
ASSETS IN A SINGLE INDUSTRY CLASSIFICATION GROUP FROM TIME TO TIME DESIGNATED BY
THE BORROWERS TO THE ADMINISTRATIVE AGENT, SUCH 20% FIGURE SHALL BE INCREASED TO
30% AND, ACCORDINGLY, ONLY TO THE EXTENT THAT THE NET VALUE AMOUNTS OF ELIGIBLE
SPECIFIED FINANCIAL ASSETS FOR SUCH SINGLE INDUSTRY CLASSIFICATION GROUP WOULD
EXCEED 30% OF THE BORROWING BASE SHALL SUCH EXCESS BE EXCLUDED FROM THE
BORROWING BASE;

 

(IV)          TO THE EXTENT THAT THE AGGREGATE NET VALUE AMOUNTS OF ELIGIBLE
SPECIFIED FINANCIAL ASSETS COMPRISED OF NON-CASH PAY INVESTMENTS WOULD EXCEED
20% OF THE BORROWING BASE, SUCH EXCESS SHALL BE EXCLUDED FROM THE BORROWING
BASE;

 

(V)           TO THE EXTENT THAT THE AGGREGATE AMOUNT OF REVOLVING CREDIT
EXPOSURE OF ALL LENDERS EXCEEDS $50,000,000 AND THE AGGREGATE NET VALUE AMOUNTS
OF ELIGIBLE SPECIFIED FINANCIAL ASSETS (I) COMPRISED OF MEZZANINE OBLIGATIONS OR
(II) THAT HAVE A RATING BETWEEN CCC+ AND CCC- (INCLUSIVE) WOULD (A) IN EITHER
CASE EXCEED 30% OF THE BORROWING BASE OR (B) IN COMBINED AGGREGATE AMOUNT FOR
SUCH CATEGORIES EXCEED 50% OF THE BORROWING BASE, SUCH EXCESS SHALL BE EXCLUDED
FROM THE BORROWING BASE;

 

(VI)          TO THE EXTENT THAT THE AGGREGATE AMOUNT OF REVOLVING CREDIT
EXPOSURE OF ALL LENDERS EXCEEDS $50,000,000 AND THE AGGREGATE NET VALUE AMOUNTS
OF ELIGIBLE SPECIFIED FINANCIAL ASSETS DENOMINATED IN AN ALTERNATE CURRENCY
OTHER THAN DOLLARS WOULD EXCEED 25% OF THE BORROWING BASE, SUCH EXCESS SHALL BE
EXCLUDED FROM THE BORROWING BASE;

 

(VII)         TO THE EXTENT THAT THE AGGREGATE AMOUNT OF REVOLVING CREDIT
EXPOSURE OF ALL LENDERS EXCEEDS $50,000,000 AND THE AGGREGATE NET VALUE AMOUNTS
OF ELIGIBLE SPECIFIED FINANCIAL ASSETS COMPRISED OF MORTGAGE-RELATED DEBT
SECURITIES RATED A OR BETTER WOULD EXCEED 15% OF THE BORROWING BASE, SUCH EXCESS
SHALL BE EXCLUDED FROM THE BORROWING BASE;

 

(VIII)        TO THE EXTENT THAT THE BORROWERS OWN PUBLICLY TRADED COMMON EQUITY
OF A PARTICULAR ISSUER COMPRISING MORE THAN 4.9% OF TOTAL SUCH SHARES
OUTSTANDING OR TO THE EXTENT THAT THE NUMBER OF SUCH SHARES CONTROLLED BY KKR
FINANCIAL OR ITS SUBSIDIARIES EXCEEDS 2.5X THE THREE MONTH AVERAGE DAILY TRADING
VOLUME OF SUCH SHARES (AS CALCULATED AT MONTH END), THE VALUE OF THE EXCESS OVER
SUCH PERCENTAGE SHALL BE EXCLUDED FROM THE BORROWING BASE.

 

(B)           AS USED HEREIN, THE FOLLOWING TERMS HAVE THE FOLLOWING MEANINGS:

 

“Specified Financial Asset” means any financial asset described in one of the
following categories:

 

(A)           CASH, CASH EQUIVALENTS AND SHORT-TERM U.S. GOVERNMENT SECURITIES;

 

(B)           LONG-TERM U.S. GOVERNMENT SECURITIES;

 

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(C)           OTHER SHORT-TERM SECURITIES;

 

(D)           PERFORMING FIRST LIEN BANK LOANS;

 

(E)           PERFORMING SECOND LIEN BANK LOANS;

 

(F)            PERFORMING UNSECURED BANK LOANS;

 

(G)           PERFORMING SECURED CASH PAY HIGH YIELD SECURITIES;

 

(H)           PERFORMING UNSECURED CASH PAY HIGH YIELD SECURITIES;

 

(I)            PERFORMING CASH PAY MEZZANINE OBLIGATIONS / PREFERRED STOCK AND
CONVERTIBLE SECURITIES;

 

(J)            PERFORMING NON-CASH PAY HIGH YIELD SECURITIES;

 

(K)           PERFORMING NON-CASH PAY MEZZANINE OBLIGATIONS / PREFERRED STOCK
AND CONVERTIBLE SECURITIES;

 

(L)            MORTGAGE BONDS RATED A OR BETTER; AND

 

(M)          PUBLICLY TRADED COMMON EQUITY;

 

“Specified Percentage” means, in relation to any Eligible Specified Financial
Asset, the percentage set forth in the table below opposite such Eligible
Specified Financial Asset:

 

Specified Financial Asset

 

Quoted

 

Unquoted

 

Cash, Cash Equivalents and Short-Term U.S. Government Securities

 

100

%

n.a.

 

Long-Term U.S. Government Securities

 

95

%

n.a.

 

Other Short-Term Securities

 

90

%

80

%

Performing First Lien Bank Loans

 

75

%

65

%

Performing Second Lien Bank Loans

 

65

%

55

%

Performing Unsecured Bank Loans

 

60

%

50

%

Performing Secured Cash Pay High Yield Securities

 

70

%

60

%

Performing Unsecured Cash Pay High Yield Securities

 

65

%

55

%

Performing Cash Pay Mezzanine Obligations / Preferred and Convertible Securities

 

50

%

40

%

Performing Non-Cash Pay High Yield Securities

 

55

%

45

%

Performing Non-Cash Pay Mezzanine Obligations / Preferred and Convertible
Securities

 

40

%

30

%

Mortgage bonds rated A or better

 

50

%

40

%

Publicly Traded Common Equity

 

40

%

0

%

 

“Bank Loan” means either (i) a Delayed Draw Loan or (ii) a fully funded term
debt obligation (including, without limitation, term loans, debtor-in-possession
financings and synthetic letter of credit facilities and other similar loans and
investments including interim loans and senior subordinated loans), which are
generally under a syndicated loan or credit facility provided or originated by a
Bank or for which a Bank has acted as underwriter or agent.

 

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“Cash Equivalents” means any of the following:

 

(a)  direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within eighteen
months from the date of acquisition thereof;

 

(b)                                 investments in commercial paper maturing
within 270 days from the date of issuance thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from Moody’s;

 

(c)                                  investments in certificates of deposit,
banker’s acceptances and time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, the Administrative Agent or any domestic
office of any commercial bank organized under the laws of the United States of
America or any State thereof that has a combined capital and surplus and
undivided profits of not less than $500,000,000 and that issues (or the parent
of which issues) commercial paper rated at least “Prime-1” (or the then
equivalent grade) by Moody’s or “A-1” (or the then equivalent grade) by S&P;

 

(d)                                 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
of clause (c) above;

 

(e)                                  investments in “money market funds” within
the meaning of Rule 2a-7 of the Investment Company Act substantially all of
whose assets are invested in investments of the type described in clauses
(a) through (d) above; and

 

(f)                                    other short-term investments utilized by
Foreign Subsidiaries in accordance with normal investment practices for cash
management in investments of a type analogous to the foregoing

 

“Convertible Securities” means, with respect to any Person, the Equity Interests
in such Person comprised of securities convertible into or exchangeable for
shares of capital stock of (or other ownership or profit interests in) such
Person.

 

“First Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a
first lien and first priority perfected security interest on a substantial
portion of the assets of the respective borrower and guarantors obligated in
respect thereof.

 

“High Yield Securities” means debt Securities and Preferred Stock, in each case
(a) issued by public or private issuers, (b) issued pursuant to an effective
registration statement or pursuant to Rule 144A under the Securities Act (or any
successor provision thereunder) and (c) that are not Cash Equivalents, Mezzanine
Obligations or Bank Loans.

 

“Long-Term U.S. Government Securities” means U.S. Government Securities maturing
more than one year from the applicable date of determination.

 

“Mezzanine Obligations” means subordinate loans or Debt Securities (including
convertible Debt Securities) that are senior to all equity classes. For clarity,
Mezzanine Obligations shall not include any preferred stock or any equity
security that is mandatorily redeemable as defined by GAAP.

 

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“Non-Cash Pay Investments” means Performing Non-Cash Pay High Yield Securities
and Performing Non-Cash Pay Mezzanine Obligations.

 

“Other Short-Term Securities” means securities (other than U.S Government
Securities) maturing within one year of the applicable date of determination.

 

“Performing” means (a) with respect to any Specified Financial Asset that is
debt, the issuer of such Specified Financial Asset is not in default of any
payment obligations in respect thereof, after the expiration of any applicable
grace period and (b) with respect to any Specified Financial Asset that is
Preferred Stock, the issuer of such Specified Financial Asset has not failed to
meet any scheduled redemption obligations or to pay its latest declared cash
dividend, after the expiration of any applicable grace period.

 

“Performing Cash Pay Mezzanine Obligations” means Mezzanine Obligations (a) as
to which, at the time of determination, a portion of the interest (including
accretions and “pay-in-kind” interest) for the current monthly, quarterly,
semi-annual or annual period (as applicable) is payable in cash and (b) which
are Performing.

 

“Performing Common Equity” means Equity Interests (other than Preferred Stock)
and warrants of an issuer all of whose outstanding debt is Performing.

 

“Performing First Lien Bank Loans” means First Lien Bank Loans which are
Performing.

 

“Performing Non-Cash Pay High Yield Securities” means Performing High Yield
Securities other than Performing Cash Pay High Yield Securities.

 

“Performing Non-Cash Pay Mezzanine Obligations” means Performing Mezzanine
Obligations other than Performing Cash Pay Mezzanine Obligations.

 

“Performing Second Lien Bank Loans” means Second Lien Bank Loans which are
Performing.

 

“Performing Secured Cash Pay High Yield Securities” means High Yield Securities
(a) which are entitled to the benefit of a security interest on a portion of the
assets of the respective issuer, (b) as to which, at the time of determination,
a portion of the interest (including accretions and “pay-in-kind” interest) for
the current monthly, quarterly, semi-annual or annual period (as applicable) is
payable in cash and (c) which are Performing.

 

“Performing Unsecured Bank Loans” means Unsecured Bank Loans which are
Performing.

 

“Performing Unsecured Cash Pay High Yield Securities” means High Yield
Securities (a) which are unsecured, (b) as to which, at the time of
determination, a portion of the interest (including accretions and “pay-in-kind”
interest) for the current monthly, quarterly, semi-annual or annual period (as
applicable) is payable in cash and (c) which are Performing.

 

“Preferred Stock” as applied to the Equity Interests of any Person, means Equity
Interests of such Person of any class or classes (however designated) that ranks
prior, as to the payment of dividends or as to the distribution of assets upon
any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to any shares (or other interests) of other Equity Interests of such
Person, and shall include, without limitation, cumulative preferred,
non-cumulative preferred, participating preferred and convertible preferred
Equity Interests.

 

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“Publicly Traded Common Equity” means Securities traded on an exchange or other
public marketplace for trading shares.

 

“Second Lien Bank Loan” means a Bank Loan that is entitled to the benefit of a
second lien and second priority perfected security interest on a substantial
portion of the assets of the respective borrower and guarantors obligated in
respect thereof.

 

“Securities” means common and preferred stock, units and participations, member
interests in limited liability companies, partnership interests in partnerships,
notes, bonds, debentures, trust receipts and other obligations, instruments or
evidences of indebtedness, including debt instruments of public and private
issuers and tax-exempt securities (including warrants, rights, put and call
options and other options relating thereto, representing rights, or any
combination thereof) and other property or interests commonly regarded as
securities or any form of interest or participation therein, but not including
Bank Loans.

 

“Short-Term U.S. Government Securities” means U.S. Government Securities
maturing within one year of the applicable date of determination.

 

“Unquoted Common Equity” means Equity Interests (other than Preferred Stock) the
value of which is determined pursuant to Section 6.15(b)(ii)(B) for Borrowing
Base purposes.

 

“Unsecured Bank Loan” means a Bank Loan that is unsecured with respect to the
assets of the respective borrower.

 

“U.S. Government Securities” means securities that are direct obligations of,
and obligations the timely payment of principal and interest on which is fully
guaranteed by, the United States or any agency or instrumentality of the United
States the obligations of which are backed by the full faith and credit of the
United States and in the form of conventional bills, bonds, and notes.

 

ARTICLE VII.
NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, the Borrowers shall
not, nor shall they permit any Subsidiary to, directly or indirectly:

 

7.01                        LIENS.  CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY
LIEN UPON ANY OF ITS PROPERTY, ASSETS OR REVENUES, WHETHER NOW OWNED OR
HEREAFTER ACQUIRED, OTHER THAN THE FOLLOWING:

 

(A)                                  AS TO COLLATERAL ONLY, LIENS PURSUANT TO OR
AS CONTEMPLATED IN ANY LOAN DOCUMENT AND PERMITTED ENCUMBRANCES (ONLY WITH
RESPECT TO CLAUSES (A) AND (E) OF THE DEFINITION THEREOF) SUBORDINATE TO SUCH
LIENS; AND

 

(B)                                 AS TO ALL OTHER ASSETS AND PROPERTIES OF THE
BORROWERS AND THEIR SUBSIDIARIES OTHER THAN COLLATERAL:

 

(I)                                     PERMITTED ENCUMBRANCES;

 

(II)                                  LIENS PURSUANT TO OR AS CONTEMPLATED IN
ANY LOAN DOCUMENT;

 

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(III)                               LIENS EXISTING ON THE DATE HEREOF AND LISTED
ON SCHEDULE 7.01 AND ANY RENEWALS OR EXTENSIONS THEREOF, PROVIDED THAT (I) THE
PROPERTY OR ASSET COVERED THEREBY IS NOT CHANGED, (II) THE AMOUNT SECURED OR
BENEFITED THEREBY IS NOT INCREASED EXCEPT AS CONTEMPLATED BY SECTION 7.03(B),
(III) THE DIRECT OR ANY CONTINGENT OBLIGOR WITH RESPECT THERETO IS NOT CHANGED,
AND (IV) ANY RENEWAL OR EXTENSION OF THE OBLIGATIONS SECURED OR BENEFITED
THEREBY IS PERMITTED BY SECTION 7.03(B);

 

(IV)                              LIENS SECURING INDEBTEDNESS PERMITTED UNDER
SECTION 7.03(K);

 

(V)                                 LIENS ON CASH DEPOSITS WITH ISSUERS OF
LETTERS OF CREDIT IN SUPPORT OF OTHER LETTER OF CREDIT OBLIGATIONS PERMITTED
UNDER SECTION 7.03(I);

 

(VI)                              ANY LIEN EXISTING ON ANY PROPERTY OR ASSET
PRIOR TO THE ACQUISITION THEREOF BY ANY OF THE BORROWERS 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 ANY OF THE BORROWERS 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

 

(VII)                           LIENS ON ANY PROPERTY OR ASSET THAT SECURES ANY
SWAP CONTRACT (INCLUDING ANY TOTAL RATE OF RETURN SWAP CONTRACT) OR ANY OTHER
SECURED INDEBTEDNESS OR ANY RELATED OBLIGATION INCURRED IN CONNECTION WITH THE
TRANSACTIONS CONTEMPLATED THEREBY.

 

FOR THE AVOIDANCE OF DOUBT, EXCEPT TO THE EXTENT THAT THE BORROWERS GRANT A LIEN
TO THE TRUSTEE OF ANY TRUST PREFERRED FINANCING VEHICLE, THE PARTIES AGREE THAT
THE RIGHTS OF SUCH TRUSTEE IN RESPECT OF ANY TRUST PREFERRED INDEBTEDNESS
PERMITTED UNDER THIS AGREEMENT SHALL NOT BE DEEMED A LIEN HEREUNDER.

 

7.02                        INVESTMENTS.  MAKE ANY INVESTMENTS, EXCEPT:

 

(A)                                  PERMITTED INVESTMENTS;

 

(B)                                 INVESTMENTS BY ANY BORROWER OR ANY
SUBSIDIARY EXISTING AS OF THE CLOSING DATE;

 

(C)                                  INVESTMENTS OF THE BORROWERS IN ANY
SUBSIDIARY OR CLO AND INVESTMENTS OF ANY SUBSIDIARY IN ANY BORROWER OR IN
ANOTHER SUBSIDIARY OR CLO;

 

(D)                                 GUARANTEES OF OTHER LETTER OF CREDIT
OBLIGATIONS PERMITTED BY SECTION 7.03;

 

(E)                                  INVESTMENTS IN ANY FINANCING SPE OR TRUST
PREFERRED FINANCING VEHICLE, INCLUDING ANY FINANCING SPE OR TRUST PREFERRED
FINANCING VEHICLE ESTABLISHED AFTER THE DATE HEREOF, FOR THE PURPOSE OF
FACILITATING A SECURITIZATION OR TRUST PREFERRED SECURITIES TRANSACTION; AND

 

(F)                                    OTHER INVESTMENTS (INCLUDING TOTAL RATE
OF RETURN SWAP CONTRACTS AND OTHER SWAP CONTACTS) MADE BY ANY BORROWER OR ANY
SUBSIDIARY IN THE COURSE OF SUCH BORROWER’S OR SUCH SUBSIDIARY’S BUSINESS AND
CONSISTENT WITH THE DESCRIPTION OF BUSINESS IN THE KKR FINANCIAL FORM 10-K.

