Exhibit 10.1

EXECUTION VERSION

 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of July 16, 2014

among

TORCHMARK CORPORATION,

as the Borrower,

TMK RE, LTD.,

as a Loan Party,

THE LENDERS PARTY HERETO,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent, Swing Line Lender and L/C Administrator,

BANK OF AMERICA, N.A.

REGIONS BANK,

and

U.S. BANK NATIONAL ASSOCIATION

as Co-Syndication Agents

and

BBVA COMPASS

and

SUNTRUST BANK

as Co-Documentation Agents

 

 

WELLS FARGO SECURITIES, LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

REGIONS CAPITAL MARKETS, A DIVISION OF REGIONS BANK,

and

U.S. BANK NATIONAL ASSOCIATION

as Joint Lead Arrangers and Joint Book Runners

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TABLE OF CONTENTS

 

        

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

   29

1.05

 

Times of Day

   29

1.06

 

Letter of Credit Amounts

   29 ARTICLE II   THE COMMITMENTS AND CREDIT EXTENSIONS    29

2.01

 

Revolving Loans

   29

2.02

 

Borrowings, Conversions and Continuations of Revolving Loans

   30

2.03

 

Letters of Credit

   31

2.04

 

Swing Line Loans

   44

2.05

 

Prepayments

   47

2.06

 

Termination or Reduction of Commitments

   48

2.07

 

Repayment of Loans

   48

2.08

 

Interest

   48

2.09

 

Fees

   49

2.10

 

Computation of Interest and Fees

   50

2.11

 

Evidence of Debt

   50

2.12

 

Payments Generally; Administrative Agent’s Clawback

   51

2.13

 

Sharing of Payments by Lenders

   52

2.14

 

Increase in Commitments

   53

2.15

 

Defaulting Lenders

   55 ARTICLE III   TAXES, YIELD PROTECTION AND ILLEGALITY    58

3.01

 

Taxes

   58

3.02

 

Illegality

   62

3.03

 

Inability to Determine Rates

   62

3.04

 

Increased Costs; Reserves on Eurodollar Rate Loans

   63

3.05

 

Compensation for Losses

   64

3.06

 

Mitigation Obligations; Replacement of Lenders

   65

3.07

 

Survival

   65 ARTICLE IV   CONDITIONS PRECEDENT TO CREDIT EXTENSIONS    65

4.01

 

Conditions of Initial Credit Extension

   65

4.02

 

Conditions to all Credit Extensions

   68 ARTICLE V   REPRESENTATIONS AND WARRANTIES    68

5.01

 

Existence, Qualification and Power; Compliance with Laws

   68

5.02

 

Authorization; No Contravention

   69

5.03

 

Governmental Authorization; Other Consents

   69

 

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5.04

 

Binding Effect

   69

5.05

 

Financial Statements; No Material Adverse Effect

   69

5.06

 

Litigation

   70

5.07

 

No Default

   70

5.08

 

Ownership of Property; Liens

   70

5.09

 

Environmental Compliance

   70

5.10

 

Insurance

   70

5.11

 

Taxes

   71

5.12

 

ERISA Compliance

   71

5.13

 

Subsidiaries; Equity Interests

   71

5.14

 

Margin Regulations; Investment Company Act

   72

5.15

 

Disclosure

   72

5.16

 

Compliance with Laws

   72

5.17

 

Intellectual Property; Licenses, Etc

   72

5.18

 

Solvent

   73

5.19

 

Insurance Licenses

   73

5.20

 

Indebtedness and Liens

   73

5.21

 

Reserves

   73

5.22

 

First Priority Interest

   73 ARTICLE VI   AFFIRMATIVE COVENANTS    74

6.01

 

Financial Statements

   74

6.02

 

Certificates; Other Information

   75

6.03

 

Notices

   77

6.04

 

Payment of Obligations

   78

6.05

 

Preservation of Existence, Etc

   78

6.06

 

Maintenance of Properties

   78

6.07

 

Maintenance of Insurance

   78

6.08

 

Compliance with Laws

   78

6.09

 

Books and Records

   79

6.10

 

Inspection Rights

   79

6.11

 

Use of Proceeds

   79

6.12

 

Further Assurances

   79

6.13

 

Collateral Requirements

   80

6.14

 

Conduct of Insurance Business

   80 ARTICLE VII   NEGATIVE COVENANTS    80

7.01

 

Liens

   80

7.02

 

Acquisitions

   80

7.03

 

Guarantees

   81

7.04

 

Fundamental Changes

   81

7.05

 

Dispositions

   81

7.06

 

Sale and Leaseback

   81

7.07

 

Change in Nature of Business

   81

7.08

 

Transactions with Affiliates

   81

7.09

 

Burdensome Agreements

   82

7.10

 

Use of Proceeds

   82

7.11

 

Financial Covenants

   82

7.12

 

Preferred Securities

   82

 

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ARTICLE VIII   EVENTS OF DEFAULT AND REMEDIES    83

8.01

 

Events of Default

   83

8.02

 

Remedies Upon Event of Default

   85

8.03

 

Application of Funds

   86 ARTICLE IX   ADMINISTRATIVE AGENT    87

9.01

 

Appointment and Authority

   87

9.02

 

Rights as a Lender

   87

9.03

 

Exculpatory Provisions

   87

9.04

 

Reliance by Administrative Agent

   88

9.05

 

Delegation of Duties

   89

9.06

 

Resignation of Administrative Agent

   89

9.07

 

Non-Reliance on Administrative Agent and Other Lenders

   90

9.08

 

No Other Duties, Etc

   90

9.09

 

Administrative Agent May File Proofs of Claim

   90

9.10

 

No Other Duties, etc

   91 ARTICLE X   MISCELLANEOUS    91

10.01

 

Amendments, Etc

   91

10.02

 

Notices; Effectiveness; Electronic Communication

   93

10.03

 

No Waiver; Cumulative Remedies

   94

10.04

 

Expenses; Indemnity; Damage Waiver

   95

10.05

 

Payments Set Aside

   97

10.06

 

Successors and Assigns; Participations

   97

10.07

 

Confidentiality

   102

10.08

 

Right of Setoff

   103

10.09

 

Interest Rate Limitation

   103

10.10

 

Counterparts; Integration; Effectiveness

   103

10.11

 

Survival of Representations and Warranties

   104

10.12

 

Severability

   104

10.13

 

Replacement of Lenders

   104

10.14

 

Governing Law; Jurisdiction; Etc.

   105

10.15

 

Waiver of Jury Trial

   106

10.16

 

Exceptions to Covenants

   106

10.17

 

No Strict Construction

   106

10.18

 

USA PATRIOT Act Notice

   106

10.19

 

Guaranty

   107

10.20

 

ENTIRE AGREEMENT

   110

10.21

 

Existing Credit Agreement Matters

   111

 

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SCHEDULES

 

1.01

   Collateral Advance Rates

2.01

   Commitments and Applicable Percentages

2.03

   Existing Letters of Credit

5.05

   Supplement to Interim Financial Statements

5.06

   Existing Litigation

5.13

   Subsidiaries and Other Equity Investments

5.19

   Insurance Licenses

10.02

   Administrative Agent’s Office, Certain Addresses for Notices

EXHIBITS

 

   Form of   

A

   Assignment and Assumption   

B

   Compliance Certificate   

C

   Revolving Loan Notice   

D

   Revolving Note   

E

   Several Letter of Credit   

F

   Swing Line Loan Notice   

G

   Swing Line Note   

H

   Borrowing Base Certificate   

I

   Existing Lender Agreements   

J

   Tax Compliance Certificates   

 

iv

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AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of
July 16, 2014, among each lender from time to time party hereto (collectively,
the “Lenders” and individually, a “Lender”), WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent, Swing Line Lender and L/C Administrator,
TORCHMARK CORPORATION, a Delaware corporation (the “Borrower”), and TMK RE,
LTD., a Bermuda reinsurance corporation (“TMK”).

The Loan Parties (as defined herein), certain other lenders and Wells Fargo
Bank, National Association, as administrative agent, are parties to that certain
Credit Agreement, dated as of December 10, 2010 (as previously amended, the
“Existing Credit Agreement”).

The parties hereto have agreed to amend and restate the Existing Credit
Agreement on the terms and conditions set forth herein, it being the intention
of the Loan Parties, the Lenders and the Administrative Agent that this
Agreement (as hereinafter defined) and the Loan Documents executed in connection
herewith shall not effect the novation of the obligations of the Loan Parties
thereunder but be merely a restatement and, where applicable, an amendment of
and substitution for the terms governing such obligations hereafter.

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and 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:

“2006 Indenture” has the meaning specified in Section 7.09.

“Acquisition” means the acquisition by any Person of (a) a majority of the
Equity Interests of another Person, (b) all or substantially all of the assets
of another Person or (c) all or substantially all of a line of business of
another Person, in each case (i) whether or not involving a merger or a
consolidation with such other Person and (ii) whether in one transaction or a
series of related transactions.

“Adjusted Fair Market Value” means with respect to any Eligible Collateral, an
amount equal to the product of the Fair Market Value of such Eligible Collateral
and the applicable percentage with respect to such Eligible Collateral as set
forth on Schedule 1.01.

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

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

 

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“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 specified, and in any event shall
include (a) any officer, director or general partner of such Person and (b) any
Person, or Affiliate of such Person that, directly or indirectly, beneficially
owns 10% or more of the voting Equity Interests of the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders. As of the
Restatement Effective Date, the Aggregate Commitment is $750,000,000.

“Agreement” means this Credit Agreement.

“AIL” means American Income Life Insurance Company, an Indiana insurance
company.

“Annual Statement” means the annual statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance Subsidiary’s jurisdiction of
incorporation or, if no specific form is so required, in the form of financial
statements recommended by the NAIC to be used for filing annual statutory
financial statements and shall contain the type of information recommended by
the NAIC to be disclosed therein, together with all exhibits or schedules filed
therewith.

“Applicable Issuing Party” means (a) in the case of Fronted Letters of Credit,
the Fronting Bank which issued such Fronted Letter of Credit and (b) in the case
of Several Letters of Credit, the L/C Administrator.

“Applicable Law” means in respect of any Person, all provisions of Laws
applicable to such Person, and all orders and decrees of all courts and
determinations of arbitrators applicable to such Person.

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time, subject to adjustment as
provided in Section 2.14. If the commitment of each Lender to make Loans and
issue Several Letters of Credit, the obligation of the Fronting Banks to issue
Fronted Letters of Credit, and the commitment of each L/C Issuer to make L/C
Credit Extensions have 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.

 

2

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“Applicable Rate” means the following percentages per annum, based upon the Debt
Rating set forth below:

 

Applicable Rate

 

Pricing Level

  

Debt Ratings

S&P/Moody’s

   Facility
Fee     Eurodollar Rate &
Letter of Credit Fee     Base Rate     All-In
Drawn  

1

   ³A+/³A1      0.10 %      0.90 %      0.00 %      1.00 % 

2

   A/A2      0.125 %      1.00 %      0.00 %      1.125 % 

3

   A-/A3      0.15 %      1.10 %      0.10 %      1.25 % 

4

   BBB+/Baa1      0.175 %      1.20 %      0.20 %      1.375 % 

5

   < BBB+/<Baa1      0.225 %      1.40 %      0.40 %      1.625 % 

“Debt Rating” means, as of any date of determination, the rating as determined
by either S&P or Moody’s (collectively, the “Debt Ratings”) of the Borrower’s
non-credit-enhanced, senior unsecured long-term debt; provided that if a
different Debt Rating is issued by each of the foregoing rating agencies, then
the higher of such Debt Ratings shall apply (with the Debt Rating for Pricing
Level 1 being the highest and the Debt Rating for Pricing Level 5 being the
lowest), unless there is a split in Debt Ratings of more than one level, in
which case the Pricing Level that is one level lower than the Pricing Level of
the higher Debt Rating shall apply. If at any time the Borrower has a Debt
Rating from either Moody’s or S&P but not from both Moody’s and S&P, then the
Pricing Level shall be based on the single available Debt Rating. If at any time
the Borrower does not have a Debt Rating from Moody’s and does not have a Debt
Rating from S&P, then Pricing Level 5 shall apply. If at any time Pricing Level
5 is applicable pursuant to the preceding sentence, the Lenders will, at the
request of the Borrower, enter into good faith negotiations with the Borrower
regarding amending this definition to refer to debt or corporate credit ratings
provided by one or more mutually satisfactory alternate debt or corporate credit
rating providers.

Initially, the Applicable Rate shall be determined based upon the Debt Rating
specified in the certificate delivered pursuant to Section 4.01(a)(vii).
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Debt Rating shall be effective during the period
commencing on the date of the public announcement thereof and ending on the date
immediately preceding the effective date of the next such change.

“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.

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

 

3

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“Attributable Indebtedness” means, on any date, 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.

“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal year ended December 31, 2013,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.

“Auto-Renewal Letter of Credit” has the meaning specified in
Section 2.03(b)(iii).

“Availability Period” means the period from and including the Restatement
Effective 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 and of the
obligation of the L/C Issuers to make L/C Credit Extensions pursuant to
Section 8.02.

“Base Rate” means, as of any date of determination, the greatest of (a) the
Prime Rate in effect on such day, (b) the Federal Funds Rate for such day plus
1.00% and (c) the One Month LIBOR Rate for such day (determined on a daily basis
as set forth in the definition of “Eurodollar Rate”) plus 1.00%. As used in this
definition, “One Month LIBOR Rate” means the Eurodollar Rate with a term
equivalent to one month commencing on such date of determination.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrower” has the meaning specified in the introductory paragraph hereto.

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

“Borrowing” means a Revolving Borrowing or a Swing Line Borrowing, as the
context may require.

“Borrowing Base” means, on any date of determination, an amount equal to the sum
of the Adjusted Fair Market Value of all Eligible Collateral on such date.

“Borrowing Base Certificate” means a certificate substantially in the form of
Exhibit H with such changes therein as the Administrative Agent may reasonably
request from time to time.

“Business Day” means (a) except as set forth in clause (b) below, any day
excluding Saturday, Sunday and any day which is a legal holiday under the laws
of the State of North Carolina, the State of New York or is a day on which
banking institutions located in such states are authorized or required by law or
other governmental action to close, and (b) with respect to all notices,
determinations, fundings and payments in connection with the Eurodollar Rate or
any Eurodollar Rate Loans, any day that is a Business Day described in clause
(a) above and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.

“Cash” means U.S. money, U.S. currency or a Dollar credit balance in a Deposit
Account which is a Collateral Account, which money, currency, credit balance and
Deposit Account are free and clear of any claim or Lien of any Person other than
the Administrative Agent or as otherwise herein provided.

 

4

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“Cash Collateralize” has the meaning specified in Section 2.03(g)(ii).

“Ceding Company” means an insurance or reinsurance Wholly-Owned Subsidiary of
the Borrower that has, pursuant to an Insurance Contract or a Reinsurance
Contract with TMK, agreed with TMK that TMK, as reinsurer, shall assume certain
liabilities of such insurance or reinsurance company under an Insurance
Contract.

“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, implementation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
Governmental Authority; provided that notwithstanding anything herein to the
contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder or issued in connection
therewith and (ii) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

“Change of Control” means an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 20% or more of the Equity Interests of the Borrower entitled to
vote for members of the board of directors or equivalent governing body of the
Borrower on a fully-diluted basis (and taking into account all such Equity
Interests that such person or group has the right to acquire pursuant to any
option right);

(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of the Borrower cease to
be composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and

 

5

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clause (iii), any individual whose initial nomination for, or assumption of
office as, a member of that board or equivalent governing body occurs as a
result of an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group other than a
solicitation for the election of one or more directors by or on behalf of the
board of directors); or

(c) any “Change of Control” as defined in any Indebtedness of the Borrower or
any of its Subsidiaries having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $10,000,000
shall occur.

“Code” means the Internal Revenue Code of 1986, and the rules and regulations
promulgated thereunder.

“Collateral” means, with respect to any Loan Party, all property and assets with
respect to which a security interest is purported to be granted in favor of the
Administrative Agent pursuant to a Security Agreement executed by such Loan
Party.

“Collateral Account” means any account at Wells Fargo or other institution
satisfactory to the Administrative Agent, in its sole discretion, as to which
Wells Fargo (or such other institution), the Borrower and the Administrative
Agent have entered into a Control Agreement and in which the Administrative
Agent has a perfected, first priority security interest.

“Commitment” means, as to each Lender, its obligation to (a) make Revolving
Loans to the Borrower pursuant to Section 2.01, (b) issue Several Letters of
Credit and purchase participations in L/C Obligations arising under Fronted
Letters of Credit, and (c) purchase participations in Swing Line 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 or joinder agreement 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 B.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Consolidated Capitalization” means, at any date of determination, the sum of
(a) Consolidated Net Worth as at such date plus (b) Consolidated Indebtedness as
at such date.

“Consolidated Indebtedness” means the Indebtedness of the Borrower and its
Subsidiaries (excluding any obligations in respect of Subordinated Debt not to
exceed $250,000,000 in aggregate principal amount) determined on a consolidated
basis in accordance with GAAP.

“Consolidated Net Income” means, for any period of calculation, the net income
of the Borrower and its Subsidiaries calculated on a consolidated basis in
accordance with GAAP.

 

6

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“Consolidated Net Worth” means, at any date of determination, the amount of
consolidated common and preferred shareholders’ equity of the Borrower and its
Subsidiaries (including, without limitation, Subordinated Debt, the aggregate
principal amount of which does not exceed $250,000,000), determined as at such
date in accordance with GAAP; provided, however, that the effect of the
application of FASB ASC 320 (formerly known as FAS 115) shall be excluded when
computing Consolidated Net Worth.

“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.

“Control Agreement” means an agreement between the Borrower, Wells Fargo and the
Administrative Agent with respect to any deposit or securities account of the
Borrower in which a security interest is purported to be granted to the
Administrative Agent pursuant to the Security Agreement in form and substance
reasonably acceptable to the Administrative Agent.

“Corporate Debt Securities” means debt securities issued by Persons which are
domiciled in the United States or any State or other political subdivision
thereof and which are not individuals or governmental entities.

“Co-Syndication Agents” means, collectively, Bank of America, N.A., Regions Bank
and U.S. Bank National Association.

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

“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 (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used
with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus
2% per annum.

 

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“Defaulting Lender” means, subject to Section 5.15(b), any Lender that (a) has
failed to (i) fund all or any portion of the Revolving Loans, participations in
Letters of Credit, payment obligations under Several Letters of Credit or funded
participations in Swing Line Loans required to be funded by it hereunder within
two Business Days of the date such Loans or participations were required to be
funded hereunder unless such Lender notifies the Administrative Agent and the
Borrower in writing that such failure is the result of such Lender’s
determination that one or more conditions precedent to funding (each of which
conditions precedent, together with any applicable default, shall be
specifically identified in such writing) has not been satisfied, or (ii) pay to
the Administrative Agent, any Fronting Bank, the Swing Line Lender or any other
Lender any other amount required to be paid by it hereunder (including in
respect of its participation in Letters of Credit or Swing Line Loans) within
two Business Days of the date when due, (b) has notified the Borrower, the
Administrative Agent, any Fronting Bank or the Swing Line Lender in writing that
it does not intend to comply with its funding obligations hereunder, or has made
a public statement to that effect (unless such writing or public statement
relates to such Lender’s obligation to fund a Loan hereunder and states that
such position is based on such Lender’s determination that a condition precedent
to funding (which condition precedent, together with any applicable default,
shall be specifically identified in such writing or public statement) cannot be
satisfied), (c) has failed, within three Business Days after written request by
the Administrative Agent or the Borrower, to confirm in writing to the
Administrative Agent and the Borrower that it will comply with its prospective
funding obligations hereunder (provided that such Lender shall cease to be a
Defaulting Lender pursuant to this clause (c) upon receipt of such written
confirmation by the Administrative Agent and the Borrower), or (d) has, or has a
direct or indirect parent company that has, (i) become the subject of a
proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver,
custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or assets, including the FDIC or any other state or federal regulatory
authority acting in such a capacity; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender. Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under any one or more of clauses (a) through (d) above shall
be conclusive and binding absent manifest error, and such Lender shall be deemed
to be a Defaulting Lender (subject to Section 5.15(b)) upon delivery of written
notice of such determination to the Borrower, each Fronting Bank, the Swing Line
Lender and each Lender.

“Deposit Account” means a demand, time, savings, passbook or similar account
maintained by a Loan Party with Wells Fargo.

“Disposition” or “Dispose” 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.

 

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“Dividends” 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 Borrower or any Subsidiary.

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

“Eligible Collateral” means Cash, Listed Money Market Funds, Corporate Debt
Securities and U.S. Government Debt Securities, which (a) have the required
rating as set forth on Schedule 1.01, (b) are capable of being marked to market
on a daily basis and (c) are held in a Collateral Account.

“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 the Borrower, any other Loan Party or any of their
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, other than a net
profits based bonus program, 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 the 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 or 430 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the 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

 

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under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the
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 Sections
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 the
Borrower or any ERISA Affiliate.

“Eurodollar Rate” means a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:

 

Eurodollar Rate =   

LIBOR

   1.00-Eurodollar Reserve Percentage

“Eurodollar Rate Loan” means a Revolving Loan that bears interest at a rate
based on the Eurodollar Rate.

“Eurodollar Reserve Percentage” means, for any day, the percentage (expressed as
a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%)
which is in effect for such day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any basic, supplemental or emergency
reserves) in respect of Eurocurrency liabilities or any similar category of
liabilities for a member bank of the Federal Reserve System in New York City.

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

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, United States
federal withholding Taxes imposed on amounts payable to or for the account of
such Lender with respect to an applicable interest in a Loan or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Loan or Commitment (other than pursuant to an assignment request
by the Borrower under Section 10.13) or (ii) such Lender changes its lending
office, except in each case to the extent that, pursuant to Section 3.01,
amounts with respect to such Taxes were payable either to such Lender’s assignor
immediately before such Lender became a party hereto or to such Lender
immediately before it changed its lending office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 3.01(g) and (d) any United States
federal withholding Taxes imposed under FATCA.

“Existing Credit Agreement” has the meaning given to such term in the Recitals
to this Agreement.

 

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“Existing Lender” means any Person who was a “Lender” under, and as defined in,
the Existing Credit Agreement.

“Existing Lender Agreements” means Existing Lender Agreements substantially in
the form of Exhibit I.

“Existing Letters of Credit” means those letters of credit set forth on Schedule
2.03 and continued under this Agreement pursuant to Section 2.03.

“Existing Several Letters of Credit” has the meaning given to such term in
Section 2.03(n).

“Fair Market Value” means (a) with respect to any publicly traded security the
closing price for such security on the largest exchange on which such security
is traded (or if not traded on an exchange, then the average of the closing bid
and ask prices quoted over-the-counter) on the date of the determination (as
such prices are reported by the Depository Trust Company or if not so reported,
in any nationally recognized financial journal or newspaper), (b) with respect
to Cash, the amount thereof, and (c) with respect to any Eligible Collateral
(other than those set forth in clauses (a), and (b)), the price for such
Eligible Collateral on the date of calculation obtained from a generally
recognized source approved by the Administrative Agent or the most recent bid
quotation from such approved source (or, if no generally recognized source
exists as to a particular security, any other source selected in good faith by
the Administrative Agent or assigned to such security by the Administrative
Agent in accordance with its standard valuation procedures in effect at the
applicable time).

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day (or, if such day is not a Business Day, for the immediately preceding
Business Day), as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that if such rate is not so
published for any day which is a Business Day, the Federal Funds Rate for such
day shall be the average of the quotation for such day on such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by the Administrative Agent.

“Fee Letters” means, collectively, (a) the Wells Fargo Fee Letter, (b) the MLPFS
Fee Letter, (c) the Regions Fee Letter, (d) the US Bank Fee Letter and (e) the
letter agreement, dated June 11, 2014, among the Borrower, Wells Fargo, Wells
Fargo Securities, LLC, Bank of America, N.A., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Regions Bank, Regions Capital Markets, a division of Regions
Bank and U.S. Bank National Association.

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is
not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that
is resident or organized under the laws of a jurisdiction other than that in
which the Borrower is resident for tax purposes.

 

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

“Fronted Letter of Credit” means (a) a Letter of Credit issued by a Fronting
Bank in which the Lenders purchase a risk participation pursuant to Section 2.03
and (b) any Existing Letter of Credit designated as a Fronted Letter of Credit
on Schedule 2.03.

“Fronting Bank” means (a) in the case of Fronted Letters of Credit, any Lender
which has agreed at the Borrower’s request (and with notice to the
Administrative Agent) to issue one or more Fronted Letters of Credit (or Fronted
Letters of Credit up to a maximum stated amount) or any successor fronting bank
and (b) in the case of Several Letters of Credit, the Person described in clause
(a) who has agreed to act as fronting bank on behalf of any Participating Bank.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to each Fronting Bank, (i) such Defaulting Lender’s Applicable
Percentage of the outstanding L/C Obligations with respect to Fronted Letters of
Credit of such Fronting Bank other than L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof and (ii) if
such Defaulting Lender is a Participating Bank, such Defaulting Lender’s
Applicable Percentage of the outstanding L/C Obligations with respect to Several
Letters of Credit as to which such Fronting Bank has fronted for such Defaulting
Lender as a Participating Bank and (b) with respect to the Swing Line Lender,
such Defaulting Lender’s Applicable Percentage of Swing Line Loans other than
Swing Line Loans as to which such Defaulting Lender’s participation obligation
has been reallocated to other Lenders, repaid by the Borrower or for which Cash
Collateralization or other credit support acceptable to the Swing Line Lender
shall have been provided in accordance with the terms hereof.

“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.

“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,

 

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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). 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.

“Guaranteed Debt” has the meaning specified in Section 10.19(a).