 

7.03                        INDEBTEDNESS.  CREATE, INCUR, ASSUME OR SUFFER TO
EXIST ANY INDEBTEDNESS, EXCEPT:

 

(A)                                  INDEBTEDNESS UNDER THE LOAN DOCUMENTS;

 

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(B)                                 INDEBTEDNESS OUTSTANDING ON THE DATE HEREOF
AND LISTED ON SCHEDULE 7.03 AND ANY REFINANCINGS, REFUNDINGS, RENEWALS OR
EXTENSIONS THEREOF; PROVIDED THAT (I) THE TERMS AND CONDITIONS OF SUCH
EXTENSIONS, RENEWALS OR REFINANCINGS OF SUCH INDEBTEDNESS DO NOT, IN THE
ADMINISTRATIVE AGENT’S REASONABLE JUDGMENT, MATERIALLY IMPAIR THE PROSPECTS OF
REPAYMENT OF THE OBLIGATIONS BY THE BORROWERS OR IMPAIR ANY BORROWER’S
CREDITWORTHINESS AND (II) SUCH EXTENSIONS, RENEWALS OR REFINANCINGS OF SUCH
INDEBTEDNESS DO NOT RESULT IN AN INCREASE IN THE PRINCIPAL AMOUNT OF SUCH
INDEBTEDNESS SO EXTENDED, RENEWED OR REFINANCED OR ADD ANY BORROWER AS LIABLE
WITH RESPECT THERETO IF SUCH BORROWER WAS NOT LIABLE WITH RESPECT TO THE
ORIGINAL INDEBTEDNESS;

 

(C)                                  INDEBTEDNESS OF ANY BORROWER TO ANY
SUBSIDIARY AND OF ANY SUBSIDIARY TO ANY BORROWER OR ANY OTHER SUBSIDIARY;

 

(D)                                 GUARANTEES OF THE BORROWERS OR ANY
SUBSIDIARY IN RESPECT OF INDEBTEDNESS OTHERWISE PERMITTED HEREUNDER OF THE
BORROWERS OR ANY SUBSIDIARY;

 

(E)                                  OBLIGATIONS (CONTINGENT OR OTHERWISE) OF
THE BORROWERS OR ANY SUBSIDIARY EXISTING OR ARISING UNDER ANY SWAP CONTRACT
(INCLUDING ANY TOTAL RATE OF RETURN SWAP CONTRACT);

 

(F)                                    INDEBTEDNESS OWED TO (INCLUDING
OBLIGATIONS IN RESPECT OF LETTERS OF CREDIT FOR THE BENEFIT OF) ANY PERSON
PROVIDING WORKERS’ COMPENSATION, HEALTH, DISABILITY OR OTHER EMPLOYEE BENEFITS
OR PROPERTY, CASUALTY OR LIABILITY INSURANCE TO ANY BORROWER OR ANY SUBSIDIARY,
PURSUANT TO REIMBURSEMENT OR INDEMNIFICATION OBLIGATIONS TO SUCH PERSON;

 

(G)                                 INDEBTEDNESS IN RESPECT OF PERFORMANCE
BONDS, BID BONDS, APPEAL BONDS, SURETY BONDS AND COMPLETION GUARANTEES AND
SIMILAR OBLIGATIONS, IN EACH CASE, PROVIDED IN THE COURSE OF ORDINARY BUSINESS,
INCLUDING THOSE INCURRED TO SECURE HEALTH, SAFETY AND ENVIRONMENTAL OBLIGATIONS
IN THE ORDINARY COURSE OF BUSINESS;

 

(H)                                 UNSECURED INDEBTEDNESS;

 

(I)                                     OTHER LETTER OF CREDIT OBLIGATIONS, UP
TO A MAXIMUM AMOUNT OUTSTANDING AT ANY TIME NOT GREATER THAN $10,000,000;

 

(J)                                     INDEBTEDNESS ARISING FROM THE OCCASIONAL
HONORING BY A BANK OR OTHER FINANCIAL INSTITUTION OF A CHECK, DRAFT OR SIMILAR
INSTRUMENT DRAWN AGAINST INSUFFICIENT FUNDS IN THE ORDINARY COURSE OF BUSINESS
AND NOT FROM AN OVERDRAFT CREDIT FACILITY GRANTED BY THE BANK OR OTHER FINANCIAL
INSTITUTION;

 

(K)                                  OTHER SECURED INDEBTEDNESS AND ANY OTHER
INDEBTEDNESS THAT IS SECURED BY ASSETS NOT COMPRISING COLLATERAL; AND

 

(L)                                     TRUST PREFERRED INDEBTEDNESS AND RELATED
TRUST PREFERRED GUARANTEES AND TRUST PREFERRED SECURITIES INCURRED, EXECUTED OR
ISSUED RESPECTIVELY, AS PART OF A TRUST PREFERRED SECURITIES TRANSACTION.

 

7.04                        FUNDAMENTAL CHANGES.  MERGE, DISSOLVE, LIQUIDATE,
CONSOLIDATE WITH OR INTO ANOTHER PERSON, OR DISPOSE OF (WHETHER IN ONE
TRANSACTION OR IN A SERIES OF TRANSACTIONS) ALL OR SUBSTANTIALLY ALL OF ITS
ASSETS (WHETHER NOW OWNED OR HEREAFTER ACQUIRED) TO OR IN FAVOR OF ANY PERSON,
EXCEPT THAT, SO LONG AS NO DEFAULT EXISTS OR WOULD RESULT THEREFROM:

 

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(A)                                  ANY SUBSIDIARY MAY MERGE WITH (I) A
BORROWER, PROVIDED THAT SUCH BORROWER SHALL BE THE CONTINUING OR SURVIVING
PERSON, OR (II) ANY ONE OR MORE OTHER SUBSIDIARIES; 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 7.02;

 

(B)                                 ANY SUBSIDIARY MAY DISPOSE OF ALL OR
SUBSTANTIALLY ALL OF ITS ASSETS (UPON VOLUNTARY LIQUIDATION OR OTHERWISE) TO A
BORROWER OR TO ANOTHER SUBSIDIARY;

 

(C)                                  ANY SUBSIDIARY MAY LIQUIDATE OR DISSOLVE IF
THE BORROWER WHICH IS THE PARENT OF SUCH SUBSIDIARY DETERMINES IN GOOD FAITH
THAT SUCH LIQUIDATION OR DISSOLUTION IS IN THE BEST INTERESTS OF SUCH BORROWER
AND IS NOT MATERIALLY DISADVANTAGEOUS TO THE LENDERS;

 

(D)                                 ANY BORROWER MAY EFFECT A DISPOSITION
PERMITTED BY SECTION 7.05; AND

 

(E)                                  ANY FINANCING SPE MAY SELL, TRANSFER, LEASE
OR OTHERWISE DISPOSE OF (IN ONE TRANSACTION OR IN A SERIES OF RELATED
TRANSACTIONS) ALL OR SUBSTANTIALLY ALL OF ITS ASSETS IN CONNECTION WITH A
SECURITIZATION, PROVIDED THAT THE PROCEEDS OF SUCH SECURITIZATION IN EXCESS OF
THE AMOUNT SUCH FINANCING SPE IS REQUIRED TO PAY TO ANY HOLDER OF ANY DEBT
OBLIGATION OR EQUITY INTERESTS ISSUED BY SUCH FINANCING SPE PURSUANT TO THE
TERMS OF SUCH SECURITIZATION ARE PAID TO A BORROWER PROMPTLY THEREAFTER.

 

Notwithstanding the foregoing, none of the Borrowers will, nor will permit any
of its Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by such Borrower and its Subsidiaries on the
date of execution of this Agreement, businesses reasonably related thereto or
that is a reasonable extension, development or expansion thereof. It is
understood that a Trust Preferred Securities Transaction consummated for
purposes of financing the type of business of such Borrower or Subsidiary as of
the date of execution of this Agreement shall not be deemed to violate the
foregoing restriction.

 

For the avoidance of doubt, the transfer of legal ownership of any Trust
Preferred Indebtedness permitted under this Agreement to a trustee pursuant to a
Trust Preferred Securities Transaction shall not be deemed to be a sale,
transfer, lease or other disposition of any assets to such trustee.

 

7.05                        DISPOSITIONS.  MAKE ANY DISPOSITION OR ENTER INTO
ANY AGREEMENT TO MAKE ANY DISPOSITION, EXCEPT:

 

(A)                                  DISPOSITIONS OF OBSOLETE OR WORN OUT
PROPERTY, WHETHER NOW OWNED OR HEREAFTER ACQUIRED, IN THE ORDINARY COURSE OF
BUSINESS;

 

(B)                                 DISPOSITIONS (WITHOUT RECOURSE OR
INDEMNIFICATION FOR CREDIT LOSSES, PROVIDED THAT ORDINARY AND CUSTOMARY
INDEMNIFICATION IS PERMITTED IN ACCORDANCE WITH PREVAILING MARKET PRACTICES) OF
RESIDENTIAL REAL ESTATE ASSETS OF THE BORROWERS (INCLUDING, WITHOUT LIMITATION,
THE DISPOSITION OF MORTGAGE-BACKED SECURITIES), SO LONG AS NO DEFAULT OR EVENT
OF DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD BE CAUSED THEREBY; PROVIDED,
HOWEVER THAT, TO THE EXTENT ANY SUCH RESIDENTIAL REAL ESTATE ASSETS CONSTITUTE
COLLATERAL, BORROWERS SHALL COMPLY WITH THE SECURITY DOCUMENTS WITH RESPECT TO
ANY DISPOSITIONS THEREOF;

 

(C)                                  DISPOSITIONS OF ASSETS OTHER THAN
COLLATERAL IN THE COURSE OF ANY BORROWER’S OR ANY SUBSIDIARY’S BUSINESS AND
CONSISTENT WITH THE DESCRIPTION OF BUSINESS IN THE KKR FINANCIAL FORM 10-K;

 

(D)                                 DISPOSITIONS OF EQUIPMENT OR REAL PROPERTY
TO THE EXTENT THAT (I) SUCH PROPERTY IS EXCHANGED FOR CREDIT AGAINST THE
PURCHASE PRICE OF SIMILAR REPLACEMENT PROPERTY OR (II) THE PROCEEDS OF SUCH
DISPOSITION ARE REASONABLY PROMPTLY APPLIED TO THE PURCHASE PRICE OF SUCH
REPLACEMENT PROPERTY;

 

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(E)                                  DISPOSITIONS OF PROPERTY BY ANY BORROWER OR
SUBSIDIARY TO A BORROWER OR TO A CONSOLIDATED SUBSIDIARY;

 

(F)                                    DISPOSITIONS OF COLLATERAL TO THE EXTENT
PERMITTED BY THIS AGREEMENT OR THE SECURITY DOCUMENTS;

 

(G)                                 DISPOSITIONS PERMITTED BY SECTION 7.04; AND

 

(H)                                 THE DISPOSITION (WITHOUT RECOURSE OR
INDEMNIFICATION FOR CREDIT LOSSES, PROVIDED THAT ORDINARY AND CUSTOMARY
INDEMNIFICATION IS PERMITTED IN ACCORDANCE WITH PREVAILING MARKET PRACTICES) BY
KKR FINANCIAL OF ALL OF THE COMMON STOCK OF KKR HOLDINGS II.

 

For the avoidance of doubt, the transfer of legal ownership of any Trust
Preferred Indebtedness permitted under this Agreement to a trustee pursuant to a
Trust Preferred Securities Transaction shall not be deemed to be a sale,
transfer, lease or other disposition of any assets to said trustee.

 

7.06                        RESTRICTED PAYMENTS.  DECLARE OR MAKE, DIRECTLY OR
INDIRECTLY, ANY RESTRICTED PAYMENT, OR INCUR ANY OBLIGATION (CONTINGENT OR
OTHERWISE) TO DO SO, EXCEPT THAT:

 

(A)                                  SO LONG AS (I) NO EVENT CONSTITUTING A
DEFAULT UNDER SECTIONS 8.01(A), 8.01(G) OR 8.01(H) OR SHALL HAVE OCCURRED AND BE
CONTINUING, AND (II) NO EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING,
IN EACH CASE, AT THE TIME OF OR WOULD RESULT THEREFROM, KKR FINANCIAL MAY
DECLARE AND MAKE RESTRICTED PAYMENTS IN CASH TO ANY PERSON THAT OWNS AN EQUITY
INTEREST IN KKR FINANCIAL, RATABLY ACCORDING TO THEIR RESPECTIVE HOLDINGS OF THE
TYPE OF EQUITY INTEREST OF THE APPLICABLE CLASS OR SERIES IN RESPECT OF WHICH
SUCH RESTRICTED PAYMENT IS BEING MADE;

 

(B)                                 EACH SUBSIDIARY (INCLUDING, WITHOUT
LIMITATION, THE SUBSIDIARIES OF KKR FINANCIAL PARTY HERETO AS BORROWERS) MAY
DECLARE AND MAKE RESTRICTED PAYMENTS TO THE BORROWERS, AND TO ANY OTHER PERSON
THAT OWNS AN EQUITY INTEREST IN SUCH SUBSIDIARY, RATABLY ACCORDING TO THEIR
RESPECTIVE HOLDINGS OF THE TYPE OF EQUITY INTEREST OF THE APPLICABLE CLASS OR
SERIES IN RESPECT OF WHICH SUCH RESTRICTED PAYMENT IS BEING MADE;

 

(C)                                  THE BORROWERS AND EACH SUBSIDIARY MAY
DECLARE AND MAKE DIVIDEND PAYMENTS OR ANY OTHER RESTRICTED PAYMENTS (INCLUDING,
FOR AVOIDANCE OF DOUBT, ANY DISTRIBUTIONS FOR PURPOSES OF SETTLING THE
CONVERSION OF CONVERTIBLE SECURITIES) PAYABLE SOLELY IN THE COMMON STOCK OR
OTHER COMMON EQUITY INTERESTS OF SUCH PERSON; AND

 

(D)                                 ANY BORROWER MAY MAKE RESTRICTED PAYMENTS
PURSUANT TO AND IN ACCORDANCE WITH STOCK OPTION PLANS OR OTHER BENEFIT PLANS FOR
MANAGEMENT OR EMPLOYEES OF SUCH BORROWER AND ITS SUBSIDIARIES.

 

7.07                        TRANSACTIONS WITH AFFILIATES.  ENTER INTO ANY
TRANSACTION OF ANY KIND WITH ANY AFFILIATE OF ANY BORROWER EXCEPT (A) IN THE
ORDINARY COURSE OF BUSINESS AT PRICES AND ON TERMS AND CONDITIONS NOT LESS
FAVORABLE TO SUCH BORROWER OR SUCH SUBSIDIARY THAN COULD BE OBTAINED ON AN
ARM’S-LENGTH BASIS FROM UNRELATED THIRD PARTIES, (B) TRANSACTIONS BETWEEN OR
AMONG ANY BORROWER AND ITS WHOLLY OWNED SUBSIDIARIES NOT INVOLVING ANY OTHER
AFFILIATE, (C) TRANSACTIONS FOR WHICH KKR FINANCIAL OR SUCH SUBSIDIARY IS
OBLIGATED UNDER THE MANAGEMENT AGREEMENT AND (D) ANY RESTRICTED PAYMENT
PERMITTED BY SECTION 7.06.

 

7.08                        BURDENSOME AGREEMENTS.  ENTER INTO ANY CONTRACTUAL
OBLIGATION (OTHER THAN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT) THAT RESTRICTS
OR IMPOSES ANY CONDITION UPON (I) THE ABILITY OF ANY BORROWER OR ANY SUBSIDIARY
TO CREATE, INCUR OR PERMIT TO EXIST ANY LIEN UPON ANY OF ITS PROPERTY OR

 

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ASSETS, OR (II) 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 ANY BORROWER OR ANY OTHER SUBSIDIARY OR TO GUARANTEE
INDEBTEDNESS OF ANY BORROWER OR ANY OTHER SUBSIDIARY; PROVIDED THAT (A) THE
FOREGOING SHALL NOT APPLY TO RESTRICTIONS AND CONDITIONS IMPOSED BY LAW OR BY
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR UPON ANY FINANCING SPE BY ANY
LENDER THERETO OR INVESTOR THEREIN OR UPON ANY TRUST PREFERRED FINANCING VEHICLE
IN RESPECT OF ITS COMMON SECURITIES ISSUED TO A BORROWER OR ANY SUBSIDIARY OF A
BORROWER, (B) THE FOREGOING SHALL NOT APPLY TO RESTRICTIONS AND CONDITIONS
EXISTING ON THE DATE HEREOF IDENTIFIED ON SCHEDULE 7.08 (BUT SHALL APPLY TO ANY
EXTENSION OR RENEWAL OF, OR ANY AMENDMENT OR MODIFICATION EXPANDING THE SCOPE
OF, ANY SUCH RESTRICTION OR CONDITION), (C) THE FOREGOING SHALL NOT APPLY TO
CUSTOMARY RESTRICTIONS AND CONDITIONS CONTAINED IN AGREEMENTS RELATING TO THE
SALE OF A SUBSIDIARY PENDING SUCH SALE, PROVIDED SUCH RESTRICTIONS AND
CONDITIONS APPLY ONLY TO THE SUBSIDIARY THAT IS TO BE SOLD AND SUCH SALE IS
PERMITTED HEREUNDER, (D) CLAUSE (I) 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 AND (E) CLAUSE
(I) OF THE FOREGOING SHALL NOT APPLY TO CUSTOMARY PROVISIONS IN LEASES AND OTHER
CONTRACTS RESTRICTING THE ASSIGNMENT THEREOF.