“Guaranteed Parties” has the meaning specified in Section 10.19(b).

“Guaranty” means the provisions of Section 10.19 and the rights and the
obligations of the Borrower thereunder.

“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.

“Highest Lawful Rate” means at the particular time in question the maximum rate
of interest which, under Applicable Law, any Lender is then permitted to charge
on the Obligations. If the maximum rate of interest which, under Applicable Law,
any Lender is permitted to charge on the Obligations shall change after the date
hereof, the Highest Lawful Rate shall be automatically increased or decreased,
as the case may be, from time to time as of the effective time of each change in
the Highest Lawful Rate without notice to the Borrower.

“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;

 

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(c) net obligations of such Person under any Swap Contract (computed as set
forth below);

(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 sixty (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 leases and Synthetic Lease Obligations (computed as set forth
below);

(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.

With respect to the Borrower, solely for purposes of computations of the ratio
of Consolidated Indebtedness to Consolidated Capitalization, Indebtedness shall
expressly exclude any indebtedness of the Borrower arising under the Indentures.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. 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 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 (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
clause (a), Other Taxes.

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

“Indentures” means (i) the 2006 Indenture, and (ii) any other agreement between
the Borrower and a third Person with respect to the issuance of Subordinated
Debt.

“Information” has the meaning specified in Section 10.07.

 

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“Insurance Contract” means an insurance contract or reinsurance contract entered
into by a Ceding Company.

“Insurance Subsidiary” means any Subsidiary of the Borrower which is engaged in
the life, health or accident insurance business, including TMK.

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate 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 Eurodollar Rate 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 (including a Swing Line Loan), the last Business
Day of each March, June, September and December and the Maturity Date.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one (1), two (2), three (3), or
six (6) months thereafter, in each case as selected by the Borrower in its
Revolving Loan Notice and subject to availability; provided that:

(a) the Interest Period shall commence on the date of advance of or conversion
to any Eurodollar Rate Loan and, in the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the date on which the
immediately preceding Interest Period expires;

(b) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided that if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest
Period shall expire on the immediately preceding Business Day;

(c) any Interest Period with respect to a Eurodollar Rate Loan 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 relevant calendar month at the
end of such Interest Period;

(d) no Interest Period shall extend beyond the Maturity Date.

“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.

“IP Rights” has the meaning specified in Section 5.17.

“IRS” means the United States Internal Revenue Service.

 

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“ISP” means, with respect to any Letter of Credit, the International Standby
Practices (ISP 98), Publication 590.

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement or instrument entered into
by the Applicable Issuing Party and the applicable Loan Party (or any
Subsidiary) or in favor of the Applicable Issuing Party and relating to any such
Letter of Credit.

“Joint Arrangers” means Wells Fargo Securities, LLC, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Regions Capital Markets, a division of Regions Bank
and U.S. Bank National Association in their capacity as joint lead arrangers and
joint book runners.

“Junior Subordinated Debentures” means the 5.875% Junior Subordinated Debentures
due 2052 of the Borrower in the principal amount of $125,000,000.

“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.

“L/C Administrator” means Wells Fargo, acting as letter of credit administrator
for the Lenders, together with any replacement or successor L/C Administrator.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.

“L/C Advance Date” has the meaning specified in Section 2.03(c)(ii).

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

“L/C Issuer” means (a) with respect to any Fronted Letter of Credit, the
Fronting Bank which has issued such Letter of Credit and (b) with respect to a
Several Letter of Credit, each Lender other than a Participating Bank.

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be

 

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deemed to be “outstanding” in the amount so remaining available to be drawn. For
purposes of determining the L/C Obligations held by any Lender, a Lender shall
be deemed to hold an amount equal to the sum of (a) the aggregate amount of each
Lender’s direct obligation in all outstanding Several Letters of Credit (or, if
a Participating Bank, its risk participation in Several Letters of Credit),
(b) its risk participation in all outstanding Fronted Letters of Credit, and
(c) its L/C Borrowings.

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

“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 Borrower and the
Administrative Agent.

“Letter of Credit” means any letter of credit issued hereunder. Each Letter of
Credit shall be a standby letter of credit.

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the Applicable Issuing Party.

“Letter of Credit Expiration Date” means the day that is five (5) Business Days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.03(i).

“Letter of Credit Sublimit” means an amount equal to $250,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

“LIBOR” means,

(a) for any interest rate calculation with respect to a Eurodollar Rate Loan,
the rate of interest per annum determined on the basis of the rate for deposits
in Dollars for a period equal to the applicable Interest Period which appears on
Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately
11:00 a.m. (London time) two (2) London Banking Days prior to the first day of
the applicable Interest Period. If, for any reason, such rate does not appear on
Reuters Screen LIBOR01 Page (or any applicable successor page), then “LIBOR”
shall be determined by the Administrative Agent to be the arithmetic average of
the rate per annum at which deposits in Dollars would be offered by first class
banks in the London interbank market to the Administrative Agent at
approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the
first day of the applicable Interest Period for a period equal to such Interest
Period.

(b) for any interest rate calculation with respect to a Base Rate Loan, the rate
of interest per annum determined on the basis of the rate for deposits in
Dollars for an Interest Period equal to one month (commencing on the date of
determination of such interest rate) which appears on the Reuters Screen LIBOR01
Page (or any applicable successor page) at approximately 11:00 a.m. (London
time) on such date of determination, or, if such date is not a

 

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Business Day, then the immediately preceding Business Day. If, for any reason,
such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable
successor page) then “LIBOR” for such Base Rate Loan shall be determined by the
Administrative Agent to be the arithmetic average of the rate per annum at which
deposits in Dollars would be offered by first class banks in the London
interbank market to the Administrative Agent at approximately 11:00 a.m. (London
time) on such date of determination for a period equal to one month commencing
on such date of determination.

Each calculation by the Administrative Agent of LIBOR shall be conclusive and
binding for all purposes, absent manifest error.

“License” means any license, certificate of authority, permit or other
authorization which is required to be obtained from a Governmental Authority in
connection with the operation, ownership or transaction of insurance business.

“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, but excluding
(a) liens for taxes not yet due or which are being contested in good faith and
by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP, (b) carriers’, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other like liens arising the ordinary course of business which
are not overdue for a period of more than thirty (30) days or which are being
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person, (c) pledges or deposits in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other social
security legislation, other than any lien imposed by ERISA, (d) deposits to
secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business, and (e) easements,
rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, are not substantial in amount, and which do
not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of the
applicable Person).

“Listed Money Market Fund” means a money market fund that complies with the
criteria set forth in Securities and Exchange Commission Rule 2a-7 under the
Investment Company Act of 1940 and is rated AAA by S&P and Aaa by Moody’s.

“LNLIC” means Liberty National Life Insurance Company, a Nebraska insurance
company.

“Loan” means an extension of credit by a Lender to the Borrower under Article II
in form of a Revolving Loan or a Swing Line Loan.

 

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“Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee
Letters, each Compliance Certificate, each Revolving Loan Notice, each Swing
Line Loan Notice, any agreement creating or perfecting rights in Collateral
pursuant to the provisions of this Agreement, each Guaranty, each Control
Agreement, each Security Agreement and each amendment to any of the foregoing.

“Loan Parties” means, collectively, the Borrower and TMK.

“London Banking Day” means any day on which dealings in Dollar deposits are
conducted by and between banks in the London interbank Eurodollar market.

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

“Maturity Date” means (a) July 16, 2019 or (b) such earlier date as (i) the
Obligations become due and payable pursuant to this Agreement (whether by
acceleration, prepayment in full, scheduled reduction or otherwise) or
(ii) there shall exist an Event of Default under Section 8.01(f) of this
Agreement.

“MLPFS Fee Letter” means that certain letter agreement, dated as of June 11,
2014, among the Borrower, Bank of America, N.A. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.

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

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the 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.

“NAIC” means the National Association of Insurance Commissioners or any
successor thereto, or in lieu thereof, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissions and similar Governmental
Authorities of the various states of the United States of America toward the
promotion of uniformity in the practices of such Governmental Authorities.

“NAIC Approved Bank” means any bank listed on the most current list of banks
approved by the Securities Valuation Office of the NAIC and acting through the
branch so listed.

“Net Proceeds” means, with respect to the sale or issuance by the Borrower or
any of its Subsidiaries to any Person (other than to the Borrower or a
Wholly-Owned Subsidiary) of any Equity Interests, including any conversion of
debt securities into Equity Interests, the excess of (a) the gross proceeds from
such sale, issuance, or conversion over (b) all reasonable and customary
underwriting commissions and legal, investment banking, brokerage and accounting
and other professional fees and disbursements actually incurred in connection
with each such sale, issuance or conversion.

 

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“Nonrenewal Notice Date” has the meaning specified in Section 2.03(b)(iii).

“Notes” means the Revolving Loan Notes and the Swing Line Note.

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, 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 Loan Party 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 Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court, documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, any Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
Section 10.13).

“Outstanding Amount” means (i) with respect to Revolving Loans and Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Revolving Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the aggregate outstanding amount of
such L/C Obligations on such date after giving effect to any L/C Credit
Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any
reimbursements by the Borrower of Unreimbursed Amounts.

 

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

“Participating Bank” means, from time to time, with respect to any Several
Letter of Credit, a Lender that is unable to issue such Letter of Credit because
(a) it is unable to do so due to regulatory restrictions or other legal
impediments based on its relationship to the beneficiary or (b) it is not, or
has lost its status as, an NAIC Approved Bank (if such Letter of Credit must be
issued by NAIC Approved Banks).

“Participating Notice” means a written notice delivered by a Lender to the
Borrower, the Administrative Agent and the L/C Administrator to the effect that
such Lender is a Participating Bank with respect to any potential (or previously
issued but to be amended) Several Letter of Credit and stating the basis for
such status. If the basis for such status is that such Lender is not, or has
lost its status as, an NAIC Approved Bank, then (a) such notice shall be deemed
applicable to each subsequently issued Several Letter of Credit which must be
issued by NAIC Approved Banks until such notice has been withdrawn and (b) such
Lender shall promptly withdraw such notice (by subsequent written notice to the
parties named above) at such time, if ever, as such Lender has attained or
regained status as an NAIC Approved Bank.

“PBGC” means the Pension Benefit Guaranty Corporation.

“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 the Borrower or
any ERISA Affiliate or to which the Borrower 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.

“Permitted Acquisition” means the Acquisition of any Person which has been
approved and recommended by the board of directors (or the functional equivalent
thereof) of the Person being acquired.

“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 the 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.

“Preferred Securities” means, to the extent outstanding, collectively, the trust
preferred securities issued pursuant to the 2006 Indenture and any other trust
preferred securities issued in connection with any other Subordinated Debt.

“Prime Rate” means, at any time, the rate of interest per annum publicly
announced from time to time by Wells Fargo as its prime rate. Each change in the
Prime Rate shall be effective

 

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as of the opening of business on the day such change in such prime rate occurs.
The parties hereto acknowledge that the rate announced publicly by Wells Fargo
as its prime rate is an index or base rate and shall not necessarily be its
lowest or best rate charged to its customers or other banks.

“Property” means any interest of the Borrower or any Subsidiary in any kind or
property or asset, whether real, personal or mixed, or tangible or intangible.

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

“Quarterly Statement” means the quarterly statutory financial statement of any
Insurance Subsidiary required to be filed with the insurance commissioner (or
similar authority) of its jurisdiction of incorporation, which statement shall
be in the form required by such Insurance Subsidiary’s jurisdiction of
incorporation or, if no specific form is so required, in the form of financial
statements recommended by the NAIC to be used for filing quarterly statutory
financial statements and shall contain the type of information recommended by
the NAIC to be disclosed therein, together with all exhibits or schedules filed
therewith.

“Recipient” means (a) the Administrative Agent, (b) any Lender (including any
Swing Line Lender), (c) any L/C Issuer, (d) any Fronting Bank and (e) the L/C
Administrator, as applicable.

“Regions Fee Letter” means that certain letter agreement, dated as of June 11,
2014, among the Borrower, Regions Bank and Regions Capital Markets, a division
of Regions Bank.

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

“Reinsurance Contract” means a reinsurance contract between TMK, as reinsurer,
and a Ceding Company pursuant to which TMK, as reinsurer, assumes certain
liabilities of the Ceding Company with respect to one or more Insurance
Contracts.

“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.

“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.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Revolving Loans, a Revolving Loan Notice, (b) with respect to
an L/C Credit Extension, a Letter of Credit Application and (c) with respect to
a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and to issue Several Letters of Credit and the obligations of the
Fronting Banks to issue Fronted Letters of Credit have been terminated pursuant
to Section 8.02, Lenders holding in the aggregate more than 50% of the Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in L/C Obligations and Swing Line Loans being deemed

 

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“held” by such Lender for purposes of this definition); provided that the
Commitment of, and the portion of the Total Outstandings 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 officers, president, chief
financial officer, chief investment officer or treasurer of a Loan Party. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan
Party shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

“Restatement Effective Date” means the first date all the conditions precedent
in Section 4.01 are satisfied or waived in accordance with Section 10.01.

“Restricted Payment” means (a) any Dividend, (b) any Equity Interest repurchase
or redemption, and (c) any payment or prepayment of principal, interest, premium
or penalty in respect of any Indebtedness or any defeasance, redemption,
purchase, repurchase or other acquisition or retirement for value, in whole or
in part, of any Indebtedness.

“Revolving Borrowing” means a borrowing consisting of simultaneous Revolving
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Lenders pursuant to Section 2.01.

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

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

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

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

“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx,
or as otherwise published from time to time.

“Sanctioned Person” means (a) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC available at
http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx,
or as otherwise published from time to time, (b) a Person named on the lists
maintained by the United Nations Security Council available at
http://www.un.org/sc/committees/list_compend.shtml, or as otherwise published
from time to time, (c) a Person named on the lists maintained by the European
Union available at http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm, or
as otherwise published from time to time, (d) a Person named on the lists
maintained by Her Majesty’s Treasury available at
http://www.hm-treasury.gov.uk/fin_sanctions_index.htm, or as otherwise published
from time to time, or (e) (i) an agency of the government of a Sanctioned
Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a
person resident in a Sanctioned Country, to the extent subject to a sanctions
program administered by OFAC.

 

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“SAP” means, with respect to any Insurance Subsidiary, the statutory accounting
practices prescribed or permitted by the insurance commissioner (or other
similar authority) as of the date hereof in the jurisdiction of incorporation of
such Insurance Subsidiary for the preparation of annual statements and other
financial reports by insurance companies of the same type as such Insurance
Subsidiary.

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

“Secured L/C Obligations” means L/C Obligations with respect to Secured Letters
of Credit.

“Secured Letter of Credit” means a Letter of Credit issued at the request of a
Loan Party which has been designated as a “Secured Letter of Credit” in the
applicable Letter of Credit Application and which has not been redesignated as
an Unsecured Letter of Credit pursuant to Section 2.03(l).

“Security Agreement” means, individually and collectively, each security
agreement or other collateral document, each in form and substance satisfactory
to the Administrative Agent, entered into between the Administrative Agent and a
Loan Party pursuant hereto.

“Several Letter of Credit” means (a) a Letter of Credit issued severally by or
on behalf of the Lenders pursuant to which the Lenders are severally liable to
the beneficiary, which shall be substantially in the form of Exhibit E or in
such other form consistent with the proviso to Section 2.03(a)(iii)(D) as may be
agreed by the applicable Loan Party and the L/C Administrator and (b) any
Existing Letter of Credit designated as a Several Letter of Credit on Schedule
2.03.

“Significant Insurance Subsidiary” means any Significant Subsidiary which is an
Insurance Subsidiary, and shall in any event include Globe Life And Accident
Insurance Company, a Nebraska insurance company, LNLIC, United American
Insurance Company, a Nebraska insurance company, and AIL.

“Significant Subsidiary” of a Person means a “significant subsidiary” as defined
in Rule 1-02(v) of Regulation S-X of the Securities and Exchange Commission
(17 CFR Part 210). Unless otherwise expressly provided, all references herein to
a “Significant Subsidiary” shall mean a Significant Subsidiary of the Borrower.

“Solvent” means, with respect to any Person, as of any date of determination,
that the fair value of the assets of such Person (at fair valuation) is, on the
date of determination, greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such Person as of such date, that
the present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the probable
liability of such Person on its debts as such debts become absolute and matured,
and that, as of such date, such Person will be able to pay all liabilities of
such Person as such liabilities mature and such Person does not have
unreasonably small capital with which to carry on its business. In computing the
amount of contingent or unliquidated liabilities at any time, such liabilities
will be computed at the amount

 

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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 discounted to present value at rates believed to be reasonable
by such Person acting in good faith.

“Subordinated Debt” means, collectively, (i) the Junior Subordinated Debentures
and (ii) any other unsecured indebtedness of the Borrower (and not a Subsidiary)
which is subordinated by its terms to the prior payment in full of the
Obligations evidenced by this Agreement in a manner no less favorable to the
Lenders than the Junior Subordinated Debentures and which contain covenants that
are not less favorable to the Borrower than those contained in the Junior
Subordinated Debentures.

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which more than 50% of the
Equity Interests having ordinary voting power for the election of directors or
other governing body (other than Equity 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. Unless otherwise specified,
all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
Subsidiary or Subsidiaries of the Borrower.

“Substantial Portion” means, with respect to the Property of the Borrower and
its Subsidiaries, Property which (a) represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the beginning of the twelve-month period ending with the month in which such
determination is made, or (b) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and its
Subsidiaries as reflected in the financial statements referred to in clause (a)
above.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity 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 Obligations” means any and all obligations owed by any Loan Party to any
Lender or any Affiliate in respect of a Swap Contract.

 

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“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).

“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.04.

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

“Swing Line Lender” means Wells Fargo in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit F.

“Swing Line Note” means a promissory note made by the Borrower in favor of the
Swing Line Lender evidencing Swing Line Loans, substantially in the form of
Exhibit G.

“Swing Line Sublimit” means an amount equal to the lesser of (a) $35,000,000 and
(b) the Aggregate Commitments. The Swing Line Sublimit is part of, and not in
addition to, the Aggregate Commitments.

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

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

“TMK” has the meaning specified in the introductory paragraph hereto.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

“Type” means, with respect to a Revolving Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.

 

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“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 or 430 of the Code for the
applicable plan year.

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

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“Unsecured Letter of Credit” means a Letter of Credit which is not a Secured
Letter of Credit.

“US Bank Fee Letter” means that certain letter agreement, dated as of June 11,
2014, among the Borrower and U.S. Bank National Association.

“U.S. Government Debt Securities” means direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed by, the
United States (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States).

“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned thereto in
Section 3.01(g).

“Wells Fargo” means Wells Fargo Bank, National Association, a national banking
association, and its successors.

“Wells Fargo Fee Letter” means that certain letter agreement, dated as of
June 11, 2014, among the Borrower, Wells Fargo and Wells Fargo Securities, LLC.

“Withholding Agent” means any Loan Party and the Administrative Agent.

“Wholly-Owned Subsidiary” when used to determine the relationship of a
Subsidiary to a Person, means a Subsidiary all of the issued and outstanding
Equity Interests (other than directors’ qualifying shares) of which shall at the
time be owned by such Person or one or more of such Person’s Wholly-Owned
Subsidiaries or by such Person and one or more of such Person’s Wholly-Owned
Subsidiaries.

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
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)

 

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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.

(d) For purposes of Section 8.01(b), a breach of a financial covenant contained
in Section 7.11 shall be deemed to have occurred as of any date of determination
thereof by the Administrative Agent or as of the last day of any specified
measuring period, regardless of when the financial statements reflecting such
breach are delivered to the Administrative Agent and the Lenders.

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 or SAP, as
the case may be, 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 or SAP. If at any time any change in GAAP or SAP, as the
case may be, would affect the computation of any financial ratio or requirement
set forth in any Loan Document, and either the Borrower or the Required Lenders
shall so request, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP or SAP, as the case may
be, (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall

 

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continue to be computed in accordance with GAAP or SAP, as the case may be,
prior to such change therein and (ii) the Borrower 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 or SAP, as the case may be.

Notwithstanding the foregoing, for purposes of financial covenant calculations
under Section 7.11, Indebtedness (including Subordinated Debt accorded equity
treatment) shall be calculated without giving effect to The Financial Accounting
Standards Board Accounting Standards Codification 825.

1.04 Rounding. Any financial ratios required to be maintained by the Borrower
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, 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 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Central time (daylight or standard, as applicable).

1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of
a Letter of Credit at any time shall be deemed to be the stated amount of such
Letter of Credit in effect at such time; provided, however, that with respect to
any Letter of Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such Letter of Credit shall be deemed to be the
maximum stated amount of such Letter of Credit after giving effect to all such
increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Revolving Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a “Revolving Loan”) to
the Borrower 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, however, that after giving effect to any
Revolving Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of
any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Commitment. Within the limits of each Lender’s Commitment, and subject to the
other terms and conditions hereof, the Borrower 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 or Eurodollar Rate Loans, as further
provided herein.

 

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2.02 Borrowings, Conversions and Continuations of Revolving Loans.

(a) Each Revolving Borrowing, each conversion of Revolving Loans from one Type
to the other, and each continuation of Eurodollar Rate Loans shall be made upon
the 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 (3) Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of Eurodollar
Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and
(ii) on the Business Day of any Borrowing of Base Rate Loans. Each telephonic
notice by the 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
Borrower. Each Borrowing of, conversion to or continuation of Eurodollar Rate
Loans shall be in a principal amount of $2,000,000 or a whole multiple of
$1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and
2.04(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 the Borrower is requesting a Revolving Borrowing, a conversion of
Revolving Loans from one Type to the other, or a continuation of Eurodollar Rate
Loans, (ii) the requested date of the Borrowing, 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 Type of
Revolving Loans to be borrowed or to which existing Revolving Loans are to be
converted, and (v) if applicable, the duration of the Interest Period with
respect thereto. If the Borrower fails to specify a Type of Revolving Loan in a
Revolving Loan Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Revolving Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrower requests a Borrowing of, conversion to, or continuation
of Eurodollar Rate 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.

(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 if no timely notice of a conversion or
continuation is provided by the Borrower, the Administrative Agent shall 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 Borrowing,
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. on the Business Day specified in the
applicable Revolving Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.02 (and, if such Borrowing is the initial Credit
Extension, Section 4.01), the Administrative Agent shall make all funds so
received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Wells Fargo with the amount of such funds or (ii) wire transfer of such
funds, in each case in accordance with instructions

 

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provided to (and reasonably acceptable to) the Administrative Agent by the
Borrower; provided, however, that if, on the date the Revolving Loan Notice with
respect to such Borrowing is given by the Borrower, there are L/C Borrowings
outstanding, then the proceeds of such Borrowing, first, shall be applied to the
payment in full of any such L/C Borrowings, and second, shall be made available
to the Borrower as provided above.

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued
or converted only on the last day of an Interest Period for such Eurodollar Rate
Loan. During the existence of a Default, no Loans may be requested as, converted
to or continued as Eurodollar Rate Loans without the consent of the Required
Lenders.

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders
of the interest rate applicable to any Interest Period for Eurodollar Rate Loans
upon determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrower and the Lenders
of any change in Wells Fargo’s prime rate used in determining the Base Rate
promptly following the public announcement of such change.

(e) After giving effect to all Revolving Borrowings, all conversions of
Revolving Loans from one Type to the other, and all continuations of Revolving
Loans as the same Type, there shall not be more than six Interest Periods in
effect with respect to Revolving Loans.

2.03 Letters of Credit.

(a) The Letter of Credit Commitment.

(i) Subject to the terms and conditions set forth herein, (A) each Fronting Bank
agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.03, (1) from time to time on any Business Day during the Availability
Period, to issue Fronted Letters of Credit denominated in Dollars for the
account of any Loan Party, and to amend or extend Fronted Letters of Credit
previously issued by it, in accordance with subsection (b) below but in each
case solely to the extent it has separately and in its sole discretion agreed
with the Borrower to do so, and (2) to honor drawings under such Fronted Letters
of Credit; and the Lenders severally agree to participate in Fronted Letters of
Credit issued for the account of any Loan Party and any drawings thereunder; and
(B) each Lender severally agrees, (1) from time to time on any Business Day
during the Availability Period, to issue, extend and renew in such Lender’s
Applicable Percentage, Several Letters of Credit denominated in Dollars at the
request of and for the account of any Loan Party, in accordance with subsection
(b) below (except such Letters of Credit as to which it has advised the
Administrative Agent and, if applicable, the L/C Administrator that it is a
Participating Bank), and (2) to honor its Applicable Percentage of drawings
under the Several Letters of Credit and each Fronting Bank who has agreed to
front for a Participating Bank under Several Letters of Credit hereby agrees
that it shall be severally (and not jointly) liable for an amount equal to its
Applicable Percentage plus such Participating Bank’s Applicable Percentage under
each Several Letter of Credit and each

 

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Participating Bank hereby agrees to purchase a risk participation in the
obligations of the relevant Fronting Bank under any such Several Letter of
Credit in an amount equal to such Participating Bank’s Applicable Percentage;
provided that after giving effect to any L/C Credit Extension with respect to
any Letter of Credit, (w) the Total Outstandings shall not exceed the Aggregate
Commitments, (x) the aggregate Outstanding Amount of the Loans of any Lender,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing
Line Loans, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations shall not exceed such Lender’s Commitment, (y) the
Secured L/C Obligations shall not exceed the Borrowing Base, and (z) the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit. Each request by any Loan Party for the issuance or amendment of a
Letter of Credit shall be deemed to be a representation by such Loan Party that
the L/C Credit Extension so requested complies with the conditions set forth in
the proviso to the preceding sentence. Within the foregoing limits, and subject
to the terms and conditions hereof, the Loan Parties’ ability to obtain Letters
of Credit shall be fully revolving, and accordingly the Loan Parties may, during
the foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.