 

For the avoidance of doubt, except to the extent that the Borrowers grant a Lien
to the trustee of any Trust Preferred Financing Vehicle, the parties agree that
the rights of such trustee in respect of any Trust Preferred Indebtedness
permitted under this Agreement shall not be deemed a Lien hereunder.

 

7.09                        FINANCIAL COVENANTS.

 

(A)                                  CONSOLIDATED TANGIBLE NET WORTH.  PERMIT
ADJUSTED CONSOLIDATED TANGIBLE NET WORTH, AT ANY TIME, TO BE LESS THAN
$700,000,000, PLUS AN AMOUNT EQUAL TO 25% OF THE NET PROCEEDS RECEIVED FROM THE
ISSUANCE AND SALE, AT ANY TIME AFTER THE CLOSING DATE, OF EQUITY INTERESTS OF
KKR FINANCIAL OR ANY SUBSIDIARY (OTHER THAN ISSUANCES TO ANY BORROWER OR A
WHOLLY-OWNED SUBSIDIARY), INCLUDING UPON ANY CONVERSION OF DEBT SECURITIES OF
KKR FINANCIAL INTO SUCH EQUITY INTERESTS.

 

(B)                                 COVERAGE RATIO.  PERMIT THE RATIO OF (A) THE
AGGREGATE VALUE OF THE COLLATERAL TO (B) TOTAL REVOLVING CREDIT EXPOSURE TO BE
LESS THAN 2.00 TO 1.00 AT ANY TIME.

 

(C)                                  LEVERAGE RATIO.  PERMIT THE RATIO OF
ADJUSTED TOTAL LIABILITIES TO ADJUSTED CONSOLIDATED TANGIBLE NET WORTH, AT ANY
TIME, TO EXCEED THE RATIO OF 2.00 TO 1.00.

 

(D)                                 DISTRIBUTIONS.  MAKE ANY DISTRIBUTIONS TO
THEIR RESPECTIVE SHAREHOLDERS (OTHER THAN ANY SUCH SHAREHOLDER THAT IS ITSELF A
BORROWER OR A SUBSIDIARY) IN RESPECT OF ANY TAXABLE YEAR IN AN AGGREGATE AMOUNT
(AS TO ALL SUCH SHAREHOLDERS) IN EXCESS OF 65% OF KKR FINANCIAL’S ESTIMATED
TAXABLE INCOME IN RESPECT OF SUCH TAXABLE YEAR AS REASONABLY DETERMINED BY KKR
FINANCIAL (DETERMINED WITHOUT REGARD TO ANY “PASSIVE ACTIVITY LOSSES” WITHIN THE
MEANING OF SECTION 469 OF THE CODE, ANY “MISCELLANEOUS ITEMIZED DEDUCTIONS”
WITHIN THE MEANING OF SECTION 67 OF THE CODE AND ANY CAPITAL GAINS AND CAPITAL
LOSSES RECOGNIZED ON THE DISPOSITION OF ASSETS, WHICH ARE GENERALLY DETERMINED
ON A PARTNER-BY-PARTNER BASIS WITH REFERENCE TO EACH PARTNER’S TAX BASIS IN
THEIR PARTNERSHIP INTEREST); PROVIDED, THAT NO SUCH DISTRIBUTIONS SHALL BE MADE
UNLESS, BEFORE AND AFTER GIVING EFFECT THERETO, NO BORROWING BASE DEFICIENCY
EXISTS OR WOULD EXIST; AND PROVIDED, FURTHER, THAT NOTWITHSTANDING THE
LIMITATION ON DISTRIBUTIONS (AND IN ADDITION TO THE AMOUNT OF PERMITTED
DISTRIBUTIONS) SET FORTH ABOVE IN THIS SECTION 7.09(D), ANY BORROWER OR
SUBSIDIARY THAT IS A REAL ESTATE INVESTMENT TRUST FOR TAX PURPOSES MAY MAKE
DISTRIBUTIONS IN RESPECT OF ANY CLASS OF PREFERRED SHARES THAT WAS ISSUED TO
SATISFY THE 100-SHAREHOLDER REQUIREMENT IN SECTION 856(A)(5) OF THE CODE IN
ACCORDANCE WITH THE TERMS OF SUCH PREFERRED CLASS OF SHARES.

 

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7.10                        FISCAL YEAR.  PERMIT THE FISCAL YEAR OF THE
BORROWERS TO END ON A DAY OTHER THAN DECEMBER 31 OR PERMIT THE FISCAL QUARTERS
TO END ON DATES OTHER THAN IN A MANNER CONSISTENT WITH BORROWER’S CURRENT
PRACTICE; PROVIDED, HOWEVER, THAT THE BORROWERS MAY, UPON WRITTEN NOTICE TO THE
ADMINISTRATIVE AGENT CHANGE THE FINANCIAL REPORTING CONVENTION SPECIFIED ABOVE
TO ANY OTHER FINANCIAL REPORTING CONVENTION REASONABLY ACCEPTABLE TO THE
ADMINISTRATIVE AGENT.

 

7.11                        LINES OF BUSINESS.  ALTER IN A FUNDAMENTAL MANNER
THE CHARACTER OF THEIR BUSINESS, TAKEN AS A WHOLE, FROM THE BUSINESS CONDUCTED
ON THE CLOSING DATE AND OTHER BUSINESS ACTIVITIES INCIDENTAL OR REASONABLY
RELATED TO ANY OF THE FOREGOING.

 

7.12                        MARGIN REGULATIONS; SECURITIES LAWS.  USE ALL OR ANY
PORTION OF THE PROCEEDS OF ANY CREDIT EXTENDED UNDER THIS AGREEMENT TO PURCHASE
OR CARRY MARGIN STOCK.

 

ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES

 

8.01                        EVENTS OF DEFAULT.  ANY OF THE FOLLOWING SHALL
CONSTITUTE AN EVENT OF DEFAULT:

 

(A)                                  NON-PAYMENT.  ANY BORROWER FAILS TO PAY
(I) WHEN DUE OR AS REQUIRED TO BE PAID HEREIN, ANY AMOUNT OF PRINCIPAL OF ANY
LOAN OR (II) WITHIN FIVE BUSINESS DAYS AFTER THE SAME BECOMES DUE, ANY INTEREST
ON ANY LOAN, OR ANY FEE DUE HEREUNDER, OR ANY OTHER AMOUNT PAYABLE HEREUNDER OR
UNDER ANY OTHER LOAN DOCUMENT; OR

 

(B)                                 SPECIFIC COVENANTS.  ANY BORROWER FAILS TO
PERFORM OR OBSERVE ANY TERM, COVENANT OR AGREEMENT CONTAINED IN ANY OF
SECTION 6.03, SECTION 6.05(A) OR ARTICLE VII.  ANY BORROWER FAILS TO PERFORM OR
OBSERVE ANY COVENANT CONTAINED IN SECTION 6.02 (CERTIFICATES; OTHER INFORMATION)
(OTHER THAN THE PROVISO IN THE FIRST SENTENCE OF THE PENULTIMATE PARAGRAPH
THEREOF) OR SECTION 6.12 AND SUCH FAILURE CONTINUES FOR FIVE (5) BUSINESS DAYS
AFTER NOTICE THEREOF FROM THE ADMINISTRATIVE AGENT; OR

 

(C)                                  BORROWING BASE DEFICIENCY.  THERE SHALL
OCCUR AND CONTINUE UNREMEDIED FOR A PERIOD OF FIVE OR MORE BUSINESS DAYS AFTER
DELIVERY OF A BORROWING BASE REPORT DEMONSTRATING SUCH BORROWING BASE DEFICIENCY
PURSUANT TO SECTION 6.02(E); PROVIDED THAT IT SHALL NOT BE AN EVENT OF DEFAULT
HEREUNDER IF THE BORROWERS SHALL PRESENT THE ADMINISTRATIVE AGENT WITH A
REASONABLY FEASIBLE PLAN TO ENABLE SUCH BORROWING BASE DEFICIENCY TO BE CURED
WITHIN 20 BUSINESS DAYS (WHICH 20-BUSINESS DAY PERIOD SHALL INCLUDE THE FIVE
BUSINESS DAYS PERMITTED FOR DELIVERY OF SUCH PLAN), SO LONG AS SUCH BORROWING
BASE DEFICIENCY IS CURED WITHIN SUCH 20-BUSINESS DAY PERIOD;

 

(D)                                 OTHER DEFAULTS.  ANY BORROWER FAILS TO
PERFORM OR OBSERVE ANY OTHER COVENANT OR AGREEMENT (NOT SPECIFIED IN SUBSECTION
(A) OR (B) ABOVE) CONTAINED IN ANY LOAN DOCUMENT ON ITS PART TO BE PERFORMED OR
OBSERVED AND SUCH FAILURE CONTINUES FOR 20 BUSINESS DAYS AFTER NOTICE THEREOF
FROM THE ADMINISTRATIVE AGENT TO THE BORROWERS; OR

 

(E)                                  REPRESENTATIONS AND WARRANTIES.  ANY
REPRESENTATION OR WARRANTY MADE OR DEEMED MADE BY OR ON BEHALF OF ANY BORROWER
IN OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
AMENDMENT OR MODIFICATION HEREOF OR THEREOF OR WAIVER HEREUNDER OR THEREUNDER,
OR IN ANY REPORT, CERTIFICATE, FINANCIAL STATEMENT OR OTHER DOCUMENT FURNISHED
PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY
AMENDMENT OR MODIFICATION HEREOF OR THEREOF OR WAIVER HEREUNDER OR THEREUNDER,
SHALL, AFTER TAKING INTO ACCOUNT ANY MATERIALITY OR OTHER QUALIFICATION
CONTAINED THEREIN, PROVE TO HAVE BEEN INCORRECT WHEN MADE OR DEEMED MADE; OR

 

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(F)                                    CROSS-DEFAULT.  ANY BORROWER (I) FAILS TO
MAKE ANY PAYMENT (WHETHER OF PRINCIPAL OR INTEREST AND REGARDLESS OF AMOUNT) IN
RESPECT OF ANY MATERIAL INDEBTEDNESS, WHEN AND AS THE SAME SHALL BECOME DUE AND
PAYABLE (WITH ALL APPLICABLE GRACE PERIODS HAVING EXPIRED), OR (II) ANY EVENT OR
CONDITION OCCURS THAT RESULTS IN ANY MATERIAL INDEBTEDNESS BECOMING DUE PRIOR TO
ITS SCHEDULED MATURITY (OTHER THAN, WITH RESPECT TO INDEBTEDNESS CONSISTING OF
ANY SWAP CONTRACTS, DUE TO A TERMINATION EVENT OR EQUIVALENT EVENT PURSUANT TO
THE TERMS OF SUCH SWAP CONTRACTS); PROVIDED THAT THIS SECTION 8.01(F)(II) 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; OR

 

(G)                                 INSOLVENCY PROCEEDINGS, ETC.  (I) ANY
BORROWER (A) VOLUNTARILY COMMENCES ANY PROCEEDING OR FILES 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,
(B) CONSENTS TO THE INSTITUTION OF, OR FAILS TO CONTEST IN A TIMELY AND
APPROPRIATE MANNER, ANY PROCEEDING OR PETITION DESCRIBED IN SUB-PART (II) OF
THIS SECTION 8.01(G), (C) APPLIES FOR OR CONSENTS TO THE APPOINTMENT OF A
RECEIVER, TRUSTEE, CUSTODIAN, SEQUESTRATOR, CONSERVATOR OR SIMILAR OFFICIAL FOR
ANY BORROWER OR FOR A SUBSTANTIAL PART OF ITS ASSETS, (D) FILES AN ANSWER
ADMITTING THE MATERIAL ALLEGATIONS OF A PETITION FILED AGAINST IT IN ANY SUCH
PROCEEDING, (E) MAKES A GENERAL ASSIGNMENT FOR THE BENEFIT OF CREDITORS OR
(F) TAKES ANY ACTION FOR THE PURPOSE OF EFFECTING ANY OF THE FOREGOING, OR
(II) AN INVOLUNTARY PROCEEDING IS COMMENCED OR AN INVOLUNTARY PETITION IS FILED
SEEKING (A) LIQUIDATION, REORGANIZATION OR OTHER RELIEF IN RESPECT OF ANY
BORROWER 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 (B) THE APPOINTMENT OF A RECEIVER, TRUSTEE,
CUSTODIAN, SEQUESTRATOR, CONSERVATOR OR SIMILAR OFFICIAL FOR ANY BORROWER 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; OR

 

(H)                                 INABILITY TO PAY DEBTS; ATTACHMENT.  ANY
BORROWER BECOMES UNABLE, ADMITS IN WRITING ITS INABILITY OR FAILS GENERALLY TO
PAY ITS DEBTS AS THEY BECOME DUE; OR

 

(I)                                     JUDGMENTS.  ONE OR MORE JUDGMENTS FOR
THE PAYMENT OF MONEY IN AN AGGREGATE AMOUNT IN EXCESS OF $25,000,000 IS RENDERED
AGAINST ANY BORROWER AND THE SAME SHALL REMAIN UNDISCHARGED FOR A PERIOD OF 30
CONSECUTIVE DAYS DURING WHICH EXECUTION SHALL NOT BE EFFECTIVELY STAYED, OR ANY
ACTION IS LEGALLY TAKEN BY A JUDGMENT CREDITOR TO ATTACH OR LEVY UPON ANY ASSETS
OF ANY BORROWER TO ENFORCE ANY SUCH JUDGMENT; OR

 

(J)                                     ERISA.  AN ERISA EVENT OCCURS 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 A MATERIAL
ADVERSE EFFECT; OR

 

(K)                                  INVALIDITY OF LOAN DOCUMENTS.  ANY LOAN
DOCUMENT SHALL CEASE TO BE VALID AND BINDING ON, OR ENFORCEABLE AGAINST, ANY
BORROWER, OR ANY BORROWER SHALL SO ASSERT IN WRITING; OR

 

(L)                                     CHANGE OF CONTROL.  THERE OCCURS ANY
CHANGE OF CONTROL.

 

8.02                        REMEDIES UPON EVENT OF DEFAULT.  IF ANY EVENT OF
DEFAULT OCCURS AND IS CONTINUING (OTHER THAN AN EVENT WITH RESPECT TO A BORROWER
DESCRIBED IN SECTION 8.01(G)), 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 BORROWERS, TAKE EITHER OR BOTH OF THE FOLLOWING
ACTIONS, AT THE SAME OR DIFFERENT TIMES:

 

(B)                                 TERMINATE THE COMMITMENTS, AND THEREUPON THE
COMMITMENTS SHALL TERMINATE IMMEDIATELY, AND;

 

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(C)                                  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 EACH OF THE BORROWERS;

 

provided, however, that in case of any event with respect to a Borrower
described in Section 8.01(g), the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other Obligations, shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by each of the Borrowers.

 

8.03                        APPLICATION OF FUNDS.  IN THE EVENT THAT, FOLLOWING
THE OCCURRENCE OR DURING THE CONTINUANCE OF ANY EVENT OF DEFAULT, THE
ADMINISTRATIVE AGENT OR ANY LENDER, AS THE CASE MAY BE, RECEIVES ANY MONIES IN
CONNECTION THE EXERCISE OF REMEDIES PROVIDED FOR IN SECTION 8.02 (OR AFTER THE
LOANS HAVE AUTOMATICALLY BECOME IMMEDIATELY DUE AND PAYABLE), SUCH MONIES SHALL
BE DISTRIBUTED FOR APPLICATION AS FOLLOWS:

 

First, to the payment of, or (as the case may be) the reimbursement of, the
Administrative Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Administrative Agent in connection with the collection of such monies by the
Administrative Agent, for the exercise, protection or enforcement by the
Administrative Agent of all or any of the rights, remedies, powers and
privileges of the Administrative Agent under this Agreement or any of the other
Loan Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Administrative Agent against any taxes or liens which
by law shall have, or may have, priority over the rights of the Administrative
Agent to such monies;

 

Second, to all other Obligations in such order or preference as the Required
Lenders may determine; provided, however, that (i) distributions shall be made
(A) pari passu among Obligations with respect to any fees payable to the
Administrative Agent and all other Obligations and (B) with respect to each type
of Obligation owing to the Lenders, such as interest, principal, fees and
expenses, among the Lenders pro rata, and (ii) the Administrative Agent may in
its discretion make proper allowance to take into account any Obligations not
then due and payable;

 

Third, upon payment and satisfaction in full or other provisions for payment in
full satisfactory to the Lenders and the Administrative Agent of all of the
Obligations, to the payment of any obligations required to be paid pursuant to
§9-608(a)(1)(C) or 9-615(a)(3) of the Uniform Commercial Code of the State of
New York;

 

Fourth, the excess, if any, shall be returned to the Borrowers or to such other
Persons as are entitled thereto;

 

ARTICLE IX.
ADMINISTRATIVE AGENT

 

9.01                        APPOINTMENT AND AUTHORITY.  EACH OF THE LENDERS
HEREBY IRREVOCABLY APPOINTS CITIBANK, N.A. TO ACT ON ITS BEHALF AS THE
ADMINISTRATIVE AGENT HEREUNDER AND UNDER THE OTHER LOAN

 

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DOCUMENTS 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 OR THEREOF, TOGETHER WITH SUCH ACTIONS AND POWERS AS ARE
REASONABLY INCIDENTAL THERETO.  THE PROVISIONS OF THIS ARTICLE ARE SOLELY FOR
THE BENEFIT OF THE ADMINISTRATIVE AGENT.  NO LENDER OR BORROWER SHALL HAVE
RIGHTS AS A THIRD PARTY BENEFICIARY OF ANY OF SUCH PROVISIONS.

 

9.02        RIGHTS AS A LENDER.  THE PERSON 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 THE TERM “LENDER” OR “LENDERS” SHALL, UNLESS OTHERWISE
EXPRESSLY INDICATED OR UNLESS THE CONTEXT OTHERWISE REQUIRES, INCLUDE THE PERSON
SERVING AS THE ADMINISTRATIVE AGENT HEREUNDER IN ITS INDIVIDUAL CAPACITY.  SUCH
PERSON AND ITS AFFILIATES MAY ACCEPT DEPOSITS FROM, LEND MONEY TO, ACT AS THE
FINANCIAL ADVISOR OR IN ANY OTHER ADVISORY CAPACITY FOR AND GENERALLY ENGAGE IN
ANY KIND OF BUSINESS WITH THE BORROWERS OR ANY SUBSIDIARY OR OTHER AFFILIATE
THEREOF AS IF SUCH PERSON WERE NOT THE ADMINISTRATIVE AGENT HEREUNDER AND
WITHOUT ANY DUTY TO ACCOUNT THEREFOR TO THE LENDERS.

 

9.03        EXCULPATORY PROVISIONS.  THE ADMINISTRATIVE AGENT SHALL NOT HAVE ANY
DUTIES OR OBLIGATIONS EXCEPT THOSE EXPRESSLY SET FORTH HEREIN AND IN THE OTHER
LOAN DOCUMENTS.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE
ADMINISTRATIVE AGENT:

 

(A)           SHALL NOT BE SUBJECT TO ANY FIDUCIARY OR OTHER IMPLIED DUTIES,
REGARDLESS OF WHETHER A DEFAULT HAS OCCURRED AND IS CONTINUING;

 

(B)           SHALL NOT HAVE ANY DUTY TO TAKE ANY DISCRETIONARY ACTION OR
EXERCISE ANY DISCRETIONARY POWERS, EXCEPT DISCRETIONARY RIGHTS AND POWERS
EXPRESSLY CONTEMPLATED HEREBY OR BY THE OTHER LOAN DOCUMENTS THAT THE
ADMINISTRATIVE AGENT IS REQUIRED TO EXERCISE AS DIRECTED IN WRITING BY THE
REQUIRED LENDERS (OR SUCH OTHER NUMBER OR PERCENTAGE OF THE LENDERS AS SHALL BE
EXPRESSLY PROVIDED FOR HEREIN OR IN THE OTHER LOAN DOCUMENTS), PROVIDED THAT THE
ADMINISTRATIVE AGENT SHALL NOT BE REQUIRED TO TAKE ANY ACTION THAT, IN ITS
OPINION OR THE OPINION OF ITS COUNSEL, MAY EXPOSE THE ADMINISTRATIVE AGENT TO
LIABILITY OR THAT IS CONTRARY TO ANY LOAN DOCUMENT OR APPLICABLE LAW; AND

 

(C)           SHALL NOT, EXCEPT AS EXPRESSLY SET FORTH HEREIN AND IN THE OTHER
LOAN DOCUMENTS, HAVE ANY DUTY TO DISCLOSE, AND SHALL NOT BE LIABLE FOR THE
FAILURE TO DISCLOSE, ANY INFORMATION RELATING TO ANY BORROWER OR ANY OF ITS
AFFILIATES THAT IS COMMUNICATED TO OR OBTAINED BY THE PERSON SERVING AS THE
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 (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) 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 notice
describing such Default is given to the Administrative Agent by any Borrower or
a Lender.

 

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 or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document 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.

 

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9.04        RELIANCE BY ADMINISTRATIVE AGENT.

 

(A)           THE ADMINISTRATIVE AGENT SHALL BE ENTITLED TO RELY UPON, AND SHALL
NOT INCUR ANY LIABILITY FOR RELYING UPON, ANY NOTICE, REQUEST, CERTIFICATE,
CONSENT, STATEMENT, INSTRUMENT, DOCUMENT OR OTHER WRITING (INCLUDING ANY
ELECTRONIC MESSAGE, INTERNET OR INTRANET WEBSITE POSTING OR OTHER DISTRIBUTION)
BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN SIGNED, SENT OR OTHERWISE
AUTHENTICATED 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 HAVE BEEN
MADE BY THE PROPER PERSON, AND SHALL NOT INCUR ANY LIABILITY FOR RELYING
THEREON.  IN DETERMINING COMPLIANCE WITH ANY CONDITION HEREUNDER TO THE MAKING
OF A LOAN, THAT BY ITS TERMS MUST BE FULFILLED TO THE SATISFACTION OF A LENDER
OR THE ADMINISTRATIVE AGENT MAY PRESUME THAT SUCH CONDITION IS SATISFACTORY TO
SUCH LENDER UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED NOTICE TO THE
CONTRARY FROM SUCH LENDER PRIOR TO THE MAKING OF SUCH LOAN.  THE ADMINISTRATIVE
AGENT MAY CONSULT WITH LEGAL COUNSEL (WHO MAY BE COUNSEL FOR ANY BORROWER),
INDEPENDENT ACCOUNTANTS AND OTHER EXPERTS SELECTED BY IT, AND SHALL NOT BE
LIABLE FOR ANY ACTION TAKEN OR NOT TAKEN BY IT IN ACCORDANCE WITH THE ADVICE OF
ANY SUCH COUNSEL, ACCOUNTANTS OR EXPERTS.

 

(B)           FOR PURPOSES OF DETERMINING COMPLIANCE WITH THE CONDITIONS
SPECIFIED IN SECTION 4.01, EACH LENDER THAT HAS SIGNED THIS AGREEMENT SHALL BE
DEEMED TO HAVE CONSENTED TO, APPROVED OR ACCEPTED OR TO BE SATISFIED WITH, EACH
DOCUMENT OR OTHER MATTER REQUIRED THEREUNDER TO BE CONSENTED TO OR APPROVED BY
OR ACCEPTABLE OR SATISFACTORY TO A LENDER UNLESS THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED NOTICE FROM SUCH LENDER PRIOR TO THE PROPOSED CLOSING DATE
SPECIFYING ITS OBJECTION THERETO.

 

9.05        DELEGATION OF DUTIES.  THE ADMINISTRATIVE AGENT MAY PERFORM ANY AND
ALL OF ITS DUTIES AND EXERCISE ITS RIGHTS AND POWERS HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT 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 OF ITS DUTIES AND EXERCISE ITS RIGHTS AND POWERS BY OR
THROUGH THEIR RESPECTIVE RELATED PARTIES.  THE EXCULPATORY PROVISIONS OF THIS
ARTICLE 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.

 

9.06        RESIGNATION OF ADMINISTRATIVE AGENT.  THE ADMINISTRATIVE AGENT MAY
AT ANY TIME GIVE NOTICE OF ITS RESIGNATION TO THE LENDERS AND THE BORROWERS. 
UPON RECEIPT OF ANY SUCH NOTICE OF RESIGNATION, THE REQUIRED LENDERS SHALL HAVE
THE RIGHT, IN CONSULTATION WITH THE BORROWERS, TO APPOINT A SUCCESSOR, WHICH
SHALL BE A BANK WITH AN OFFICE IN THE UNITED STATES, OR AN AFFILIATE OF ANY SUCH
BANK WITH AN OFFICE IN THE UNITED STATES.  IF NO SUCH 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, APPOINT A SUCCESSOR ADMINISTRATIVE AGENT MEETING THE QUALIFICATIONS SET
FORTH ABOVE; PROVIDED THAT IF THE ADMINISTRATIVE AGENT SHALL NOTIFY THE
BORROWERS AND THE LENDERS THAT NO QUALIFYING PERSON HAS ACCEPTED SUCH
APPOINTMENT, THEN SUCH RESIGNATION SHALL NONETHELESS BECOME EFFECTIVE IN
ACCORDANCE WITH SUCH NOTICE AND (1) THE RETIRING ADMINISTRATIVE AGENT SHALL BE
DISCHARGED FROM ITS DUTIES AND OBLIGATIONS HEREUNDER AND UNDER THE OTHER LOAN
DOCUMENTS (EXCEPT THAT IN THE CASE OF ANY COLLATERAL SECURITY HELD BY THE
ADMINISTRATIVE AGENT ON BEHALF OF THE LENDERS UNDER ANY OF THE LOAN DOCUMENTS,
THE RETIRING ADMINISTRATIVE AGENT SHALL CONTINUE TO HOLD SUCH COLLATERAL
SECURITY UNTIL SUCH TIME AS A SUCCESSOR ADMINISTRATIVE AGENT IS APPOINTED) AND
(2) ALL PAYMENTS, COMMUNICATIONS AND DETERMINATIONS PROVIDED TO BE MADE BY, TO
OR THROUGH THE ADMINISTRATIVE AGENT SHALL INSTEAD BE MADE BY OR TO EACH LENDER
DIRECTLY, UNTIL SUCH TIME AS THE REQUIRED LENDERS APPOINT A SUCCESSOR
ADMINISTRATIVE AGENT AS PROVIDED FOR ABOVE

 

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IN THIS SECTION.  UPON THE ACCEPTANCE OF A SUCCESSOR’S APPOINTMENT AS
ADMINISTRATIVE AGENT HEREUNDER, SUCH SUCCESSOR SHALL SUCCEED TO AND BECOME
VESTED WITH ALL OF THE RIGHTS, POWERS, PRIVILEGES AND DUTIES OF THE RETIRING (OR
RETIRED) ADMINISTRATIVE AGENT, AND THE RETIRING ADMINISTRATIVE AGENT SHALL BE
DISCHARGED FROM ALL OF ITS DUTIES AND OBLIGATIONS HEREUNDER OR UNDER THE OTHER
LOAN DOCUMENTS (IF NOT ALREADY DISCHARGED THEREFROM AS PROVIDED ABOVE IN THIS
SECTION).  THE FEES PAYABLE BY THE BORROWERS TO A SUCCESSOR ADMINISTRATIVE AGENT
SHALL BE THE SAME AS THOSE PAYABLE TO ITS PREDECESSOR UNLESS OTHERWISE AGREED
BETWEEN THE BORROWERS AND SUCH SUCCESSOR.  AFTER THE RETIRING ADMINISTRATIVE
AGENT’S RESIGNATION HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS, THE PROVISIONS
OF THIS ARTICLE AND SECTION 10.04 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 THE RETIRING ADMINISTRATIVE AGENT WAS ACTING AS ADMINISTRATIVE AGENT.

 

Any resignation by Citibank, N.A. as Administrative Agent pursuant to this
Section shall also constitute its resignation as Swingline Lender.  Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder,
(a) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Swingline Lender and (b) the
retiring Swingline Lender shall be discharged from all of their respective
duties and obligations hereunder or under the other Loan Documents.

 

In addition to the foregoing, if a Lender becomes, and during the period it
remains, a Defaulting Lender or a Potential Defaulting Lender, the Issuing Bank
and/or the Swingline Lender may, upon prior written notice to the Borrowers and
the Administrative Agent, resign as Issuing Bank or Swingline Lender,
respectively, effective at the close of business New York time on a date
specified in such notice (which date may not be less than 20 Business Days after
the date of such notice); provided that such resignation by the Issuing Bank
will have no effect on the validity or enforceability of any Letter of Credit
then outstanding or on the obligations of the Borrowers or any Lender under this
Agreement with respect to any such outstanding Letter of Credit or otherwise to
the Issuing Bank; and provided, further, that such resignation by the Swingline
Lender will have no effect on its rights in respect of any outstanding Swingline
Loans or on the obligations of the Borrowers or any Lender under this Agreement
with respect to any such outstanding Swingline Loan.

 

9.07        NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.  EACH LENDER
ACKNOWLEDGES THAT IT HAS, INDEPENDENTLY AND WITHOUT RELIANCE UPON THE
ADMINISTRATIVE AGENT OR ANY OTHER LENDER OR ANY OF THEIR RELATED PARTIES 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 OR ANY OF THEIR RELATED PARTIES 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 OTHER LOAN DOCUMENT OR ANY RELATED
AGREEMENT OR ANY DOCUMENT FURNISHED HEREUNDER OR THEREUNDER.

 

9.08        NO OTHER DUTIES, ETC.  ANYTHING HEREIN TO THE CONTRARY
NOTWITHSTANDING, THE SYNDICATION AGENTS AND THE ARRANGER LISTED ON THE COVER
PAGE HEREOF SHALL NOT HAVE ANY POWERS, DUTIES OR RESPONSIBILITIES UNDER THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, EXCEPT IN ITS CAPACITY, AS
APPLICABLE, AS THE ADMINISTRATIVE AGENT OR A LENDER HEREUNDER.

 

9.09        ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.  IN CASE OF THE
PENDENCY OF ANY PROCEEDING UNDER ANY DEBTOR RELIEF LAW OR ANY OTHER JUDICIAL
PROCEEDING RELATIVE TO ANY BORROWER, THE ADMINISTRATIVE AGENT (IRRESPECTIVE OF
WHETHER THE PRINCIPAL OF ANY LOAN SHALL THEN BE DUE AND PAYABLE AS HEREIN
EXPRESSED OR BY DECLARATION OR OTHERWISE AND IRRESPECTIVE OF WHETHER THE
ADMINISTRATIVE AGENT SHALL HAVE MADE ANY DEMAND ON THE BORROWERS) SHALL BE
ENTITLED AND EMPOWERED, BY INTERVENTION IN SUCH PROCEEDING OR OTHERWISE

 

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(B)           TO FILE AND PROVE A CLAIM FOR THE WHOLE AMOUNT OF THE PRINCIPAL
AND INTEREST OWING AND UNPAID IN RESPECT OF THE LOANS AND ALL OTHER OBLIGATIONS
THAT ARE OWING AND UNPAID AND TO FILE SUCH OTHER DOCUMENTS AS MAY BE NECESSARY
OR ADVISABLE IN ORDER TO HAVE THE CLAIMS OF THE LENDERS AND THE ADMINISTRATIVE
AGENT (INCLUDING ANY CLAIM FOR THE REASONABLE COMPENSATION, EXPENSES,
DISBURSEMENTS AND ADVANCES OF THE LENDERS AND THE ADMINISTRATIVE AGENT AND THEIR
RESPECTIVE AGENTS AND COUNSEL AND ALL OTHER AMOUNTS DUE THE LENDERS AND THE
ADMINISTRATIVE AGENT UNDER SECTIONS 2.09 AND 10.05) ALLOWED IN SUCH JUDICIAL
PROCEEDING; AND

 

(C)           TO COLLECT AND RECEIVE ANY MONIES OR OTHER PROPERTY PAYABLE OR
DELIVERABLE ON ANY SUCH CLAIMS AND TO DISTRIBUTE THE SAME;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender to authorize the Administrative Agent to
vote in respect of the claim of any Lender in any such proceeding.

 

9.10        COLLATERAL MATTERS.  THE LENDERS IRREVOCABLY AUTHORIZE THE
ADMINISTRATIVE AGENT, AT ITS OPTION AND IN ITS DISCRETION, TO RELEASE ANY LIEN
ON ANY PROPERTY GRANTED TO OR HELD BY THE ADMINISTRATIVE AGENT UNDER ANY LOAN
DOCUMENT (I) UPON TERMINATION OF THE AGGREGATE COMMITMENTS AND PAYMENT IN FULL
OF ALL OBLIGATIONS (OTHER THAN CONTINGENT INDEMNIFICATION OBLIGATIONS),
(II) THAT IS SOLD OR TO BE SOLD AS PART OF OR IN CONNECTION WITH ANY SALE
PERMITTED HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT OR WHERE THE BORROWERS ARE
PERMITTED TO OBTAIN SUCH RELEASE PURSUANT TO THE TERMS OF THE SECURITY
DOCUMENTS, OR (III) SUBJECT TO SECTION 10.01, IF APPROVED, AUTHORIZED OR
RATIFIED IN WRITING BY THE REQUIRED LENDERS.

 

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property.