(ii) The Applicable Issuing Party shall not issue any Letter of Credit, if:

(A) subject to Section 2.03(b)(iii), the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of issuance or last
extension, unless the Required Lenders have approved such expiry date;

(B) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such
expiry date; or

(C) such Letter of Credit is to be denominated in a currency other than Dollars.

(iii) Neither any L/C Issuer nor the L/C Administrator shall be under any
obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain such Person from issuing such
Letter of Credit, or any Law applicable to such Person or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over such Person shall prohibit, or request that
such Person refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose

 

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upon such Person with respect to such Letter of Credit any restriction, reserve
or capital requirement (for which such Person is not otherwise compensated
hereunder) not in effect on the Restatement Effective Date, or shall impose upon
such Person any unreimbursed loss, cost or expense which was not applicable on
the Restatement Effective Date and which such Person in good faith deems
material to it;

(B) the issuance of such Letter of Credit would violate one or more policies of
such Person related to letters of credit generally;

(C) except as otherwise agreed by the Administrative Agent and the Applicable
Issuing Party, such Letter of Credit is in an initial stated amount less than
$100,000;

(D) in the case of a Several Letter of Credit, such Letter of Credit is not
substantially in the form of Exhibit E (provided that the Applicable Issuing
Party may agree to reasonable changes to such form, not adverse to the interests
of the Lenders, necessary to satisfy any then applicable requirements of the
applicable insurance regulators);

(E) only with respect to (1) a Fronted Letter of Credit or (2) a Several Letter
of Credit as to which such Defaulting Lender is a Participating Bank, any Lender
is at the applicable time a Defaulting Lender and the Fronting Bank has (or
after giving effect to the issuance of such Letter of Credit will have) Fronting
Exposure (after giving effect to Section 2.15(c)), unless the Fronting Bank has
entered into arrangements, including the delivery of Cash Collateral,
satisfactory to the Fronting Bank (in its sole discretion) with such Defaulting
Lender or the Borrower to eliminate the Fronting Bank’s Fronting Exposure (after
giving effect to Section 2.15 (c)) with respect to such Defaulting Lender
arising from either such Letter of Credit or such Letter of Credit and all other
L/C Obligations (including as Fronting Bank for a Participating Bank) as to
which the Fronting Bank has Fronting Exposure (after giving effect to
Section 2.15 (c)) as it may elect in its sole discretion; or

(F) such Letter of Credit contains any provisions for automatic reinstatement of
the stated amount after any drawing thereunder.

(iv) No Applicable Issuing Party shall amend any Letter of Credit if such
Applicable Issuing Party would not be permitted at such time to issue such
Letter of Credit in its amended form under the terms hereof.

(v) The Applicable Issuing Party shall be under no obligation to amend any
Letter of Credit if (A) the Applicable Issuing Party would have no obligation at
such time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.

(vi) The L/C Administrator is hereby authorized to execute and deliver each
Several Letter of Credit and each amendment to a Several Letter of Credit on
behalf of each Lender (unless such Lender has delivered a Participating Notice
which is applicable to such Several Letter of Credit and has not been
withdrawn).

 

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The L/C Administrator shall use the Applicable Percentage of an L/C Issuer under
each Several Letter of Credit provided that the applicable Fronting Bank for
such Participating Bank shall be severally (and not jointly) liable for an
amount equal to its Applicable Percentage plus the Applicable Percentage of each
Participating Bank. The L/C Administrator shall not amend any Several Letter of
Credit to change the “Commitment Shares” of a Lender or add or delete a Lender
liable thereunder unless such amendment is done in connection with an assignment
in accordance with Section 10.06, a change in the Lenders and/or the Applicable
Percentages as a result of any increase in the Aggregate Commitments pursuant to
Section 2.14 or any other addition or replacement of a Lender in accordance with
the terms of this Agreement or a change in status of a Lender as a Participating
Bank. Each Lender hereby irrevocably constitutes and appoints the L/C
Administrator its true and lawful attorney-in-fact for and on behalf of such
Lender with full power of substitution and revocation in its own name or in the
name of the L/C Administrator to issue, execute and deliver, as the case may be,
each Several Letter of Credit and each amendment to a Several Letter of Credit
and to carry out the purposes of this Agreement with respect to Several Letters
of Credit. Upon request, each Lender shall execute such powers of attorney or
other documents as any beneficiary of any Several Letter of Credit may
reasonably request to evidence the authority of the L/C Administrator to execute
and deliver such Several Letter of Credit and any amendment or other
modification thereto on behalf of the Lenders.

(vii) The Applicable Issuing Party shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents associated
therewith, and the Applicable Issuing Party shall have all of the benefits and
immunities (A) provided to the Administrative Agent in Article IX with respect
to any acts taken or omissions suffered by the Applicable Issuing Party in
connection with Letters of Credit issued by it or proposed to be issued by it
and Issuer Documents pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in Article IX included the Fronting Bank and
the L/C Administrator with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the Fronting Bank and the L/C
Administrator.

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal
Letters of Credit.

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the applicable Loan Party delivered to (x) a Fronting Bank, in
the case of Fronted Letters of Credit and (y) the L/C Administrator, in the case
of Several Letters of Credit (with a copy in each case to the Administrative
Agent) in the form of a Letter of Credit Application, appropriately completed
and signed by a Responsible Officer of such Loan Party. Such Letter of Credit
Application must be received by the Applicable Issuing Party and the
Administrative Agent not later than 11:00 a.m. at least two (2) Business Days
(or such later date and time as the Administrative Agent and the Applicable
Issuing Party may agree in a particular instance in their sole discretion) prior
to the proposed issuance date or date of amendment, as the case may be. In the
case of a

 

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request for an initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the Applicable
Issuing Party: (A) the name of the account party, which shall be the applicable
Loan Party; (B) the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (C) the amount thereof; (D) the expiry date
thereof; (E) the name and address of the beneficiary thereof; (F) the documents
to be presented by such beneficiary in case of any drawing thereunder; (G) the
full text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; (H) whether such Letter of Credit shall be an Auto-Renewal
Letter of Credit; (I) whether such Letter of Credit is to be a Fronted Letter of
Credit or a Several Letter of Credit (and, in the case of Several Letters of
Credit, in the event a Lender advises the L/C Administrator that such Lender is
a Participating Bank, such Participating Bank’s Applicable Percentage of such
Several Letter of Credit will be issued by the applicable Fronting Bank);
(J) whether such Letter of Credit will be a Secured Letter of Credit or an
Unsecured Letter of Credit; and (K) such other matters as the Applicable Issuing
Party may require. In the case of a request for an amendment of any outstanding
Letter of Credit, such Letter of Credit Application shall specify in form and
detail satisfactory to the Applicable Issuing Party (1) the Letter of Credit to
be amended; (2) the proposed date of amendment thereof (which shall be a
Business Day); (3) the nature of the proposed amendment; and (4) such other
matters as the Applicable Issuing Party may require. Additionally, the
applicable Loan Party shall furnish to the Applicable Issuing Party and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the Applicable Issuing Party or the Administrative Agent may
require.

(ii) Promptly after receipt of any Letter of Credit Application, the Applicable
Issuing Party will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of
Credit Application from a Loan Party and, if not, the Applicable Issuing Party
will provide the Administrative Agent with a copy thereof. Unless the Applicable
Issuing Party has received written notice from any Lender, the Administrative
Agent or any Loan Party, at least one Business Day prior to the requested date
of issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in Article IV shall not then be satisfied, then,
subject to the terms and conditions hereof, the Applicable Issuing Party shall,
on the requested date, issue a Letter of Credit for the account of such Loan
Party or enter into the applicable amendment, as the case may be, in each case
in accordance with the Applicable Issuing Party’s usual and customary business
practices. Immediately upon the issuance of each Fronted Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the issuing Fronting Bank a risk participation in such Fronted
Letter of Credit in an amount equal to the product of such Lender’s Applicable
Percentage times the amount of such Letter of Credit. Immediately upon the
issuance of a Several Letter of Credit in which a Fronting Bank has “fronted”
for a Participating Bank, such Participating Bank shall be deemed to, and hereby
irrevocably and unconditionally agrees to, without

 

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recourse or warranty, purchase from the issuing Fronting Bank a risk
participation in such Several Letter of Credit in an amount equal to the product
of such Participating Bank’s Applicable Percentage times the amount of such
Several Letter of Credit.

(iii) If either Loan Party so requests in any applicable Letter of Credit
Application, the Applicable Issuing Party may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic renewal
provisions (each, an “Auto-Renewal Letter of Credit”); provided that any such
Auto-Renewal Letter of Credit must permit the Applicable Issuing Party to
prevent any such renewal at least once in each twelve-month period (commencing
with the date of issuance of such Letter of Credit) by giving ninety (90) days’
(or such lesser number of days specified by the requesting Loan Party in its
Letter of Credit Application) prior notice to the beneficiary thereof (the
“Nonrenewal Notice Date”). Unless otherwise directed by the Applicable Issuing
Party, no Loan Party shall be required to make a specific request to the
Applicable Issuing Party for any such renewal. Once an Auto-Renewal Letter of
Credit has been issued, the Lenders shall be deemed to have authorized (but may
not require) the Applicable Issuing Party to permit the renewal of such Letter
of Credit at any time to an expiry date not later than the Letter of Credit
Expiration Date; provided, however, that the Applicable Issuing Party shall not
permit any such renewal if (A) the Applicable Issuing Party has determined that
it would not be permitted, or would have no obligation at such time, to issue
such Letter of Credit in its revised form (as extended) under the terms hereof
(by reason of the provisions of Section 2.03(a)(ii) or (iii) or otherwise), or
(B) it has received notice (which may be by telephone or in writing) on or
before the day that is two (2) Business Days before the Nonrenewal Notice Date
(1) from the Administrative Agent that the Required Lenders have elected not to
permit such renewal or (2) from the Administrative Agent, any Lender or any Loan
Party that one or more of the applicable conditions specified in Section 4.02
(other than the delivery by the Borrower of a Revolving Loan Notice) is not then
satisfied, and in each such case directing the Applicable Issuing Party not to
permit such extension.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the Applicable Issuing Party will also deliver to the Loan Party
requesting the issuance or amendment thereof and the Administrative Agent a true
and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing (a “Drawing Request”) under such Letter of Credit, the Applicable
Issuing Party shall notify the Loan Party for whose account such Letter of
Credit was issued and the Administrative Agent thereof. Not later than
11:00 a.m. on the date of any payment by the Applicable Issuing Party under a
Letter of Credit (each such date, an “Honor Date”), such Loan Party shall
reimburse the respective L/C Issuers through the Administrative Agent in

 

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immediately available funds in an amount equal to the amount of such drawing. If
such Loan Party fails to so reimburse the respective L/C Issuers by such time,
the Administrative Agent shall promptly notify each Lender of the Honor Date,
the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the
amount of such Lender’s Applicable Percentage thereof. In such event, the
Borrower shall be deemed to have requested a Revolving Borrowing of Base Rate
Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed
Amount, without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Commitments and the conditions set forth in
Section 4.02 (other than the delivery by the Borrower of a Revolving Loan
Notice). Any notice given by the Applicable Issuing Party or the Administrative
Agent pursuant to this Section 2.03(c)(i) may be given by telephone if
immediately confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.

(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make
immediately available funds available to the Administrative Agent for the
account of the Applicable Issuing Party at the Administrative Agent’s Office in
an amount equal to its Applicable Percentage of the Unreimbursed Amount not
later than 1:00 p.m. on the Honor Date specified in such notice by the
Administrative Agent (the “L/C Advance Date”), whereupon, subject to the
provisions of Section 2.03(c)(iii), each Lender that so makes immediately
available funds available shall be deemed to have made a Base Rate Loan to the
Borrower in such amount. The Administrative Agent shall remit the funds so
received to the Applicable Issuing Party. To the extent that immediately
available funds are received by the Administrative Agent from the Lenders (or
the Fronting Bank on behalf of a Participating Bank) with respect to a Several
Letter of Credit prior to 2:00 p.m. on the L/C Advance Date, the Administrative
Agent shall notify the L/C Administrator and the L/C Administrator shall
promptly make such funds available to the beneficiary of such Several Letter of
Credit on such date. To the extent that the L/C Administrator has not delivered
funds to any beneficiary of a Several Letter of Credit on behalf of a Lender on
the L/C Advance Date, because immediately available funds are received by the
Administrative Agent from such Lender: (A) after 2:00 p.m. on the L/C Advance
Date, the L/C Administrator shall make such funds available to such beneficiary
on the next Business Day; (B) prior to 2:00 p.m. on any Business Day after the
L/C Advance Date, the L/C Administrator shall make such funds available to such
beneficiary on such Business Day; and (C) after 2:00 p.m. on any Business Day
after the L/C Advance Date, the L/C Administrator shall make such funds
available to such beneficiary on the next Business Day following such Business
Day.