 

ARTICLE X.
MISCELLANEOUS

 

10.01      AMENDMENTS, ETC.  NO AMENDMENT OR WAIVER OF ANY PROVISION OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND NO CONSENT TO ANY DEPARTURE BY ANY
BORROWER THEREFROM, SHALL BE EFFECTIVE UNLESS IN WRITING SIGNED BY THE REQUIRED
LENDERS AND APPLICABLE BORROWER, AS THE CASE MAY BE, AND ACKNOWLEDGED BY THE
ADMINISTRATIVE AGENT, AND EACH SUCH WAIVER OR CONSENT SHALL BE EFFECTIVE ONLY IN
THE SPECIFIC INSTANCE AND FOR THE SPECIFIC PURPOSE FOR WHICH GIVEN; PROVIDED,
HOWEVER, THAT NO SUCH AMENDMENT, WAIVER OR CONSENT SHALL:

 

(A)           WAIVE ANY CONDITION SET FORTH IN SECTION 4.01 WITHOUT THE WRITTEN
CONSENT OF EACH LENDER;

 

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(B)           EXTEND OR INCREASE THE COMMITMENT OF ANY LENDER (OR REINSTATE ANY
COMMITMENT TERMINATED PURSUANT TO SECTION 8.02) WITHOUT THE WRITTEN CONSENT OF
SUCH LENDER;

 

(C)           POSTPONE ANY DATE FIXED BY THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT FOR ANY PAYMENT OR MANDATORY PREPAYMENT OF PRINCIPAL, INTEREST, FEES OR
OTHER AMOUNTS DUE TO THE LENDERS (OR ANY OF THEM) HEREUNDER OR UNDER ANY OTHER
LOAN DOCUMENT WITHOUT THE WRITTEN CONSENT OF EACH LENDER DIRECTLY AFFECTED
THEREBY;

 

(D)           REDUCE THE PRINCIPAL OF, OR THE RATE OF INTEREST SPECIFIED HEREIN
ON, ANY LOAN OR (SUBJECT TO CLAUSE (III) OF THE SECOND PROVISO TO THIS
SECTION 10.01) ANY FEES OR OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER ANY OTHER
LOAN DOCUMENT WITHOUT THE WRITTEN CONSENT OF EACH LENDER DIRECTLY AFFECTED
THEREBY; PROVIDED, HOWEVER, THAT ONLY THE CONSENT OF THE REQUIRED LENDERS SHALL
BE NECESSARY (I) TO AMEND THE DEFINITION OF “DEFAULT RATE” OR TO WAIVE ANY
OBLIGATION OF THE BORROWERS TO PAY INTEREST AT THE DEFAULT RATE OR (II) TO AMEND
ANY FINANCIAL COVENANTS HEREUNDER (OR ANY DEFINED TERM USED THEREIN);

 

(E)           CHANGE ANY COMPONENTS OF THE DEFINITIONS OF ELIGIBLE SPECIFIED
FINANCIAL ASSET OR SPECIFIED PERCENTAGE, WITHOUT THE WRITTEN CONSENT OF THE
REQUIRED LENDERS; PROVIDED THAT (I) THE ADDITION OF ANY NEW TYPE OF SPECIFIED
FINANCIAL ASSET AND (II) ANY INCREASE IN ANY SPECIFIED PERCENTAGE SHALL REQUIRE
THE WRITTEN CONSENT OF EACH LENDER;

 

(F)            CHANGE SECTION 2.13 OR SECTION 8.03 IN A MANNER THAT WOULD ALTER
THE PRO RATA SHARING OF PAYMENTS REQUIRED THEREBY , OR CHANGE ANY PROVISION
RELATING TO THE PRO RATA DISBURSEMENT OF FUNDS TO THE LENDERS, IN EACH CASE,
WITHOUT THE WRITTEN CONSENT OF EACH LENDER;

 

(G)           CHANGE ANY PROVISION OF THIS SECTION OR THE DEFINITION OF
“REQUIRED LENDERS” OR ANY OTHER PROVISION HEREOF SPECIFYING THE NUMBER OR
PERCENTAGE OF LENDERS REQUIRED TO AMEND, WAIVE OR OTHERWISE MODIFY ANY RIGHTS
HEREUNDER OR MAKE ANY DETERMINATION OR GRANT ANY CONSENT HEREUNDER WITHOUT THE
WRITTEN CONSENT OF EACH LENDER;

 

(H)           AMEND, MODIFY OR WAIVE THE PROVISIONS OF SECTION 2.04(C)  WITHOUT
THE WRITTEN CONSENT OF EACH LENDER; OR

 

(I)            RELEASE ALL OR SUBSTANTIALLY ALL OF THE COLLATERAL AND TERMINATE
THE SECURITY AGREEMENT WITHOUT THE WRITTEN CONSENT OF EACH LENDER.

 

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Swingline Lender in addition to the Lenders required
above, affect the rights or duties of the Swingline Lender under this Agreement,
(ii) no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document and (iii) the consent of Lenders holding not less than two-thirds
of the Revolving Credit Exposure and unused Commitments will be required for any
adverse change affecting the provisions of this Agreement relating to the
calculation of the Borrowing Base (including the definitions set forth in
Section 6.16(b)) unless otherwise expressly provided herein.

 

Anything herein to the contrary notwithstanding, during such period as a Lender
is a Defaulting Lender, to the fullest extent permitted by applicable law, such
Lender will not be entitled to vote in respect of amendments and waivers
hereunder and the Commitment and the outstanding Loans or other extensions of
credit of such Lender hereunder will not be taken into account in determining
whether the Requisite Lenders or all of the Lenders, as required, have approved
any such amendment or waiver (and the definition of “Requisite Lenders” will
automatically be deemed modified accordingly for the duration

 

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of such period); provided, that any such amendment or waiver that would increase
or extend the term of the Commitment of such Defaulting Lender, extend the date
fixed for the payment of principal or interest owing to such Defaulting Lender
hereunder, reduce the principal amount of any obligation owing to such
Defaulting Lender, reduce the amount of or the rate or amount of interest on any
amount owing to such Defaulting Lender or of any fee payable to such Defaulting
Lender hereunder, or alter the terms of this proviso, will require the consent
of such Defaulting Lender.

 

10.02      NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.

 

(A)           NOTICES GENERALLY.  EXCEPT IN THE CASE OF NOTICES AND OTHER
COMMUNICATIONS EXPRESSLY PERMITTED TO BE GIVEN BY TELEPHONE (AND EXCEPT AS
PROVIDED IN SUBSECTION (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 TELECOPIER AS
FOLLOWS, AND ALL NOTICES AND OTHER COMMUNICATIONS EXPRESSLY PERMITTED HEREUNDER
TO BE GIVEN BY TELEPHONE SHALL BE MADE TO THE APPLICABLE TELEPHONE NUMBER, AS
FOLLOWS:

 

(I)            IF TO THE BORROWERS, THE ADMINISTRATIVE AGENT OR THE SWINGLINE
LENDER, TO THE ADDRESS, TELECOPIER NUMBER, ELECTRONIC MAIL ADDRESS OR TELEPHONE
NUMBER SPECIFIED FOR SUCH PERSON ON SCHEDULE 10.02; AND

 

(II)           IF TO ANY OTHER LENDER, TO THE ADDRESS, TELECOPIER NUMBER,
ELECTRONIC MAIL ADDRESS OR TELEPHONE NUMBER SPECIFIED IN ITS ADMINISTRATIVE
QUESTIONNAIRE.

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

 

(B)           ELECTRONIC COMMUNICATIONS.  NOTICES AND OTHER COMMUNICATIONS TO
THE LENDERS MAY BE DELIVERED OR FURNISHED BY ELECTRONIC COMMUNICATION (INCLUDING
E-MAIL AND INTERNET OR INTRANET WEBSITES) PURSUANT TO PROCEDURES APPROVED BY THE
ADMINISTRATIVE AGENT, PROVIDED THAT THE FOREGOING SHALL NOT APPLY TO SERVICE OF
PROCESS NOTICES PURSUANT TO SECTION 10.14, NOTICES THAT ARE PROHIBITED FROM
BEING SO DELIVERED UNDER APPLICABLE LAW, AND NOTICES TO ANY LENDER PURSUANT TO
ARTICLE II IF SUCH LENDER, AS APPLICABLE, HAS NOTIFIED THE ADMINISTRATIVE AGENT
THAT IT IS INCAPABLE OF RECEIVING NOTICES UNDER SUCH ARTICLE BY ELECTRONIC
COMMUNICATION.  THE ADMINISTRATIVE AGENT OR ANY BORROWER 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.

 

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

 

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(C)           THE PLATFORM.  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR
COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER
MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE
DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR
THE PLATFORM.  IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED
PARTIES (EACH AN “AGENT PARTY”, OR COLLECTIVELY, THE “AGENT PARTIES”) HAVE ANY
LIABILITY TO THE BORROWERS, ANY LENDER OR ANY OTHER PERSON FOR LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR EXPENSES OF ANY KIND (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF THE BORROWERS’ OR THE ADMINISTRATIVE AGENT’S
TRANSMISSION OF BORROWER MATERIALS THROUGH THE INTERNET, EXCEPT TO THE EXTENT
THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES ARE DETERMINED BY A
COURT OF COMPETENT JURISDICTION BY A FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH AGENT PARTY;
PROVIDED, HOWEVER, THAT IN NO EVENT SHALL ANY AGENT PARTY HAVE ANY LIABILITY TO
THE BORROWERS, ANY LENDER OR ANY OTHER PERSON FOR INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES).

 

(D)           CHANGE OF ADDRESS, ETC.  EACH OF THE BORROWERS, THE ADMINISTRATIVE
AGENT AND THE SWINGLINE LENDER MAY CHANGE ITS ADDRESS, TELECOPIER OR TELEPHONE
NUMBER FOR NOTICES AND OTHER COMMUNICATIONS HEREUNDER BY NOTICE TO THE OTHER
PARTIES HERETO.  EACH OTHER LENDER MAY CHANGE ITS ADDRESS, TELECOPIER OR
TELEPHONE NUMBER FOR NOTICES AND OTHER COMMUNICATIONS HEREUNDER BY NOTICE TO THE
BORROWERS, THE ADMINISTRATIVE AGENT AND THE SWINGLINE LENDER.  IN ADDITION, EACH
LENDER AGREES TO NOTIFY THE ADMINISTRATIVE AGENT FROM TIME TO TIME TO ENSURE
THAT THE ADMINISTRATIVE AGENT HAS ON RECORD (I) AN EFFECTIVE ADDRESS, CONTACT
NAME, TELEPHONE NUMBER, TELECOPIER NUMBER AND ELECTRONIC MAIL ADDRESS TO WHICH
NOTICES AND OTHER COMMUNICATIONS MAY BE SENT AND (II) ACCURATE WIRE INSTRUCTIONS
FOR SUCH LENDER.

 

(E)           RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS.  THE ADMINISTRATIVE
AGENT AND THE LENDERS SHALL BE ENTITLED TO RELY AND ACT UPON ANY NOTICES
(INCLUDING TELEPHONIC REVOLVING LOAN NOTICES AND SWINGLINE LOAN NOTICES)
PURPORTEDLY GIVEN BY OR ON BEHALF OF THE BORROWERS EVEN IF (I) SUCH NOTICES WERE
NOT MADE IN A MANNER SPECIFIED HEREIN, WERE INCOMPLETE OR WERE NOT PRECEDED OR
FOLLOWED BY ANY OTHER FORM OF NOTICE SPECIFIED HEREIN, OR (II) THE TERMS
THEREOF, AS UNDERSTOOD BY THE RECIPIENT, VARIED FROM ANY CONFIRMATION THEREOF. 
THE BORROWERS SHALL JOINTLY AND SEVERALLY INDEMNIFY THE ADMINISTRATIVE AGENT,
EACH LENDER AND THE RELATED PARTIES OF EACH OF THEM FROM ALL LOSSES, COSTS,
EXPENSES AND LIABILITIES RESULTING FROM THE RELIANCE BY SUCH PERSON ON EACH
NOTICE PURPORTEDLY GIVEN BY OR ON BEHALF OF THE BORROWERS.  ALL TELEPHONIC
NOTICES TO AND OTHER TELEPHONIC COMMUNICATIONS WITH THE ADMINISTRATIVE AGENT MAY
BE RECORDED BY THE ADMINISTRATIVE AGENT, AND EACH OF THE PARTIES HERETO HEREBY
CONSENTS TO SUCH RECORDING.

 

10.03      NO WAIVER; CUMULATIVE REMEDIES.  NO FAILURE BY ANY LENDER OR THE
ADMINISTRATIVE AGENT TO EXERCISE, AND NO DELAY BY ANY SUCH PERSON IN EXERCISING,
ANY RIGHT, REMEDY, POWER OR PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER
THEREOF; NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY RIGHT, REMEDY, POWER OR
PRIVILEGE HEREUNDER PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE
EXERCISE OF ANY OTHER RIGHT, REMEDY, POWER OR PRIVILEGE.  THE RIGHTS, REMEDIES,
POWERS AND PRIVILEGES HEREIN PROVIDED ARE CUMULATIVE AND NOT EXCLUSIVE OF ANY
RIGHTS, REMEDIES, POWERS AND PRIVILEGES PROVIDED BY LAW.

 

10.04      EXPENSES; INDEMNITY; DAMAGE WAIVER.

 

(A)           COSTS AND EXPENSES.  THE BORROWERS SHALL PAY (I) ALL REASONABLE
AND DOCUMENTED OUT-OF-POCKET EXPENSES INCURRED BY THE ADMINISTRATIVE AGENT AND
ITS AFFILIATES (INCLUDING THE REASONABLE FEES,

 

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CHARGES AND DISBURSEMENTS OF COUNSEL FOR THE ADMINISTRATIVE AGENT), IN
CONNECTION WITH THE SYNDICATION OF THE CREDIT FACILITIES PROVIDED FOR HEREIN,
THE PREPARATION, NEGOTIATION, EXECUTION, DELIVERY AND ADMINISTRATION OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS OR ANY AMENDMENTS, MODIFICATIONS OR
WAIVERS OF THE PROVISIONS HEREOF OR THEREOF (WHETHER OR NOT THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY SHALL BE CONSUMMATED), (II) ALL COSTS, EXPENSES,
TAXES, ASSESSMENTS AND OTHER CHARGES INCURRED IN CONNECTION WITH ANY FILING,
REGISTRATION, RECORDING OR PERFECTION OF ANY SECURITY INTEREST CONTEMPLATED BY
ANY SECURITY DOCUMENT (OR OTHER DOCUMENT REFERENCED THEREIN) AND (III) ALL
OUT-OF-POCKET EXPENSES INCURRED BY THE ADMINISTRATIVE AGENT OR ANY LENDER
(INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR THE
ADMINISTRATIVE AGENT AND ANY LENDER), IN CONNECTION WITH THE ENFORCEMENT OR
PROTECTION OF ITS RIGHTS (A) IN CONNECTION WITH THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, INCLUDING ITS RIGHTS UNDER THIS SECTION, OR (B) IN CONNECTION
WITH THE LOANS MADE HEREUNDER, INCLUDING ALL SUCH OUT-OF-POCKET EXPENSES
INCURRED DURING ANY WORKOUT, RESTRUCTURING OR NEGOTIATIONS IN RESPECT OF SUCH
LOANS.

 

(B)           INDEMNIFICATION BY THE BORROWERS.  THE BORROWERS SHALL INDEMNIFY
THE ADMINISTRATIVE AGENT (AND ANY SUB-AGENT THEREOF), 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), AND SHALL
INDEMNIFY AND HOLD HARMLESS EACH INDEMNITEE FROM ALL FEES AND TIME CHARGES AND
DISBURSEMENTS FOR ATTORNEYS WHO MAY BE EMPLOYEES OF ANY INDEMNITEE, INCURRED BY
ANY INDEMNITEE OR ASSERTED AGAINST ANY INDEMNITEE BY ANY THIRD PARTY OR BY ANY
OF THE BORROWERS ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (I) THE
EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE
PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER, THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR, IN THE CASE
OF THE ADMINISTRATIVE AGENT (AND ANY SUB-AGENT THEREOF) AND ITS RELATED PARTIES
ONLY, THE ADMINISTRATION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
(II) ANY LOAN OR THE USE OR PROPOSED USE OF THE PROCEEDS THEREFROM, (III) ANY
ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY
PROPERTY OWNED OR OPERATED BY ANY OF THE BORROWERS OR ANY OF THEIR SUBSIDIARIES,
OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO SUCH BORROWER OR ANY SUCH
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, WHETHER BROUGHT BY A THIRD PARTY OR BY ANY OF THE
BORROWERS, AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, IN ALL
CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE
COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE; PROVIDED THAT
SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT
SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES (X) 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 OR
(Y) RESULT FROM A CLAIM BROUGHT BY ANY OF THE BORROWERS AGAINST AN INDEMNITEE
FOR BREACH IN BAD FAITH OF SUCH INDEMNITEE’S OBLIGATIONS HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT, IF ANY BORROWER HAS OBTAINED A FINAL AND NONAPPEALABLE
JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION.  UNLESS AN EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING,
THE BORROWERS SHALL BE ENTITLED TO ASSUME THE DEFENSE OF ANY ACTION FOR WHICH
INDEMNIFICATION IS SOUGHT HEREUNDER WITH COUNSEL OF ITS CHOICE AT ITS EXPENSE
(IN WHICH CASE THE BORROWERS SHALL NOT THEREAFTER BE RESPONSIBLE FOR THE FEES
AND EXPENSES OF ANY SEPARATE COUNSEL RETAINED BY AN INDEMNITEE EXCEPT AS SET
FORTH BELOW); PROVIDED, HOWEVER, THAT SUCH COUNSEL SHALL BE REASONABLY
SATISFACTORY TO EACH SUCH INDEMNITEE.  NOTWITHSTANDING THE BORROWERS’ ELECTION
TO ASSUME THE DEFENSE OF SUCH ACTION, EACH INDEMNITEE SHALL HAVE THE RIGHT TO
EMPLOY SEPARATE COUNSEL AND TO PARTICIPATE IN THE DEFENSE OF SUCH ACTION, AND
THE BORROWERS SHALL BEAR THE REASONABLE FEES, COSTS AND EXPENSES OF SUCH
SEPARATE COUNSEL IF (I) THE USE OF COUNSEL CHOSEN BY THE BORROWERS TO REPRESENT
SUCH INDEMNITEE WOULD PRESENT SUCH COUNSEL WITH A CONFLICT OF INTEREST; (II) THE
ACTUAL OR POTENTIAL DEFENDANTS IN, OR TARGETS OF, ANY SUCH ACTION INCLUDE THE
BORROWERS AND SUCH INDEMNITEE AND SUCH INDEMNITEE SHALL HAVE REASONABLY
CONCLUDED THAT THERE MAY BE LEGAL DEFENSES AVAILABLE TO IT THAT ARE DIFFERENT
FROM OR ADDITIONAL TO THOSE AVAILABLE TO THE BORROWERS; (III) THE BORROWERS
SHALL NOT HAVE

 

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EMPLOYED COUNSEL REASONABLY SATISFACTORY TO SUCH INDEMNITEE TO REPRESENT IT
WITHIN A REASONABLE TIME AFTER NOTICE OF THE INSTITUTION OF SUCH ACTION; OR
(IV) THE BORROWERS SHALL AUTHORIZE SUCH INDEMNITEE TO EMPLOY SEPARATE COUNSEL AT
THE BORROWERS’ EXPENSE.  THE BORROWERS WILL NOT BE LIABLE UNDER THIS AGREEMENT
FOR ANY AMOUNT PAID BY AN INDEMNITEE TO SETTLE ANY CLAIMS OR ACTIONS IF THE
SETTLEMENT IS ENTERED INTO WITHOUT THE BORROWERS’ CONSENT, WHICH CONSENT MAY NOT
BE UNREASONABLY WITHHELD OR DELAYED.

 

(C)           REIMBURSEMENT BY LENDERS.  TO THE EXTENT THAT ANY BORROWER FOR ANY
REASON FAILS TO INDEFEASIBLY PAY ANY AMOUNT REQUIRED UNDER SUBSECTION (A) OR
(B) OF THIS SECTION TO BE PAID BY IT TO THE ADMINISTRATIVE AGENT (OR ANY
SUB-AGENT THEREOF) OR ANY RELATED PARTY OF ANY OF THE FOREGOING, EACH LENDER
SEVERALLY AGREES TO PAY TO THE ADMINISTRATIVE AGENT (OR ANY SUCH SUB-AGENT) OR
SUCH RELATED PARTY, 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, CLAIM, DAMAGE, LIABILITY OR RELATED EXPENSE, AS THE CASE
MAY BE, WAS INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT (OR ANY
SUCH SUB-AGENT) IN ITS CAPACITY AS SUCH, OR AGAINST ANY RELATED PARTY OF ANY OF
THE FOREGOING ACTING FOR THE ADMINISTRATIVE AGENT (OR ANY SUCH SUB-AGENT) IN
CONNECTION WITH SUCH CAPACITY. THE OBLIGATIONS OF THE LENDERS UNDER THIS
SUBSECTION (C) ARE SUBJECT TO THE PROVISIONS OF SECTION 2.12(D).

 

(D)           WAIVER OF CONSEQUENTIAL DAMAGES, ETC.  TO THE FULLEST 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,
ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, ANY LOAN OR THE USE OF THE PROCEEDS
THEREOF.  NO INDEMNITEE REFERRED TO IN SUBSECTION (B) ABOVE SHALL BE LIABLE FOR
ANY DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR
OTHER MATERIALS DISTRIBUTED TO SUCH UNINTENDED RECIPIENTS BY SUCH INDEMNITEE
THROUGH TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS
IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OTHER THAN FOR DIRECT OR ACTUAL
DAMAGES RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
INDEMNITEE AS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT OF
COMPETENT JURISDICTION.

 

(E)           PAYMENTS.  ALL AMOUNTS DUE UNDER THIS SECTION SHALL BE PAYABLE NOT
LATER THAN TEN (10) BUSINESS DAYS AFTER DEMAND THEREFOR.

 

(F)            SURVIVAL.  THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE
RESIGNATION OF THE ADMINISTRATIVE AGENT AND THE SWINGLINE LENDER, THE
REPLACEMENT OF ANY LENDER, THE TERMINATION OF THE AGGREGATE COMMITMENTS AND THE
REPAYMENT, SATISFACTION OR DISCHARGE OF ALL THE OTHER OBLIGATIONS.

 

10.05      PAYMENTS SET ASIDE.  TO THE EXTENT THAT ANY PAYMENT BY OR ON BEHALF
OF THE BORROWERS IS MADE TO THE ADMINISTRATIVE AGENT OR ANY LENDER, OR THE
ADMINISTRATIVE AGENT OR ANY LENDER EXERCISES ITS RIGHT OF SETOFF, AND SUCH
PAYMENT OR THE PROCEEDS OF SUCH SETOFF OR ANY PART THEREOF IS SUBSEQUENTLY
INVALIDATED, DECLARED TO BE FRAUDULENT OR PREFERENTIAL, SET ASIDE OR REQUIRED
(INCLUDING PURSUANT TO ANY SETTLEMENT ENTERED INTO BY THE ADMINISTRATIVE AGENT
OR SUCH LENDER IN ITS DISCRETION) TO BE REPAID TO A TRUSTEE, RECEIVER OR ANY
OTHER PARTY, IN CONNECTION WITH ANY PROCEEDING UNDER ANY DEBTOR RELIEF LAW OR
OTHERWISE, THEN (A) TO THE EXTENT OF SUCH RECOVERY, THE OBLIGATION OR PART
THEREOF ORIGINALLY INTENDED TO BE SATISFIED SHALL BE REVIVED AND CONTINUED IN
FULL FORCE AND EFFECT AS IF SUCH PAYMENT HAD NOT BEEN MADE OR SUCH SETOFF HAD
NOT OCCURRED, AND (B) EACH LENDER SEVERALLY AGREES TO PAY TO THE ADMINISTRATIVE
AGENT UPON DEMAND ITS APPLICABLE SHARE (WITHOUT DUPLICATION) OF ANY AMOUNT SO
RECOVERED FROM OR REPAID BY THE ADMINISTRATIVE AGENT, PLUS INTEREST THEREON FROM
THE DATE OF SUCH DEMAND TO THE DATE SUCH PAYMENT IS MADE AT A RATE PER ANNUM
EQUAL TO THE FEDERAL FUNDS RATE FROM TIME TO TIME IN EFFECT.  THE OBLIGATIONS OF
THE LENDERS UNDER CLAUSE (B) OF THE PRECEDING SENTENCE SHALL SURVIVE THE PAYMENT
IN FULL OF THE OBLIGATIONS AND THE TERMINATION OF THIS AGREEMENT.

 

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10.06      SUCCESSORS AND ASSIGNS.

 

(A)           SUCCESSORS AND ASSIGNS GENERALLY.  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, EXCEPT THAT THE
BORROWERS MAY NOT ASSIGN OR OTHERWISE TRANSFER ANY OF ITS RIGHTS OR OBLIGATIONS
HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT AND EACH
LENDER AND NO LENDER MAY ASSIGN OR OTHERWISE TRANSFER ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER EXCEPT (I) TO AN ASSIGNEE IN ACCORDANCE WITH THE
PROVISIONS OF PARAGRAPH (B) OF THIS SECTION, (II) BY WAY OF PARTICIPATION IN
ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (D) OF THIS SECTION OR (III) BY WAY
OF PLEDGE OR ASSIGNMENT OF A SECURITY INTEREST SUBJECT TO THE RESTRICTIONS OF
PARAGRAPH (F) OF THIS SECTION (AND ANY OTHER ATTEMPTED ASSIGNMENT OR TRANSFER BY
ANY PARTY HERETO SHALL BE NULL AND VOID).  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, PARTICIPANTS
TO THE EXTENT PROVIDED IN PARAGRAPH (D) OF THIS SECTION AND, TO THE EXTENT
EXPRESSLY CONTEMPLATED HEREBY, THE RELATED PARTIES OF EACH OF THE ADMINISTRATIVE
AGENT AND THE LENDERS) ANY LEGAL OR EQUITABLE RIGHT, REMEDY OR CLAIM UNDER OR BY
REASON OF THIS AGREEMENT.

 

(B)           ASSIGNMENTS BY LENDERS.  ANY LENDER MAY AT ANY TIME ASSIGN TO ONE
OR MORE ELIGIBLE ASSIGNEES ALL OR A PORTION OF ITS RIGHTS AND OBLIGATIONS UNDER
THIS AGREEMENT (INCLUDING ALL OR A PORTION OF ITS COMMITMENT AND THE LOANS
(INCLUDING FOR PURPOSES OF THIS SUBSECTION (B), PARTICIPATIONS IN SWINGLINE
LOANS) AT THE TIME OWING TO IT); PROVIDED THAT ANY SUCH ASSIGNMENT SHALL BE
SUBJECT TO THE FOLLOWING CONDITIONS:

 

(I)            MINIMUM AMOUNTS.

 

(A)          IN THE CASE OF AN ASSIGNMENT OF THE ENTIRE REMAINING AMOUNT OF THE
ASSIGNING LENDER’S COMMITMENT AND THE LOANS AT THE TIME OWING TO IT OR IN THE
CASE OF AN ASSIGNMENT TO A LENDER, AN AFFILIATE OF A LENDER OR AN APPROVED FUND,
NO MINIMUM AMOUNT NEED BE ASSIGNED; AND

 

(B)           IN ANY CASE NOT DESCRIBED IN PARAGRAPH (B)(I)(A) OF THIS SECTION,
THE AGGREGATE AMOUNT OF THE COMMITMENT (WHICH FOR THIS PURPOSE INCLUDES LOANS
OUTSTANDING THEREUNDER) OR, IF THE APPLICABLE COMMITMENT IS NOT THEN IN EFFECT,
THE PRINCIPAL OUTSTANDING BALANCE OF THE 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 OR, IF
“TRADE DATE” IS SPECIFIED IN THE ASSIGNMENT AND ASSUMPTION, AS OF THE TRADE
DATE) SHALL NOT BE LESS THAN $5,000,000 UNLESS EACH OF THE ADMINISTRATIVE AGENT
AND, SO LONG AS NO EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, EACH
BORROWER OTHERWISE CONSENTS (EACH SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD
OR DELAYED); PROVIDED, HOWEVER, THAT CONCURRENT ASSIGNMENTS TO MEMBERS OF AN
ASSIGNEE GROUP AND CONCURRENT ASSIGNMENTS FROM MEMBERS OF AN ASSIGNEE GROUP TO A
SINGLE ASSIGNEE (OR TO AN ASSIGNEE AND MEMBERS OF ITS ASSIGNEE GROUP) WILL BE
TREATED AS A SINGLE ASSIGNMENT FOR PURPOSES OF DETERMINING WHETHER SUCH MINIMUM
AMOUNT HAS BEEN MET.

 

(II)           PROPORTIONATE AMOUNTS.  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 WITH RESPECT TO THE LOAN OR THE COMMITMENT
ASSIGNED, EXCEPT THAT THIS CLAUSE (II) SHALL NOT APPLY TO THE SWINGLINE LENDER’S
RIGHTS AND OBLIGATIONS IN RESPECT OF SWINGLINE LOANS;

 

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(III)          REQUIRED CONSENTS.  NO CONSENT SHALL BE REQUIRED FOR ANY
ASSIGNMENT EXCEPT TO THE EXTENT REQUIRED BY PARAGRAPH (B)(I)(B) OF THIS
SECTION AND, IN ADDITION:

 

(A)          THE CONSENT OF EACH BORROWER (SUCH CONSENT NOT TO BE UNREASONABLY
WITHHELD) SHALL BE REQUIRED UNLESS (X) AN EVENT OF DEFAULT HAS OCCURRED AND IS
CONTINUING AT THE TIME OF SUCH ASSIGNMENT OR (Y) SUCH ASSIGNMENT IS TO A LENDER,
AN AFFILIATE OF A LENDER OR AN APPROVED FUND; PROVIDED THAT THE BORROWERS SHALL
BE DEEMED TO HAVE CONSENTED TO ANY SUCH ASSIGNMENT UNLESS IT SHALL OBJECT
THERETO BY WRITTEN NOTICE TO THE ADMINISTRATIVE AGENT WITHIN 10 BUSINESS DAYS
AFTER HAVING RECEIVED NOTICE THEREOF;

 

(B)           THE CONSENT OF THE ADMINISTRATIVE AGENT (SUCH CONSENT NOT TO BE
UNREASONABLY WITHHELD OR DELAYED) SHALL BE REQUIRED FOR ASSIGNMENTS IF SUCH
ASSIGNMENT IS TO A PERSON THAT IS NOT A LENDER, AN AFFILIATE OF SUCH LENDER OR
AN APPROVED FUND WITH RESPECT TO SUCH LENDER; AND

 

(C)           THE CONSENT OF THE ISSUING BANK (SUCH CONSENT NOT TO BE
UNREASONABLY WITHHELD OR DELAYED) SHALL BE REQUIRED FOR ANY ASSIGNMENT THAT
INCREASES THE OBLIGATION OF THE ASSIGNEE TO PARTICIPATE IN EXPOSURE UNDER ONE OR
MORE LETTERS OF CREDIT (WHETHER OR NOT THEN OUTSTANDING) AND THE CONSENT OF THE
SWINGLINE LENDER (SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD OR DELAYED) SHALL
BE REQUIRED IF SUCH ASSIGNMENT IS TO A PERSON THAT IS NOT A LENDER, AN AFFILIATE
OF SUCH LENDER OR AN APPROVED FUND WITH RESPECT TO SUCH LENDER.

 

(IV)          ASSIGNMENT AND ASSUMPTION.  THE PARTIES TO EACH ASSIGNMENT SHALL
EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT AN ASSIGNMENT AND ASSUMPTION,
TOGETHER WITH A PROCESSING AND RECORDATION FEE IN THE AMOUNT, IF ANY, REQUIRED
AS SET FORTH IN SCHEDULE 10.06; PROVIDED, HOWEVER, THAT THE ADMINISTRATIVE AGENT
MAY, IN ITS SOLE DISCRETION, ELECT TO WAIVE SUCH PROCESSING AND RECORDATION FEE
IN THE CASE OF ANY ASSIGNMENT.  THE ASSIGNEE, IF IT IS NOT A LENDER, SHALL
DELIVER TO THE ADMINISTRATIVE AGENT AN ADMINISTRATIVE QUESTIONNAIRE.

 

(V)           ASSIGNMENT TO BORROWERS.  ASSIGNMENTS TO THE BORROWERS AND
AFFILIATES OF THE BORROWERS SHALL BE PERMITTED SUBJECT TO THE FOLLOWING
LIMITATIONS (WHICH, FOR THE AVOIDANCE OF DOUBT, ARE NOT APPLICABLE IN THE CASE
OF ASSIGNMENTS TO AFFILIATED DEBT FUNDS):

 

(A)          ANY SUCH LOANS ACQUIRED BY A BORROWER OR ANY SUBSIDIARIES OF A
BORROWER SHALL BE CANCELLED PROMPTLY UPON THE ACQUISITION THEREOF;

 

(B)           LENDERS THAT ARE AFFILIATES OF THE BORROWERS SHALL HAVE NO RIGHT
TO CONSENT TO ANY AMENDMENT, MODIFICATION, WAIVER, CONSENT OR OTHER SUCH ACTION
WITH RESPECT TO ANY OF THE TERMS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
OR OTHERWISE VOTE ON ANY MATTER RELATED TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT.

 

(VI)          NO ASSIGNMENT TO NATURAL PERSONS.  NO SUCH ASSIGNMENT SHALL BE
MADE TO A NATURAL PERSON.

 

SUBJECT TO ACCEPTANCE AND RECORDING THEREOF BY THE ADMINISTRATIVE AGENT PURSUANT
TO PARAGRAPH (C) OF THIS SECTION, FROM AND AFTER THE EFFECTIVE DATE SPECIFIED IN
EACH ASSIGNMENT AND ASSUMPTION, THE ASSIGNEE THEREUNDER SHALL BE A PARTY TO THIS
AGREEMENT 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

 

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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 3.01, 3.04, 3.05 AND 10.04
WITH RESPECT TO FACTS AND CIRCUMSTANCES OCCURRING PRIOR TO THE EFFECTIVE DATE OF
SUCH ASSIGNMENT.  UPON REQUEST, EACH BORROWER (AT ITS EXPENSE) SHALL EXECUTE AND
DELIVER A NOTE TO THE ASSIGNEE LENDER.  ANY ASSIGNMENT OR TRANSFER BY A LENDER
OF RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT THAT DOES NOT COMPLY WITH THIS
PARAGRAPH 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 (D) OF THIS SECTION.

 

(C)                                  REGISTER.  THE ADMINISTRATIVE AGENT, ACTING
SOLELY FOR THIS PURPOSE AS AN AGENT OF THE BORROWER, SHALL MAINTAIN AT THE
ADMINISTRATIVE AGENT’S OFFICE 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 COMMITMENTS OF, AND PRINCIPAL AMOUNTS OF THE LOANS 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 BORROWER, THE
ADMINISTRATIVE AGENT 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 AND THE
TRANSFER OF ANY LOAN SHALL NOT BE RECOGNIZED EXCEPT TO THE EXTENT REFLECTED ON
THE REGISTER.  THE REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE BORROWERS
AND ANY LENDER, AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE
PRIOR NOTICE.  THIS SECTION 10.06 IS INTENDED TO CAUSE THE LOANS TO BE TREATED
AS BEING IN REGISTERED FORM WITHIN THE MEANING OF U.S. TREASURY REGULATION
SECTION 103-1(C) AND WILL BE INTERPRETED IN ACCORDANCE WITH THAT INTENTION.