Unless the Administrative Agent or L/C Administrator receives notice from a
Lender prior to any L/C Advance Date with respect to a Several Letter of Credit
that such Lender will not make available as and when required hereunder to the
Administrative Agent the amount of such Lender’s L/C Advance on such L/C Advance
Date, the Administrative Agent and the L/C Administrator may assume that such
Lender has made such amount available to the Administrative

 

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Agent in immediately available funds on such L/C Advance Date and the L/C
Administrator may (but shall not be required), in reliance upon such assumption,
make available to the beneficiary of such Several Letter of Credit on such date
such Lender’s L/C Advance.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Revolving Borrowing of Base Rate Loans because the conditions set forth in
Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be
deemed to have incurred an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced (x) in the case of Fronted Letters of Credit,
from the issuing Fronting Bank and (y) in the case of Several Letters of Credit,
from the Lenders to the extent that they have provided funds with respect to
such Several Letter of Credit pursuant to Section 2.03(c)(ii), from the Fronting
Bank to the extent it has made funds available on behalf of a Participating Bank
or from the L/C Administrator to the extent it has made funds available on
behalf of a Lender pursuant to Section 2.03(c)(ii). L/C Advances shall be due
and payable on demand (together with interest) and shall bear interest at the
Default Rate. Each Lender’s or Participating Bank’s payment to the
Administrative Agent for the account of a Fronting Bank pursuant to
Section 2.03(c)(ii) shall be deemed payment in respect of its participation in
such L/C Advance and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this Section 2.03. Any
payment by the Borrower in respect of such L/C Advance shall be made to the
Administrative Agent and upon receipt applied by the Administrative Agent in
accordance with Section 2.03(d).

(iv) Until each Lender funds its Revolving Loan or L/C Advance pursuant to this
Section 2.03(c) to reimburse a Fronting Bank (or the L/C Administrator pursuant
to Section 2.03(c)(ii)) for any amount drawn under any Letter of Credit,
interest in respect of such Lender’s Applicable Percentage of such amount shall
be solely for the account of the relevant Fronting Bank or the L/C
Administrator, as applicable.

(v) Each Lender’s obligation to make Revolving Loans or L/C Advances to
reimburse the relevant Fronting Bank (or the L/C Administrator pursuant to
Section 2.03(c)(ii)) for amounts drawn under Letters of Credit, as contemplated
by 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
Administrative Agent, any Fronting Bank, the L/C Administrator, any Lender, any
Borrower, any beneficiary named in any Letter of Credit, any transferee of any
Letter of Credit (or any Persons for whom any such transferee may be acting) or
any other Person for any reason whatsoever, (B) the occurrence or continuance of
a Default, (C) any lack of validity or enforceability of such Letter of Credit,
this Agreement or any other Loan Document, (D) 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, (E) the surrender or impairment of
any security for the performance or observance of any of the terms of the Loan

 

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Documents, or (F) 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 4.02 (other than delivery by the Borrower
of a Revolving Loan Notice). No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Loan Parties to reimburse the respective
L/C Issuers for the amount of any payment made by the respective L/C Issuers
under any Letter of Credit, together with interest as provided herein.

(vi) If any Lender fails to make available to the Administrative Agent for the
account of a Fronting Bank or to the L/C Administrator 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)(ii), such Fronting Bank or the L/C
Administrator, as the case may be (acting through the Administrative Agent,
which shall promptly remit to the applicable party amounts recovered for its
account), shall be entitled to recover from such Lender, 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 such Fronting Bank or
the L/C Administrator, as the case may be, at a rate per annum equal to the
greater of the Federal Funds Rate and a rate determined by the applicable L/C
Issuer in accordance with banking industry rules on interbank compensation, plus
any administrative, processing or similar fees customarily charged by the
Fronting Bank or the L/C Administrator in connection with the foregoing. A
certificate of such Fronting Bank or the L/C Administrator, as the case may be
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest error.

(d) Repayment of Participations.

(i) At any time after the Applicable Issuing Party has made a payment under any
Letter of Credit and has received from any Lender such Lender’s L/C Advance in
respect of such payment in accordance with Section 2.03(c), if the
Administrative Agent receives any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from a Loan Party or otherwise,
including proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Lender its Applicable
Percentage thereof (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender’s L/C Advance was
outstanding) and in Dollars in the same funds as those received by the
Administrative Agent.

(ii) If any payment received by the Administrative Agent pursuant to
Section 2.03(c)(i) is required to be returned under any of the circumstances
described in Section 10.05 (including pursuant to any settlement entered into by
the applicable Fronting Bank or the L/C Administrator in its discretion), each
Lender shall pay to the Administrative Agent for the account of such Fronting
Bank or L/C Administrator its Applicable Percentage thereof on demand of the

 

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Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

(e) Obligations Absolute. The obligation of each Loan Party to reimburse the
respective L/C Issuers for each drawing under each Letter of Credit issued for
its account and to repay each related L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;

(ii) the existence of any claim, counterclaim, setoff, defense or other right
that the Borrower or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Applicable Issuing Party
or any L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction;

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

(iv) any payment by the Applicable Issuing Party under such Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit; or any payment made by the Applicable
Issuing Party under such Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Law; or

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

The Loan Party who shall have requested a Letter of Credit or an amendment
thereto shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with such Loan Party’s instructions or other irregularity, such
Loan Party will immediately notify the Applicable Issuing Party. The applicable
Loan Party shall be conclusively deemed to have waived any such claim against
the Applicable Issuing Party and its correspondents unless such notice is given
as aforesaid.

 

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(f) Role of Applicable Issuing Party. Each Lender and the Loan Parties agree
that, in paying any drawing under a Letter of Credit, the Applicable Issuing
Party shall not have any responsibility to obtain any document (other than any
sight draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document. None of the Applicable Issuing Parties, the Lenders, the
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of an Applicable Issuing Party shall be
liable to any Lender for (i) any action taken or omitted in connection herewith
at the request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross negligence
or willful misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Loan Parties hereby assume all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any Letter
of Credit; provided, however, that this assumption is not intended to, and shall
not, preclude any Loan Party’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the Applicable Issuing Parties, the Lenders, the Administrative Agent, any of
their respective Related Parties nor any correspondent, participant or assignee
of an Applicable Issuing Party shall be liable or responsible for any of the
matters described in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses or otherwise in this subsection (f) to
the contrary notwithstanding, the Loan Parties may have a claim against an L/C
Issuer and/or an Applicable Issuing Party and an L/C Issuer and/or an Applicable
Issuing Party may be liable to the Loan Parties, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Loan Parties which the Loan Parties prove were caused by such
L/C Issuer’s and/or the Applicable Issuing Party’s willful misconduct or gross
negligence or such L/C Issuer’s or Applicable Issuing Party’s willful failure to
pay under any Letter of Credit after the presentation to it by the beneficiary
of a sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of the
foregoing, the Applicable Issuing Party may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and neither the
Applicable Issuing Party nor any Lender shall be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.

(g) Cash Collateral. (i) Upon the request of the Administrative Agent, (A) if an
L/C Issuer has honored any full or partial drawing request under any Letter of
Credit and such drawing has resulted in an L/C Borrowing, or (B) if, as of the
Letter of Credit Expiration Date, any L/C Obligation for any reason remains
outstanding, the Loan Parties shall, in each case, immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations.

 

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(ii) Sections 2.05(c) and 8.02(c) set forth certain requirements to deliver Cash
Collateral in addition to those set forth in Section 2.03(g)(i). For purposes of
this Section 2.03, Section 2.05 and Section 8.02(c), “Cash Collateralize” means
to pledge and deposit Cash with or deliver Cash to the Administrative Agent, for
the benefit, as applicable, of the Fronting Banks, L/C Issuers or the Lenders,
as collateral for the L/C Obligations, or obligations of the Fronting Bank or
Lenders to fund or fund participations in respect of Letters of Credit, to
documentation in form and substance satisfactory to the Administrative Agent,
the Fronting Banks and the L/C Issuers (which documents are hereby consented to
by the Lenders) Derivatives of such term have corresponding meanings. The Loan
Parties hereby grant to the Administrative Agent, for the benefit of the
Fronting Banks, L/C Issuers and the Lenders, a security interest in all such
cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash Collateral delivered pursuant to this Section 2.03(g),
Section 2.05(c) or Section 8.02(c) shall be maintained in blocked, non-interest
bearing deposit accounts at Wells Fargo.

(h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the
Applicable Issuing Party and the applicable Loan Party when a Letter of Credit
is issued the rules of the Uniform Customs and Practice for Documentary Credits
(UCP 600), as most recently published by the International Chamber of Commerce
at the time of issuance, or the ISP, as applicable, shall apply to such Letter
of Credit.

(i) Letter of Credit Fees. Each Loan Party shall pay to the Administrative Agent
for the account of each Lender in accordance with its Applicable Percentage, in
Dollars, a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of
Credit issued for such Loan Party’s account equal to (i) in the case of
Unsecured Letters of Credit, the Applicable Rate (calculated per day) times the
daily amount available to be drawn under such Unsecured Letter of Credit and
(ii) in the case of Secured Letters of Credit, 0.50% per annum (calculated per
day) times the daily amount available to be drawn under such Secured Letter of
Credit. For purposes of computing the daily amount available to be drawn under
any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.06. Letter of Credit Fees shall be (i) computed on a
quarterly basis in arrears and (ii) due and payable on the first Business Day
after the end of each March, June, September and December, commencing with the
first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. If there is any
change in the Applicable Rate during any quarter, the daily amount available to
be drawn under each Letter of Credit shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect. Notwithstanding anything to the contrary
contained herein, upon the request of the Required Lenders, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(j) Fronting Fee and Documentary and Processing Charges Payable to Fronting
Bank. Each Loan Party shall pay directly to each Fronting Bank for its own
account, a fronting fee with respect to each Fronted Letter of Credit issued for
such Loan Party’s account by such Fronting Bank, at the rate per annum agreed to
between the Borrower and such Fronting Bank, calculated based on the daily
amount available to be drawn under such Letter of Credit on a quarterly basis in
arrears, and due and payable on the first Business Day after the end of each
March, June, September and December,

 

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commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on demand (it
being understood that each Fronting Bank will invoice the Loan Parties directly
for amounts due under this Section 2.03(j)). For purposes of computing the daily
amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.06. In
addition, the Loan Parties shall pay directly to the Applicable Issuing Party,
for its own account, the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the Applicable Issuing
Party relating to letters of credit as from time to time in effect. Such
customary fees and standard costs and charges are due and payable on demand and
are nonrefundable.

(k) Several L/C Fronting Fee. The applicable Fronting Bank shall be paid a
fronting fee (the “Several L/C Fronting Fee”) computed on the risk participation
purchased by each Participating Bank from such Fronting Bank with respect to
each Several Letter of Credit at the rate per annum agreed among such
Participating Bank, the Fronting Bank and the Loan Parties. Such fee (or
portions thereof, as applicable) shall be payable by the Participating Bank
and/or the Loan Parties as may be agreed. Unless otherwise agreed among, as
applicable, a Loan Party, the Fronting Bank, the Participating Bank and the
Administrative Agent, the Several L/C Fronting Fee shall be paid quarterly in
arrears and each Fronting Bank will invoice the applicable party or parties for
any Several L/C Fronting Fees owed to it.

(l) Redesignation of Letters of Credit. Each Loan Party may from time to time,
in its sole discretion, but subject to the provisions of this Section, elect to
redesignate as an Unsecured Letter of Credit a Letter of Credit which was
initially issued as a Secured Letter of Credit issued for such Loan Party’s
account. Such redesignation shall be accomplished by the delivery of written
notice from such Loan Party to the Administrative Agent at least five
(5) Business Days in advance of the date upon which such redesignation is
requested to become effective, which notice shall identify the applicable Letter
of Credit, shall certify that no Default has occurred and is continuing and
shall contain such other information and be in such form as the Administrative
Agent may reasonably request. The Administrative Agent shall give prompt notice
of its receipt of any such request to the Lenders. The Administrative Agent, in
reliance upon such request and certification shall (unless any Lender shall have
notified the Administrative Agent in writing that a Default exists) release from
the Collateral Account Eligible Collateral having in the aggregate Adjusted Fair
Market Value equal or approximately equal to the amount of L/C Obligations
associated with such Letter of Credit; provided, however, that in no event shall
the Administrative Agent release Eligible Collateral to the extent that, after
giving effect to such release, the Borrowing Base would be less than the amount
of outstanding Secured L/C Obligations. From and after the date of such release,
the applicable Letter of Credit shall be deemed to be an Unsecured Letter of
Credit for all purposes hereof, including without limitation for purposes of
determining the amount of the Letter of Credit Fee payable with respect thereto
pursuant to Section 2.03(i).

(m) Conflict with Issuer Documents. In the event of any conflict between the
terms hereof and the terms of any Issuer Document, the terms hereof shall
control.