 

(D)                                 PARTICIPATIONS.  ANY LENDER MAY AT ANY TIME,
WITHOUT THE CONSENT OF, OR NOTICE TO, THE BORROWERS OR THE ADMINISTRATIVE AGENT,
SELL PARTICIPATIONS TO ANY PERSON (OTHER THAN A NATURAL PERSON OR ANY BORROWERS
OR ANY OF THE BORROWERS’ AFFILIATES OR SUBSIDIARIES) (EACH, A “PARTICIPANT”) IN
ALL OR A PORTION OF SUCH LENDER’S RIGHTS AND/OR OBLIGATIONS UNDER THIS AGREEMENT
(INCLUDING ALL OR A PORTION OF ITS COMMITMENT AND/OR THE LOANS (INCLUDING SUCH
LENDER’S PARTICIPATIONS IN SWINGLINE LOANS) OWING TO IT); PROVIDED THAT (I) SUCH
LENDER’S OBLIGATIONS UNDER THIS AGREEMENT SHALL REMAIN UNCHANGED, (II) SUCH
LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE OTHER PARTIES HERETO FOR THE
PERFORMANCE OF SUCH OBLIGATIONS AND (III) THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS, ISSUING BANK AND SWINGLINE LENDER 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 10.01 THAT AFFECTS SUCH PARTICIPANT.  SUBJECT TO PARAGRAPH (E) OF THIS
SECTION, EACH BORROWER AGREES THAT EACH PARTICIPANT SHALL BE ENTITLED TO THE
BENEFITS OF SECTIONS 3.01, 3.04 AND 3.05 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 BE
ENTITLED TO THE BENEFITS OF SECTION 10.08 AS THOUGH IT WERE A LENDER, PROVIDED
SUCH PARTICIPANT AGREES TO BE SUBJECT TO SECTION 2.13 AS THOUGH IT WERE A
LENDER.  EACH LENDER THAT SELLS A PARTICIPATION, ACTING SOLELY FOR THIS PURPOSE
AS AN AGENT OF THE BORROWER, SHALL MAINTAIN A REGISTER ON WHICH IT ENTERS THE
NAME AND ADDRESS OF EACH PARTICIPANT AND THE PRINCIPAL AMOUNTS (AND STATED
INTEREST) OF EACH PARTICIPANT’S INTEREST IN THE LOANS OR OTHER OBLIGATIONS UNDER
THIS AGREEMENT (THE “PARTICIPANT REGISTER”).  THE ENTRIES IN THE PARTICIPANT
REGISTER SHALL BE CONCLUSIVE, AND SUCH LENDER, EACH LOAN PARTY AND THE
ADMINISTRATIVE AGENT SHALL TREAT EACH PERSON WHOSE NAME IS RECORDED IN THE
PARTICIPANT REGISTER PURSUANT TO THE TERMS HEREOF AS THE OWNER OF SUCH
PARTICIPATION FOR ALL PURPOSES OF THIS AGREEMENT, NOTWITHSTANDING NOTICE TO THE
CONTRARY.

 

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(E)                                  LIMITATIONS UPON PARTICIPANT RIGHTS.  A
PARTICIPANT SHALL NOT BE ENTITLED TO RECEIVE ANY GREATER PAYMENT UNDER SECTIONS
3.01 OR 3.04 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 BORROWER’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 3.01 UNLESS THE BORROWERS ARE
NOTIFIED OF THE PARTICIPATION SOLD TO SUCH PARTICIPANT AND SUCH PARTICIPANT
AGREES, FOR THE BENEFIT OF THE BORROWER, TO COMPLY WITH SECTION 3.01(E) AS
THOUGH IT WERE A LENDER.

 

(F)                                    CERTAIN PLEDGES.  ANY LENDER MAY AT ANY
TIME PLEDGE OR ASSIGN A SECURITY INTEREST IN ALL OR ANY PORTION OF ITS RIGHTS
UNDER THIS AGREEMENT (INCLUDING UNDER ITS NOTE, IF ANY) TO SECURE OBLIGATIONS OF
SUCH LENDER, INCLUDING ANY PLEDGE OR ASSIGNMENT TO SECURE OBLIGATIONS TO A
FEDERAL RESERVE BANK; PROVIDED THAT NO SUCH PLEDGE OR ASSIGNMENT SHALL RELEASE
SUCH LENDER FROM ANY OF ITS OBLIGATIONS HEREUNDER OR SUBSTITUTE ANY SUCH PLEDGEE
OR ASSIGNEE FOR SUCH LENDER AS A PARTY HERETO.

 

(G)                                 ELECTRONIC EXECUTION OF ASSIGNMENTS.  THE
WORDS “EXECUTION,” “SIGNED,” “SIGNATURE,” AND WORDS OF LIKE IMPORT IN ANY
ASSIGNMENT AND ASSUMPTION SHALL BE DEEMED TO INCLUDE ELECTRONIC SIGNATURES OR
THE KEEPING OF RECORDS IN ELECTRONIC FORM, EACH OF WHICH SHALL BE OF THE SAME
LEGAL EFFECT, VALIDITY OR ENFORCEABILITY AS A MANUALLY EXECUTED SIGNATURE OR THE
USE OF A PAPER-BASED RECORDKEEPING SYSTEM, AS THE CASE MAY BE, TO THE EXTENT AND
AS PROVIDED FOR IN ANY APPLICABLE LAW, INCLUDING THE FEDERAL ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT, THE NEW YORK STATE ELECTRONIC
SIGNATURES AND RECORDS ACT, OR ANY OTHER SIMILAR STATE LAWS BASED ON THE UNIFORM
ELECTRONIC TRANSACTIONS ACT.

 

(H)                                 RESIGNATION AS SWINGLINE LENDER AFTER
ASSIGNMENT.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IF AT
ANY TIME CITIBANK, N.A. ASSIGNS ALL OF ITS COMMITMENT AND LOANS PURSUANT TO
SUBSECTION (B) ABOVE, CITIBANK, N.A. MAY UPON 30 DAYS’ NOTICE TO THE BORROWERS,
RESIGN AS SWINGLINE LENDER.  IN THE EVENT OF ANY SUCH RESIGNATION AS SWINGLINE
LENDER, THE BORROWERS SHALL BE ENTITLED TO APPOINT FROM AMONG THE LENDERS A
SUCCESSOR SWINGLINE LENDER HEREUNDER; PROVIDED, HOWEVER, THAT NO FAILURE BY THE
BORROWERS TO APPOINT ANY SUCH SUCCESSOR SHALL AFFECT THE RESIGNATION OF
CITIBANK, N.A. AS SWINGLINE LENDER, AS THE CASE MAY BE.  IF THE CITIBANK, N.A.
RESIGNS AS SWINGLINE LENDER, IT SHALL RETAIN ALL THE RIGHTS OF THE SWINGLINE
LENDER PROVIDED FOR HEREUNDER WITH RESPECT TO SWINGLINE LOANS MADE BY IT AND
OUTSTANDING AS OF THE EFFECTIVE DATE OF SUCH RESIGNATION, INCLUDING THE RIGHT TO
REQUIRE THE LENDERS TO MAKE BASE RATE LOANS, DAILY FLOATING EURODOLLAR LOANS OR
FUND RISK PARTICIPATIONS IN OUTSTANDING SWINGLINE LOANS.  UPON THE APPOINTMENT
OF A SUCCESSOR SWINGLINE LENDER, SUCH SUCCESSOR SHALL SUCCEED TO AND BECOME
VESTED WITH ALL OF THE RIGHTS, POWERS, PRIVILEGES AND DUTIES OF THE RETIRING
SWINGLINE LENDER, AS THE CASE MAY BE.

 

10.07                 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.  EACH
OF THE ADMINISTRATIVE AGENT, THE LENDERS AND THE ISSUING BANK AGREES TO MAINTAIN
THE CONFIDENTIALITY OF THE INFORMATION (AS DEFINED BELOW), EXCEPT THAT
INFORMATION MAY BE DISCLOSED (A) TO ITS AFFILIATES AND TO ITS AND ITS
AFFILIATES’ RESPECTIVE MANAGERS, ADMINISTRATORS, TRUSTEES, PARTNERS, DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ADVISORS AND OTHER REPRESENTATIVES (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 PURPORTING TO HAVE JURISDICTION OVER IT (INCLUDING ANY SELF-REGULATORY
AUTHORITY, SUCH AS THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS), (C) TO
THE EXTENT REQUIRED BY APPLICABLE LAWS OR REGULATIONS OR BY ANY SUBPOENA OR
SIMILAR LEGAL PROCESS, (D) TO ANY OTHER PARTY HERETO, (E) IN CONNECTION WITH THE
EXERCISE OF ANY REMEDIES HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT OR ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
THE ENFORCEMENT OF RIGHTS HEREUNDER OR THEREUNDER, (F) SUBJECT TO AN AGREEMENT
EXECUTED AND DELIVERED TO AND FOR THE BENEFIT OF THE BORROWERS 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, (II) ANY ACTUAL OR PROSPECTIVE
PARTY (OR ITS MANAGERS,

 

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ADMINISTRATORS, TRUSTEES, PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS,
ADVISORS AND OTHER REPRESENTATIVES) TO ANY SWAP, DERIVATIVE OR OTHER TRANSACTION
UNDER WHICH PAYMENTS ARE TO BE MADE BY REFERENCE TO THE BORROWERS AND ITS
OBLIGATIONS, THIS AGREEMENT OR PAYMENTS HEREUNDER, (III) ANY RATING AGENCY OR
(IV) THE CUSIP SERVICE BUREAU OR ANY SIMILAR ORGANIZATION, (G) WITH THE CONSENT
OF THE BORROWERS OR (H) TO THE EXTENT SUCH INFORMATION (X) BECOMES PUBLICLY
AVAILABLE OTHER THAN AS A RESULT OF A BREACH OF THIS SECTION OR (Y) BECOMES
AVAILABLE TO THE ADMINISTRATIVE AGENT, ANY LENDER, THE ISSUING BANK OR ANY OF
THEIR RESPECTIVE AFFILIATES ON A NONCONFIDENTIAL BASIS FROM A SOURCE OTHER THAN
THE BORROWER.

 

FOR PURPOSES OF THIS SECTION, “INFORMATION” MEANS ALL INFORMATION RECEIVED FROM
ANY BORROWER OR ANY OF ITS SUBSIDIARIES RELATING TO THE BORROWERS OR ANY OF
THEIR SUBSIDIARIES OR ANY OF THEIR RESPECTIVE BUSINESSES, OTHER THAN ANY SUCH
INFORMATION THAT IS AVAILABLE TO THE ADMINISTRATIVE AGENT, ANY LENDER OR THE
ISSUING BANK ON A NONCONFIDENTIAL BASIS PRIOR TO DISCLOSURE BY ANY BORROWER OR
ANY OF ITS SUBSIDIARIES, PROVIDED THAT, IN THE CASE OF INFORMATION RECEIVED FROM
ANY BORROWER OR ANY OF ITS SUBSIDIARIES AFTER THE DATE HEREOF, SUCH INFORMATION
IS CLEARLY IDENTIFIED AT THE TIME OF DELIVERY AS CONFIDENTIAL OR IS MATERIAL
NON-PUBLIC INFORMATION.  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.

 

EACH OF THE ADMINISTRATIVE AGENT AND THE LENDERS ACKNOWLEDGES THAT (A) THE
INFORMATION MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWERS
OR A SUBSIDIARY, AS THE CASE MAY BE, (B) IT HAS DEVELOPED COMPLIANCE PROCEDURES
REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION, (C) IT WILL HANDLE SUCH
MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH APPLICABLE LAW, INCLUDING
FEDERAL AND STATE SECURITIES LAWS AND (D) THE CONFIDENTIALITY PROVISIONS
CONTAINED HEREIN, IN SO FAR AS SUCH PROVISIONS RELATE TO MATERIAL PROPRIETARY
INFORMATION, SHALL SURVIVE FOR 12 MONTHS FOLLOWING THE MATURITY DATE AND, IN SO
FAR AS SUCH PROVISIONS RELATE TO MATERIAL NON-PUBLIC INFORMATION, SHALL SURVIVE
IN ACCORDANCE WITH APPLICABLE LAW.

 

10.08                 RIGHT OF SETOFF.  IF AN EVENT OF DEFAULT SHALL HAVE
OCCURRED AND BE CONTINUING, EACH LENDER AND EACH OF THEIR RESPECTIVE AFFILIATES
IS HEREBY AUTHORIZED AT ANY TIME AND FROM TIME TO TIME, AFTER PROVIDING PRIOR
WRITTEN NOTICE TO THE ADMINISTRATIVE AGENT, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, TO SET OFF AND APPLY ANY AND ALL DEPOSITS (GENERAL OR SPECIAL,
TIME OR DEMAND, PROVISIONAL OR FINAL, IN WHATEVER CURRENCY) AT ANY TIME HELD AND
OTHER OBLIGATIONS (IN WHATEVER CURRENCY) AT ANY TIME OWING BY SUCH LENDER OR ANY
SUCH AFFILIATE TO OR FOR THE CREDIT OR THE ACCOUNT OF THE APPLICABLE BORROWER 
AGAINST ANY AND ALL OF THE OBLIGATIONS OF THE APPLICABLE BORROWER NOW OR
HEREAFTER EXISTING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT TO SUCH
LENDER, IRRESPECTIVE OF WHETHER OR NOT SUCH LENDER SHALL HAVE MADE ANY DEMAND
UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND ALTHOUGH SUCH OBLIGATIONS OF
SUCH BORROWER MAY BE CONTINGENT OR UNMATURED OR ARE OWED TO A BRANCH OR OFFICE
OF SUCH LENDER DIFFERENT FROM THE BRANCH OR OFFICE HOLDING SUCH DEPOSIT OR
OBLIGATED ON SUCH INDEBTEDNESS.  THE RIGHTS OF EACH LENDER AND THEIR RESPECTIVE
AFFILIATES UNDER THIS SECTION ARE IN ADDITION TO OTHER RIGHTS AND REMEDIES
(INCLUDING OTHER RIGHTS OF SETOFF) THAT SUCH LENDER OR THEIR RESPECTIVE
AFFILIATES MAY HAVE.  EACH LENDER AGREES TO NOTIFY THE BORROWERS AND THE
ADMINISTRATIVE AGENT PROMPTLY AFTER ANY SUCH SETOFF AND APPLICATION, PROVIDED
THAT THE FAILURE TO GIVE SUCH NOTICE SHALL NOT AFFECT THE VALIDITY OF SUCH
SETOFF AND APPLICATION.

 

10.09                 INTEREST RATE LIMITATION.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN ANY LOAN DOCUMENT, THE INTEREST PAID OR AGREED TO BE PAID
UNDER THE LOAN DOCUMENTS SHALL NOT EXCEED THE MAXIMUM RATE OF NON-USURIOUS
INTEREST PERMITTED BY APPLICABLE LAW (THE “MAXIMUM RATE”).  IF THE
ADMINISTRATIVE AGENT OR ANY LENDER SHALL RECEIVE INTEREST IN AN AMOUNT THAT
EXCEEDS THE MAXIMUM RATE, THE EXCESS INTEREST SHALL BE APPLIED TO THE PRINCIPAL
OF THE LOANS OR, IF IT EXCEEDS SUCH UNPAID PRINCIPAL, REFUNDED TO THE
BORROWERS.  IN DETERMINING WHETHER THE INTEREST CONTRACTED FOR, CHARGED, OR
RECEIVED BY THE ADMINISTRATIVE AGENT OR A LENDER EXCEEDS THE MAXIMUM RATE, SUCH
PERSON MAY, TO THE EXTENT PERMITTED

 

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BY APPLICABLE LAW, (A) CHARACTERIZE ANY PAYMENT THAT IS NOT PRINCIPAL AS AN
EXPENSE, FEE, OR PREMIUM RATHER THAN INTEREST, (B) EXCLUDE VOLUNTARY PREPAYMENTS
AND THE EFFECTS THEREOF, AND (C) AMORTIZE, PRORATE, ALLOCATE, AND SPREAD IN
EQUAL OR UNEQUAL PARTS THE TOTAL AMOUNT OF INTEREST THROUGHOUT THE CONTEMPLATED
TERM OF THE OBLIGATIONS HEREUNDER.

 

10.10                 COUNTERPARTS; INTEGRATION; EFFECTIVENESS.  THIS AGREEMENT
MAY BE EXECUTED IN COUNTERPARTS (AND BY DIFFERENT PARTIES HERETO IN DIFFERENT
COUNTERPARTS), EACH OF WHICH SHALL CONSTITUTE AN ORIGINAL, BUT ALL OF WHICH WHEN
TAKEN TOGETHER SHALL CONSTITUTE A SINGLE CONTRACT.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS 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 THAT, WHEN TAKEN TOGETHER, BEAR THE
SIGNATURES OF EACH OF THE OTHER PARTIES HERETO.  DELIVERY OF AN EXECUTED
COUNTERPART OF A SIGNATURE PAGE OF THIS AGREEMENT BY TELECOPY SHALL BE EFFECTIVE
AS DELIVERY OF A MANUALLY EXECUTED COUNTERPART OF THIS AGREEMENT.

 

10.11                 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  ALL
REPRESENTATIONS AND WARRANTIES MADE HEREUNDER AND IN ANY OTHER LOAN DOCUMENT OR
OTHER DOCUMENT DELIVERED PURSUANT HERETO OR THERETO OR IN CONNECTION HEREWITH OR
THEREWITH SHALL SURVIVE THE EXECUTION AND DELIVERY HEREOF AND THEREOF.  SUCH
REPRESENTATIONS AND WARRANTIES HAVE BEEN OR WILL BE RELIED UPON BY THE
ADMINISTRATIVE AGENT AND EACH LENDER, REGARDLESS OF ANY INVESTIGATION MADE BY
THE ADMINISTRATIVE AGENT OR ANY LENDER OR ON THEIR BEHALF AND NOTWITHSTANDING
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY HAVE HAD NOTICE OR KNOWLEDGE OF
ANY DEFAULT AT THE TIME OF ANY BORROWING, AND SHALL CONTINUE IN FULL FORCE AND
EFFECT AS LONG AS ANY LOAN OR ANY OTHER OBLIGATION HEREUNDER SHALL REMAIN UNPAID
OR UNSATISFIED.