 

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(n) Existing Letters of Credit. The Loan Parties, the L/C Administrator and the
Lenders agree that, as of the Restatement Effective Date, each Existing Letter
of Credit described on Schedule 2.03 which is a Several Letter of Credit issued
for the account of any Loan Party under the Existing Credit Agreement and which
remains outstanding as of the Restatement Effective Date (as amended as
contemplated by Section 4.01(g)) shall (A) be deemed issued and continued under
this Agreement as of the Restatement Effective Date as a “Several Letter of
Credit” all as set forth on such schedule and (B) shall constitute a “Several
Letter of Credit” for all purposes hereof.

(o) Upon a Lender becoming a Participating Bank, it shall (i) promptly deliver a
Participating Notice to the Borrower, the Administrative Agent and the L/C
Administrator and (ii) use its commercially reasonable efforts to cause a Lender
which is not a Participating Bank to act as a Fronting Bank for such
Participating Bank with respect to Several Letters of Credit.

2.04 Swing Line Loans.

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Lenders
set forth in this Section 2.04, to make loans (each such loan, a “Swing Line
Loan”) to the Borrower 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 Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Applicable Percentage of the Outstanding
Amount of Revolving Loans and L/C Obligations of the Lender acting as Swing Line
Lender, may exceed the amount of such Lender’s Commitment; provided, however,
that after giving effect to any Swing Line Loan, (i) the Total Outstandings
shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding
Amount of the Revolving Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Commitment, and provided, further, that the Borrower
shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrower may borrow under this Section 2.04, prepay under
Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall
be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender’s Applicable Percentage times
the amount of such Swing Line Loan.

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $250,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing

 

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Line Lender and the Administrative Agent of a written Swing Line Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower.
Promptly after receipt by the Swing Line Lender of any telephonic Swing Line
Loan Notice, the Swing Line Lender will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has also received
such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the
Administrative Agent (by telephone or in writing) of the contents thereof.
Unless the Swing Line Lender has received notice (by telephone or in writing)
from the Administrative Agent (including at the request of any Lender) prior to
2:00 p.m. on the date of the proposed Swing Line Borrowing (A) directing the
Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the proviso to the first sentence of Section 2.04(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 Swing
Line Lender will, not later than 3:00 p.m. on the borrowing date specified in
such Swing Line Loan Notice, make the amount of its Swing Line Loan available to
the Borrower at its office by crediting the account of the Borrower on the books
of the Swing Line Lender in immediately available funds.

(c) Refinancing of Swing Line Loans.

(i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrower (which hereby irrevocably authorizes the
Swing Line Lender to so request on its behalf), that each Lender make a Base
Rate Loan in an amount equal to such Lender’s Applicable Percentage of the
amount of Swing Line 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, but subject to the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02. The Swing
Line Lender shall furnish the 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 Swing Line 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 2.04(c)(ii), each
Lender that so makes funds available shall be deemed to have made a Base Rate
Loan to the Borrower in such amount. The Administrative Agent shall remit the
funds so received to the Swing Line Lender.

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Revolving Borrowing in accordance with Section 2.04(c)(i), the request for Base
Rate Loans submitted by the Swing Line Lender as set forth herein shall be
deemed to be a request by the Swing Line Lender that each of the Lenders fund
its risk participation in the relevant Swing Line Loan and each Lender’s payment
to the Administrative Agent for the account of the Swing Line Lender pursuant to
Section 2.04(c)(i) shall be deemed payment in respect of such participation.

 

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(iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line 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 Swing
Line Lender at a rate per annum equal to the greater of the Federal Funds Rate
and a rate determined by the Swing Line Lender in accordance with banking
industry rules on interbank compensation. A certificate of the Swing Line 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.

(iv) Each Lender’s obligation to make Revolving Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.04(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 Swing Line Lender, the Borrower 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 2.04(c) is subject to the
conditions set forth in Section 4.02. No such funding of risk participations
shall relieve or otherwise impair the obligation of any Borrower to repay Swing
Line 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 Swing Line Loan, if the Swing Line Lender receives any payment on account
of such Swing Line Loan, the Swing Line Lender will distribute to such Lender
its Applicable Percentage of such payment (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
risk participation was funded) in the same funds as those received by the Swing
Line Lender.

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line 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 Swing Line Lender. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

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(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrower for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Loan or risk participation pursuant to
this Section 2.04 to refinance such Lender’s Applicable Percentage of any Swing
Line Loan, interest in respect of such Applicable Percentage shall be solely for
the account of the Swing Line Lender.

(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments
of principal and interest in respect of the Swing Line Loans directly to the
Swing Line Lender.

(g) Defaulting Lenders. Notwithstanding anything to the contrary contained in
this Section 2.04, the Swing Line Lender shall not be obligated to make any
Swing Line Loan at a time when (i) any other Lender is a Defaulting Lender and
(ii) the Swing Line Lender has (or after giving effect to the making of such
Swing Line Loan would have) Fronting Exposure (after giving effect to
Section 2.15(c)), unless the Swing Line Lender has entered into arrangements
(which may include Cash Collateralization) with the Borrower or such Defaulting
Lender which are satisfactory to the Swing Line Lender to eliminate the Swing
Line Lender’s Fronting Exposure (after giving effect to Section 2.15(c)) with
respect to any such Defaulting Lender.

2.05 Prepayments.

(a) The Borrower 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 (3) Business Days prior
to any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $2,000,000 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
Type(s) of Revolving Loans to be prepaid. 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
the Borrower, the 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 Eurodollar Rate 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 Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line 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

 

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minimum principal amount of $250,000 or in such lesser principal amount as may
be outstanding. Each such notice shall specify the date and amount of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.

(c) If for any reason the Total Outstandings at any time exceed the Aggregate
Commitments then in effect, the Borrower shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided, however, that the Borrower shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless after
the prepayment in full of the Loans the Total Outstandings exceed the Aggregate
Commitments then in effect.

2.06 Termination or Reduction of Commitments. The Borrower may, upon notice to
the Administrative Agent, terminate the Aggregate Commitments, or from time to
time permanently reduce the Aggregate Commitments; 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 $10,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Outstandings would exceed
the Aggregate Commitments, and (iv) if, after giving effect to any reduction of
the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line
Sublimit exceeds the amount of the Aggregate Commitments, such sublimit shall be
automatically reduced by the amount of such excess. 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 Commitments 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 Borrower shall repay to the Lenders on the Maturity Date the aggregate
principal amount of Revolving Loans outstanding on such date.

(b) The Borrower shall repay each Swing Line Loan on the earlier to occur of
(i) the date seven (7) days after such Loan is made and (ii) the Maturity Date.

2.08 Interest.

(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to the lesser of (x) the Highest
Lawful Rate and (y) the Eurodollar Rate for such Interest Period plus the
Applicable Rate; (ii) each Base Rate Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per annum
equal to the lesser of (x) the Highest Lawful Rate and (y) the Base Rate plus
the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the lesser of (x) the Highest Lawful Rate and (y) the
Base Rate plus the Applicable Rate.

 

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(b) (i) If any amount of principal of any Loan is not paid when due, 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
lesser of (x) the Default Rate and (y) the Highest Lawful Rate, to the fullest
extent permitted by Applicable Law.

(ii) If any amount (other than principal of any Loan) payable by the Borrower
under any Loan Document is not paid when due, 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 lesser of (x) the Default Rate and (y) the Highest
Lawful Rate, to the fullest extent permitted by Applicable Law.

(iii) Upon the request of the Required Lenders, while any Event of Default
exists, the Borrower 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 lesser of (x) the Default Rate and (y) the Highest Lawful
Rate, to the fullest extent permitted by Applicable Law.

(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. In addition to certain fees described in subsections (i) and (j) of
Section 2.03:

(a) Facility Fee. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a facility
fee (“Facility Fee”) equal to the Applicable Rate (calculated per day) times the
actual daily amount of the Aggregate Commitments (or, if the Aggregate
Commitments have terminated, on the Outstanding Amount of all Revolving Loans,
Swing Line Loans and L/C Obligations), regardless of usage. The Facility Fee
shall accrue at all times during the Availability Period (and thereafter so long
as any Revolving Loans, Swing Line Loans or L/C Obligations remain outstanding),
including at any time during which one or more of the conditions in Article IV
is not met, 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 Restatement Effective Date, and on the
Maturity Date (and, if applicable, thereafter on demand). The Facility Fee shall
be calculated quarterly in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.

 

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(b) Other Fees.

(i) The Borrower shall pay to the Joint Arrangers and the Administrative Agent
for their own respective accounts fees in the amounts and at the times specified
in the Fee Letters. Such fees shall be fully earned when paid and shall not be
refundable for any reason whatsoever.

(ii) The Borrower 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 when the Base Rate is determined by Wells Fargo’s “prime rate” shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
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 Credit Extensions 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 Credit Extensions made by the Lenders to the Loan Parties
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
Loan Parties 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 Borrower 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, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.

(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

 

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accounts or records evidencing the purchases and sales by such Lender of
participations in Letters of Credit and Swing Line 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 the Loan Parties shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff. All
payments by the Loan Parties hereunder 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 Dollars and in immediately
available funds not later than 2:00 p.m. on the date specified herein. The
Administrative Agent will promptly distribute to each Lender its Applicable
Percentage (or other applicable share as provided herein) of payment with
respect to principal and interest on Loans in like funds as received by wire
transfer to such Lender’s Lending Office. All payments received by the
Administrative Agent after 2:00 p.m., 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 the 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.

(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 Revolving Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Revolving
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Revolving Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent 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 Borrower 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 and (B) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower 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
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Revolving Borrowing to the
Administrative Agent, then the amount so paid shall constitute such Lender’s
Revolving Loan included in such Revolving Borrowing. Any payment by the Borrower
shall be without prejudice to any claim the Borrower may have against a Lender
that shall have failed to make such payment to the Administrative Agent.

 

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(ii) Payments by Loan Parties; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from any Loan Party prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders, a Fronting Bank or an L/C Issuer that the Loan Parties will not
make such payment, the Administrative Agent may assume that the Loan Parties
have made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders, such Fronting Bank or such L/C
Issuer, as the case may be, the amount due. In such event, if the Loan Parties
have not in fact made such payment, then each of the Lenders, Fronting Banks and
L/C Issuers, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Person, 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 a Loan Party 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 Borrower by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Revolving Loans, to fund Several Letters of Credit, to purchase and fund
participations in Fronted Letters of Credit and Swing Line 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 Several Letter of Credit, to
purchase and fund such participations 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 L/C Obligations or in Swing Line Loans held by it resulting in
such Lender’s receiving payment of a proportion of the

 

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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) participations in
the Revolving Loans and subparticipations in L/C Obligations and Swing Line
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 or on behalf of the Loan Parties pursuant to and in accordance
with the express terms of this Agreement (including the application of funds
arising from the existence of a Defaulting Lender), (y) the application of Cash
Collateral provided for in Section 2.15, (z) 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 L/C Obligations or Swing Line Loans to
any assignee or participant, other than an assignment to the Borrower or any
Subsidiary thereof (as to which the provisions of this Section shall apply).

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

2.14 Increase in Commitments.

(a) Request for Increase. Provided there exists no Default or Event of Default,
upon notice to the Administrative Agent, the Borrower may from time to time
request an increase in the Aggregate Commitments by an amount (for all such
requests) not exceeding $250,000,000; provided that (i) any such request for an
increase shall be in a minimum amount of $25,000,000 and (ii) the Borrower may
make a maximum of two such requests in any calendar year.

(b) Proposed Lenders. Any proposed increase in the Aggregate Commitment may be
requested from existing Lenders, new prospective lenders (which are Persons
which would be permitted to be assignees pursuant to Section 10.06 and are
approved by the Administrative Agent, the L/C Administrator and the Swing Line
Lender, which approvals shall not be unreasonably withheld), or a combination
thereof, as selected by, and with such allocations of committed amounts as may
be determined by, the lead arranger(s) thereof and/or the Borrower, provided
that any incremental Commitment provided by a Person not already a Lender shall
be in a principal amount of $5,000,000 or an integral multiple of $500,000 in
excess thereof. Any Lender approached to provide all or a portion of the
incremental Commitment may elect or decline, in its sole discretion, to provide
an incremental Commitment.

 

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(c) Notification by Administrative Agent; Additional Lenders. If the Aggregate
Commitments are to be increased in accordance with this Section, the
Administrative Agent and the Borrower shall determine the effective date (the
“Increase Effective Date”) and the final allocation of such increase. The
Administrative Agent shall promptly notify the Borrower and the Lenders of the
final allocation of such increase and the Increase Effective Date. As of the
Increase Effective Date, the Credit Agreement shall be amended to reflect the
new or incremental Commitments of the Lenders or other Persons providing such
incremental Commitments. Such amendment shall be executed and delivered by the
Administrative Agent, the Loan Parties and each Lender and other Person
providing such incremental Commitments without the consent of any other party
and shall be binding on all parties hereto. Such amendment shall be in form and
substance reasonably satisfactory to the Administrative Agent.