 

10.12                 SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS IS HELD TO BE ILLEGAL, INVALID OR UNENFORCEABLE, (A) THE
LEGALITY, VALIDITY AND ENFORCEABILITY OF THE REMAINING PROVISIONS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL NOT BE AFFECTED OR IMPAIRED THEREBY
AND (B) THE PARTIES SHALL ENDEAVOR IN GOOD FAITH NEGOTIATIONS TO REPLACE THE
ILLEGAL, INVALID OR UNENFORCEABLE PROVISIONS WITH VALID PROVISIONS THE ECONOMIC
EFFECT OF WHICH COMES AS CLOSE AS POSSIBLE TO THAT OF THE ILLEGAL, INVALID OR
UNENFORCEABLE PROVISIONS.  THE INVALIDITY OF A PROVISION IN A PARTICULAR
JURISDICTION SHALL NOT INVALIDATE OR RENDER UNENFORCEABLE SUCH PROVISION IN ANY
OTHER JURISDICTION.

 

10.13                 REPLACEMENT OF LENDERS.  IF ANY LENDER REQUESTS
COMPENSATION UNDER SECTION 3.04, OR IF ANY BORROWER IS REQUIRED TO PAY ANY
ADDITIONAL AMOUNT TO ANY LENDER OR ANY GOVERNMENTAL AUTHORITY FOR THE ACCOUNT OF
ANY LENDER PURSUANT TO SECTION 3.01, IF ANY LENDER GIVES A NOTICE PURSUANT TO
SECTION 3.02 OR IF ANY LENDER IS A DEFAULTING LENDER OR IF ANY OTHER
CIRCUMSTANCE EXISTS HEREUNDER THAT GIVES ANY BORROWER THE RIGHT TO REPLACE A
LENDER AS A PARTY HERETO, THEN SUCH BORROWER 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, AND CONSENTS REQUIRED BY, SECTION 10.06), ALL
OF ITS INTERESTS, RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT AND THE RELATED
LOAN DOCUMENTS TO AN ASSIGNEE THAT SHALL ASSUME SUCH OBLIGATIONS (WHICH ASSIGNEE
MAY BE ANOTHER LENDER, IF A LENDER ACCEPTS SUCH ASSIGNMENT), PROVIDED THAT:

 

(B)                                 SUCH LENDER SHALL HAVE RECEIVED PAYMENT OF
AN AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL OF ITS LOANS, ACCRUED INTEREST
THEREON, ACCRUED FEES AND ALL OTHER AMOUNTS PAYABLE TO IT HEREUNDER AND UNDER
THE OTHER LOAN DOCUMENTS (INCLUDING ANY AMOUNTS UNDER SECTION 3.05) FROM THE
ASSIGNEE (TO THE EXTENT OF SUCH OUTSTANDING PRINCIPAL AND ACCRUED INTEREST AND
FEES) OR THE BORROWERS (IN THE CASE OF ALL OTHER AMOUNTS);

 

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(C)                                  IN THE CASE OF ANY SUCH ASSIGNMENT
RESULTING FROM A CLAIM FOR COMPENSATION UNDER SECTION 3.04 OR PAYMENTS REQUIRED
TO BE MADE PURSUANT TO SECTION 3.01, SUCH ASSIGNMENT WILL RESULT IN A REDUCTION
IN SUCH COMPENSATION OR PAYMENTS THEREAFTER;

 

(D)                                 SUCH ASSIGNMENT DOES NOT CONFLICT WITH
APPLICABLE LAWS; AND

 

(E)                                  SUCH ASSIGNMENT IS MADE IN ACCORDANCE WITH
SECTION 10.06(B)(III)(B).

 

(F)                                    A LENDER SHALL NOT BE REQUIRED TO MAKE
ANY SUCH ASSIGNMENT OR DELEGATION IF, PRIOR THERETO, AS A RESULT OF A WAIVER BY
SUCH LENDER OR OTHERWISE, THE CIRCUMSTANCES ENTITLING THE BORROWERS TO REQUIRE
SUCH ASSIGNMENT AND DELEGATION CEASE TO APPLY.

 

10.14                 GOVERNING LAW; JURISDICTION; ETC.

 

(A)                                  GOVERNING LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF OTHER THAN SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.

 

(B)                                 SUBMISSION TO JURISDICTION.  EACH OF THE
BORROWERS IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE EXCLUSIVE JURISDICTION OF THE COURTS 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 ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO 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 COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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 OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT
THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

NOTWITHSTANDING ANYTHING ABOVE IN THIS CLAUSE (B), THE ADMINISTRATIVE AGENT
RESERVES FOR ITSELF THE RIGHT TO PURSUE ENFORCEMENT OF ITS RIGHTS AGAINST ANY
NON-US BORROWER OUTSIDE OF NEW YORK (INCLUDING IN THE COUNTRY OF INCORPORATION
OF SUCH NON-US BORROWER) AND ANY NON-US BORROWER IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT NEW YORK SHALL BE ITS EXCLUSIVE FORUM FOR INITIATING ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT.

 

(C)                                  WAIVER OF VENUE.  EACH OF THE BORROWERS
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS

 

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AGREEMENT OR ANY OTHER LOAN DOCUMENT 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 APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

 

(D)                                 SERVICE OF PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY
HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

(E)                                  WAIVER OF JURY TRIAL.  EACH PARTY HERETO
HEREBY IRREVOCABLY 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 ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON 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 AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

10.15                 NO ADVISORY OR FIDUCIARY RESPONSIBILITY.  IN CONNECTION
WITH ALL ASPECTS OF EACH TRANSACTION CONTEMPLATED HEREBY, EACH OF THE BORROWERS
ACKNOWLEDGES AND AGREES, AND ACKNOWLEDGES ITS AFFILIATES’ UNDERSTANDING, THAT:
(I) THE CREDIT FACILITY PROVIDED FOR HEREUNDER AND ANY RELATED ARRANGING OR
OTHER SERVICES IN CONNECTION THEREWITH (INCLUDING IN CONNECTION WITH ANY
AMENDMENT, WAIVER OR OTHER MODIFICATION HEREOF OR OF ANY OTHER LOAN DOCUMENT)
ARE AN ARM’S-LENGTH COMMERCIAL TRANSACTION BETWEEN THE BORROWERS AND THEIR
RESPECTIVE AFFILIATES, ON THE ONE HAND, AND THE ADMINISTRATIVE AGENT AND THE
ARRANGER, ON THE OTHER HAND, AND EACH OF THE BORROWERS IS CAPABLE OF EVALUATING
AND UNDERSTANDING AND UNDERSTANDS AND ACCEPTS THE TERMS, RISKS AND CONDITIONS OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND BY THE OTHER LOAN DOCUMENTS (INCLUDING
ANY AMENDMENT, WAIVER OR OTHER MODIFICATION HEREOF OR THEREOF); (II) IN
CONNECTION WITH THE PROCESS LEADING TO SUCH TRANSACTION, THE ADMINISTRATIVE
AGENT AND THE ARRANGER EACH IS AND HAS BEEN ACTING SOLELY AS A PRINCIPAL AND IS
NOT THE FINANCIAL ADVISOR, AGENT OR FIDUCIARY, FOR THE BORROWERS OR ANY OF THEIR
RESPECTIVE AFFILIATES, STOCKHOLDERS, CREDITORS OR EMPLOYEES OR ANY OTHER PERSON;
(III) NEITHER THE ADMINISTRATIVE AGENT NOR THE ARRANGER HAS ASSUMED OR WILL
ASSUME AN ADVISORY, AGENCY OR FIDUCIARY RESPONSIBILITY IN FAVOR OF THE BORROWERS
WITH RESPECT TO ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THE PROCESS
LEADING THERETO, INCLUDING WITH RESPECT TO ANY AMENDMENT, WAIVER OR OTHER
MODIFICATION HEREOF OR OF ANY OTHER LOAN DOCUMENT (IRRESPECTIVE OF WHETHER THE
ADMINISTRATIVE AGENT OR THE ARRANGER HAS ADVISED OR IS CURRENTLY ADVISING THE
BORROWERS OR ANY OF THEIR RESPECTIVE AFFILIATES ON OTHER MATTERS) AND NEITHER
THE ADMINISTRATIVE AGENT NOR THE ARRANGER HAS ANY OBLIGATION TO THE BORROWERS 
OR ANY OF THEIR RESPECTIVE AFFILIATES WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY EXCEPT THOSE OBLIGATIONS EXPRESSLY SET FORTH HEREIN AND IN
THE OTHER LOAN DOCUMENTS; (IV) THE ADMINISTRATIVE AGENT AND THE ARRANGER AND
THEIR RESPECTIVE AFFILIATES MAY BE ENGAGED IN A BROAD RANGE OF TRANSACTIONS THAT
INVOLVE INTERESTS THAT DIFFER FROM THOSE OF THE BORROWERS AND THEIR RESPECTIVE
AFFILIATES, AND NEITHER THE ADMINISTRATIVE AGENT NOR THE ARRANGER HAS ANY
OBLIGATION TO DISCLOSE ANY OF SUCH INTERESTS BY VIRTUE OF ANY ADVISORY, AGENCY
OR FIDUCIARY RELATIONSHIP; AND (V) THE ADMINISTRATIVE AGENT AND THE ARRANGER
HAVE NOT PROVIDED AND WILL NOT PROVIDE ANY LEGAL, ACCOUNTING, REGULATORY OR TAX
ADVICE WITH RESPECT TO ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING
ANY AMENDMENT, WAIVER OR OTHER MODIFICATION HEREOF OR OF ANY OTHER LOAN
DOCUMENT) AND EACH OF THE BORROWERS HAS CONSULTED ITS OWN LEGAL, ACCOUNTING,

 

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REGULATORY AND TAX ADVISORS TO THE EXTENT IT HAS DEEMED APPROPRIATE.  EACH OF
THE BORROWERS HEREBY WAIVES AND RELEASES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY CLAIMS THAT IT MAY HAVE AGAINST THE ADMINISTRATIVE AGENT AND THE
ARRANGER WITH RESPECT TO ANY BREACH OR ALLEGED BREACH OF AGENCY OR FIDUCIARY
DUTY.

 

10.16                 U.S. PATRIOT ACT NOTICE.  EACH LENDER THAT IS SUBJECT TO
THE PATRIOT ACT (AS HEREINAFTER DEFINED) AND THE ADMINISTRATIVE AGENT (FOR
ITSELF AND NOT ON BEHALF OF ANY LENDER) HEREBY NOTIFIES THE BORROWERS THAT
PURSUANT TO THE REQUIREMENTS OF THE U.S. PATRIOT ACT (TITLE III OF PUB. L.
107-56 (SIGNED INTO LAW OCTOBER 26, 2001)) (THE “PATRIOT ACT”), IT IS REQUIRED
TO OBTAIN, VERIFY AND RECORD INFORMATION THAT IDENTIFIES THE BORROWERS, WHICH
INFORMATION INCLUDES THE NAME AND ADDRESS OF THE BORROWERS AND OTHER INFORMATION
THAT WILL ALLOW SUCH LENDER OR THE ADMINISTRATIVE AGENT, AS APPLICABLE, TO
IDENTIFY THE BORROWERS IN ACCORDANCE WITH THE PATRIOT ACT.

 

10.17                 ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

 

10.18                 JUDGMENT CURRENCY.  (A) A BORROWER’S OBLIGATION HEREUNDER
AND UNDER THE OTHER LOAN DOCUMENTS TO MAKE PAYMENTS IN THE APPLICABLE APPROVED
CURRENCY (PURSUANT TO SUCH OBLIGATION, THE “OBLIGATION CURRENCY”) SHALL NOT BE
DISCHARGED OR SATISFIED BY ANY TENDER OR RECOVERY PURSUANT TO ANY JUDGMENT
EXPRESSED IN OR CONVERTED INTO ANY CURRENCY OTHER THAN THE OBLIGATION CURRENCY,
EXCEPT TO THE EXTENT THAT SUCH TENDER OR RECOVERY RESULTS IN THE EFFECTIVE
RECEIPT BY THE ADMINISTRATIVE AGENT OR THE RESPECTIVE LENDER OF THE FULL AMOUNT
OF THE OBLIGATION CURRENCY EXPRESSED TO BE PAYABLE TO THE ADMINISTRATIVE AGENT
OR SUCH LENDER UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.  IF, FOR THE
PURPOSE OF OBTAINING OR ENFORCING JUDGMENT AGAINST A BORROWER IN ANY COURT OR IN
ANY JURISDICTION, IT BECOMES NECESSARY TO CONVERT INTO OR FROM ANY CURRENCY
OTHER THAN THE OBLIGATION CURRENCY (SUCH OTHER CURRENCY BEING HEREINAFTER
REFERRED TO AS THE “JUDGMENT CURRENCY”) AN AMOUNT DUE IN THE OBLIGATION
CURRENCY, THE CONVERSION SHALL BE MADE AT THE RELEVANT CURRENCY EQUIVALENT, AND
IN THE CASE OF OTHER CURRENCIES, THE RATE OF EXCHANGE (AS QUOTED BY THE
ADMINISTRATIVE AGENT OR IF THE ADMINISTRATIVE AGENT DOES NOT QUOTE A RATE OF
EXCHANGE ON SUCH CURRENCY, BY A KNOWN DEALER IN SUCH CURRENCY DESIGNATED BY THE
ADMINISTRATIVE AGENT) DETERMINED, IN EACH CASE, AS OF THE BUSINESS DAY
IMMEDIATELY PRECEDING THE DAY ON WHICH THE JUDGMENT IS GIVEN (SUCH BUSINESS DAY
BEING HEREINAFTER REFERRED TO AS THE “JUDGMENT CURRENCY CONVERSION DATE”).

 

(B)                                 IF THERE IS A CHANGE IN THE RATE OF EXCHANGE
PREVAILING BETWEEN THE JUDGMENT CURRENCY CONVERSION DATE AND THE DATE OF ACTUAL
PAYMENT OF THE AMOUNT DUE, BORROWER COVENANTS AND AGREES TO PAY, OR CAUSE TO BE
PAID, SUCH ADDITIONAL AMOUNTS, IF ANY (BUT IN ANY EVENT NOT A LESSER AMOUNT) AS
MAY BE NECESSARY TO ENSURE THAT THE AMOUNT PAID IN THE JUDGMENT CURRENCY, WHEN
CONVERTED AT THE RATE OF EXCHANGE PREVAILING ON THE DATE OF PAYMENT, WILL
PRODUCE THE AMOUNT OF THE OBLIGATION CURRENCY WHICH COULD HAVE BEEN PURCHASED
WITH THE AMOUNT OF JUDGMENT CURRENCY STIPULATED IN THE JUDGMENT OR JUDICIAL
AWARD AT THE RATE OF EXCHANGE PREVAILING ON THE JUDGMENT CURRENCY CONVERSION
DATE.

 

(C)                                  FOR PURPOSES OF DETERMINING THE RELEVANT
CURRENCY EQUIVALENT OR ANY OTHER RATE OF EXCHANGE FOR THIS SECTION 10.18, SUCH
AMOUNTS SHALL INCLUDE ANY PREMIUM AND COSTS PAYABLE IN CONNECTION WITH THE
PURCHASE OF THE OBLIGATION CURRENCY.

 

[Remainder of page intentionally left blank; signature pages follow]

 

99

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

 

 

 

 

KKR FINANCIAL HOLDINGS LLC

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: Michael McFerran

 

 

 

Title:COO

 

 

 

 

 

 

 

 

KKR FINANCIAL HOLDINGS II, LLC

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: Michael McFerran

 

 

 

Title:COO

 

 

 

 

 

 

 

 

KKR FINANCIAL HOLDINGS III, LLC

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: Michael McFerran

 

 

 

Title:COO

 

 

 

 

 

 

 

 

KKR FINANCIAL HOLDINGS, INC.

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: Michael McFerran

 

 

 

Title:COO

 

 

 

 

 

 

 

 

KKR FINANCIAL CLO 2009-1, LTD.

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: Michael McFerran

 

 

 

Title:COO

 

 

 

 

 

 

 

 

KFH III HOLDINGS LTD.

 

 

by

 

 

 

 

 

 

 

Name: Michael McFerran

 

 

 

Title:COO

 

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

 

 

 

KKR FINANCIAL HOLDINGS, LTD.

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: George Bashforth

 

 

 

Title:Director

 

 

 

 

 

 

 

 

KKR TRS HOLDINGS, LTD.

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: George Bashforth

 

 

 

Title:Director

 

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

 

 

 

CITIBANK, N.A.,
as Administrative Agent as Swingline Lender, as Issuing Bank and as Lender

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: Alexander F. Duka

 

 

 

Title:Managing Director/Senior Credit Officer

 

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

 

 

 

BANK OF AMERICA, N.A.,
as Lender

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: Laura Warner

 

 

 

Title: Vice President

 

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

 

 

 

DEUTSCHE BANK AG NEW YORK BRANCH,
as Lender

 

 

 

 

 

By

 

 

 

 

 

 

 

Name: Evelyn Thierry

 

 

 

Title:Director

 

 

 

 

 

 

 

 

By

 

 

 

 

 

 

 

Name: Omayra Laucella

 

 

 

Title:Vice President

 

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

 

 

 

MORGAN STANLEY BANK, N.A.,
as Lender

 

 

 

 

 

by

 

 

 

 

 

 

 

Name: Ryan Vetsch

 

 

 

Title:   Authorized Signatory

 

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