(d) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate
of each Loan Party dated as of the Increase Effective Date (in sufficient copies
for each Lender) signed by a Responsible Officer of such Loan Party
(i) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (ii) in the case of the Borrower,
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. Any increase of
the Aggregate Commitment pursuant to this Section shall also be subject to
receipt by the Administrative Agent from the Loan Parties of such supplemental
certificates and other customary documents as the Administrative Agent may
reasonably request.

(e) Reallocation Upon Increase. On the Increase Effective Date the outstanding
Revolving Loans and Applicable Percentages of Swing Line Loans and L/C
Obligations will be reallocated by the Administrative Agent among the Lenders
(including any new Lenders) in accordance with their revised Applicable
Percentages (and the Lenders (including any new Lenders) agree to make all
payments and adjustments necessary to effect such reallocation and the Borrower
shall pay any and all costs required pursuant to Section 3.05 in connection with
such reallocation as if such reallocation were a repayment).

(f) Revised Percentages and Letter of Credit Amendments. The Administrative
Agent shall promptly notify the Lenders of the new Applicable Percentages after
giving effect to each increase in the Aggregate Commitments pursuant hereto.
Promptly after the date of each such increase, the L/C Administrator shall amend
the outstanding Several Letters of Credit to reflect the new “Commitment Share”
of each

 

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Lender (including any new Lenders) and prior to the date a Several Letter of
Credit has been amended to give effect to such new “Commitment Share”, each new
Lender shall be deemed to irrevocably and unconditionally purchase from each
Lender who has issued such Several Letter of Credit, a risk participation in
such Several Letter of Credit in an amount such that after giving effect to such
purchase, each Lender (including any new Lender) has its Applicable Percentage
of such Several Letter of Credit.

(g) Conflicting Provisions. This Section shall supersede any provisions in
Sections 2.13 or 10.01 to the contrary.

2.15 Defaulting Lenders.

Notwithstanding anything to the contrary contained in this Agreement, if any
Lender becomes a Defaulting Lender, then, until such time as such Lender is no
longer a Defaulting Lender, to the extent permitted by applicable law:

(a) Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 10.1.

(b) Reallocation of Payments. Any payment of principal, interest, fees or other
amounts received by the Administrative Agent for the account of such Defaulting
Lender (whether voluntary or mandatory, at maturity, or otherwise, and including
any amounts made available to the Administrative Agent for the account of such
Defaulting Lender pursuant to Section 10.4), shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment on a pro rata basis of any amounts owing by such Defaulting Lender to
the Administrative Agent or L/C Administrator hereunder; second, to the payment
on a pro rata basis of any amounts owing by such Defaulting Lender (including
amounts owed in its capacity as a Participating Bank) to the Fronting Banks
and/or the Swing Line Lender hereunder; third, if so determined by the
Administrative Agent or requested by a Fronting Bank and/or the Swing Line
Lender, to be held as Cash Collateral for future funding obligations of such
Defaulting Lender of any participation in any Swing Line Loan or Fronted Letter
of Credit or Several Letter of Credit as to which it is a Participating Bank;
fourth, as the Borrower may request (so long as no Default exists), to the
funding of any Loan or Cash Collateralization of any Several Letter of Credit in
respect of which such Defaulting Lender has failed to fund its portion thereof
as required by this Agreement, as determined by the Administrative Agent; fifth,
if so determined by the Administrative Agent and the Borrower, to be held in a
non-interest bearing deposit account and released in order to satisfy
obligations of such Defaulting Lender to fund Loans or Several Letters of Credit
under this Agreement; sixth, to the payment of any amounts owing to the
Administrative Agent, the Lenders, the Fronting Banks or the Swing Line Lender
as a result of any judgment of a court of competent jurisdiction obtained by the
Administrative Agent, any Lender, any Fronting Bank or the Swing Line Lender
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; seventh, so long as no Default exists, to
the payment of any amounts owing to the Borrower as a result of any judgment of
a court of competent jurisdiction obtained by the Borrower against such
Defaulting Lender as a result of such Defaulting Lender’s breach

 

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of its obligations under this Agreement; and eighth, to such Defaulting Lender
or as otherwise directed by a court of competent jurisdiction; provided that if
(i) such payment is a payment of the principal amount of any Revolving Loans or
funded participations in Swing Line Loans or Letters of Credit in respect of
which such Defaulting Lender has not fully funded its appropriate share and
(ii) such Revolving Loans or funded participations in Swing Line Loans or
Letters of Credit were made at a time when the conditions set forth in
Section 4.01 or 4.02, as applicable, were satisfied or waived, such payment
shall be applied solely to pay the Revolving Loans of, and funded participations
in Swing Line Loans or Letters of Credit owed to, all non-Defaulting Lenders on
a pro rata basis prior to being applied to the payment of any Revolving Loans
of, or funded participations in Swing Line Loans or Letters of Credit owed to,
such Defaulting Lender. Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.15(b)
shall be deemed paid to and redirected by such Defaulting Lender, and each
Lender irrevocably consents thereto.

(c) Reallocation of Applicable Percentages to Reduce Fronting Exposure. During
any period in which there is a Defaulting Lender, for purposes of computing the
amount of the obligation of each non-Defaulting Lender to acquire, refinance or
fund participations in Swing Line Loans or Fronted Letters of Credit pursuant to
Section 2.04 and Section 2.03(c), respectively, the “Applicable Percentage” of
each non-Defaulting Lender shall be computed without giving effect to the
Commitment of such Defaulting Lender; provided that (i) each such reallocation
shall be given effect only if, at the date the applicable Lender becomes a
Defaulting Lender the conditions set forth in Section 4.02(a) (as if a new
Letter of Credit were being requested) and Section 4.02(b) are satisfied at the
time of such reallocation (and, unless the Borrower shall have otherwise
notified the Administrative Agent at such time, the Borrower shall be deemed to
have represented and warranted that such conditions are satisfied at such time),
and (ii) the aggregate obligation of each non-Defaulting Lender to issue,
acquire, refinance or fund participations in Fronted Letters of Credit and Swing
Line Loans shall not exceed the positive difference, if any, of (A) the
Commitment of that non-Defaulting Lender minus (B) the aggregate outstanding
principal amount of the Loans of that Lender. Solely to the extent that a
Defaulting Lender is a Participating Bank with respect to any Several Letter of
Credit, the foregoing provisions with respect to the obligations of
non-Defaulting Lenders to acquire or fund participations in Fronted Letters of
Credit from the Fronting Bank for such Fronted Letter of Credit shall be
applicable mutatis mutandis to the determination of their obligations to acquire
or fund participations in such Several Letter of Credit from the Lender which
acted as Fronting Bank for such Defaulting Lender with respect to such Several
Letter of Credit (i.e., subject to the proviso above, the non-Defaulting Lenders
shall be obligated to acquire or fund such participations from the applicable
Fronting Bank to the extent of their Applicable Percentages (as adjusted hereby)
of the obligations of such Defaulting Lender to the applicable Fronting Bank in
respect of such Several Letter of Credit).

(d) Cash Collateral for Letters of Credit. Promptly on demand by the Fronting
Banks or the Administrative Agent from time to time, the Borrower shall deliver
to the Administrative Agent Cash Collateral in an amount sufficient to cover all
Fronting Exposure with respect to the Fronting Banks (after giving effect to
Section 2.15(c)) on

 

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terms reasonably satisfactory to the Administrative Agent and the Fronting
Banks. Any such Cash Collateral shall be deposited in a separate account with
the Administrative Agent, subject to the exclusive dominion and control of the
Administrative Agent, as collateral (solely for the benefit of the Fronting
Banks) for the payment and performance of each Defaulting Lender’s Applicable
Percentage of outstanding L/C Obligations. Moneys in such account shall be
applied by the Administrative Agent to reimburse the Fronting Banks immediately
for each Defaulting Lender’s Applicable Percentage of any drawing under any
Letter of Credit which has not otherwise been reimbursed by the Borrower
(including, without limitation, through a Loan) or such Defaulting Lender.

(e) Prepayment of Swing Line Loans. Promptly on demand by the Swing Line Lender
or the Administrative Agent from time to time, the Borrower shall prepay Swing
Line Loans in an amount of all Fronting Exposure with respect to the Swing Line
Lender for which Cash Collateralization or other credit support acceptable to
the Swing Line Lender shall not have been provided (after giving effect to
Section 2.15(c)).

(f) Certain Fees. For any period during which such Lender is a Defaulting
Lender, such Defaulting Lender (i) shall not be entitled to receive any facility
fee pursuant to Section 2.09(a) in respect of any unutilized portion of the
Commitment of such Defaulting Lender (and the Borrower shall not be required to
pay any such fee that otherwise would have been required to have been paid to
such Defaulting Lender) and (ii) shall not be entitled to receive any Letter of
Credit commissions pursuant to Section 2.03(i) otherwise payable to the account
of a Defaulting Lender with respect to any Letter of Credit as to which such
Defaulting Lender has not provided Cash Collateral or other credit support
arrangements satisfactory to the Fronting Banks pursuant to Section 2.15(d), but
instead, the Borrower shall pay to the non-Defaulting Lenders the amount of such
Letter of Credit commissions in accordance with the upward adjustments in their
respective Applicable Percentages allocable to such Letter of Credit pursuant to
Section 2.15(c), with the balance of such fee, if any, payable to the applicable
Fronting Bank for its own account.

(g) Defaulting Lender Cure. If the Borrower, the Administrative Agent, the Swing
Line Lender and the Fronting Banks agree in writing in their sole discretion
that a Defaulting Lender should no longer be deemed to be a Defaulting Lender,
the Administrative Agent will so notify the parties hereto, whereupon as of the
date specified in such notice and subject to any conditions set forth therein
(which may include arrangements with respect to any Cash Collateral), that
Lender will, to the extent applicable, purchase that portion of outstanding
Loans of the other Lenders or take such other actions as the Administrative
Agent may determine to be necessary to cause the Loans and funded and unfunded
participations in Letters of Credit and Swing Line Loans to be held on a pro
rata basis by the Lenders in accordance with their Applicable Percentages
(without giving effect to Section 2.15(c)), whereupon such Lender will cease to
be a Defaulting Lender; provided, that no adjustments will be made retroactively
with respect to fees accrued or payments made by or on behalf of the Borrower
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 to Lender will constitute a waiver or release
of any claim of any party hereunder arising from such Lender’s having been a
Defaulting Lender.

 

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ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01 Taxes.

(a) Defined Terms. For purposes of this Section 3.01, the term “Lender” includes
any L/C Issuer and the term “Applicable Law” includes FATCA.

(b) Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Loan Party under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by Applicable Law. If
any Applicable Law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Governmental Authority in accordance
with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Loan Party shall be increased as necessary so that, after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section), the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(c) Payment of Other Taxes by the Loan Parties. The Loan Parties shall timely
pay to the relevant Governmental Authority in accordance with Applicable Law, or
at the option of the Administrative Agent timely reimburse it for the payment
of, any Other Taxes.

(d) Indemnification by the Loan Parties. The Loan Parties shall jointly and
severally indemnify each Recipient, within ten (10) days after demand therefor,
for the full amount of any Indemnified Taxes (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this Section)
payable or paid by such Recipient or required to be withheld or deducted from a
payment to such Recipient and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Recipient
(with a copy to the Administrative Agent), or by the Administrative Agent on its
own behalf or on behalf of a Recipient, shall be conclusive absent manifest
error.

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Loan Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Loan Parties to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 10.06(d) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect

 

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thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

(f) Evidence of Payments. As soon as practicable after any payment of Taxes by
any Loan Party to a Governmental Authority pursuant to this Section 3.01(f),
such Loan Party 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.

(g) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by Applicable Law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 3.01(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii) Without limiting the generality of the foregoing, in the event that the
Borrower is a U.S. Person:

(A) Any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed
originals of IRS Form W-9 certifying that such Lender is exempt from United
States federal backup withholding tax;

 

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(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower 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 reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, United States federal
withholding Tax pursuant to the “interest” article of such tax treaty and
(y) with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN establishing an exemption from, or reduction of, United States
federal withholding Tax pursuant to the “business profits” or “other income”
article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) 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
substantially in the form of Exhibit J-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10
percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit J-2 or
Exhibit J-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit J-4 on
behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower 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 reasonable request of the Borrower or the Administrative
Agent), executed originals of any other form prescribed by Applicable Law as a
basis for claiming

 

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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 Borrower or the Administrative Agent to
determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
United States federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Borrower or the Administrative Agent such documentation prescribed by Applicable
Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

(h) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 3.01 (including by
the payment of additional amounts pursuant to this Section 3.01), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (h) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (h), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (h) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be

 

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construed to require any indemnified party to make available its Tax returns (or
any other information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(i) Survival. Each party’s obligations under this Section 3.01 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document.

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 Eurodollar Rate
Loans, or to determine or charge interest rates based upon the 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 Borrower
through the Administrative Agent (which notice shall state in reasonable detail
the reasons therefor together with a statement that other borrowers with similar
Eurodollar Rate Loans are being treated similarly), any obligation of such
Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans
to Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrower shall,
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all Eurodollar Rate 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 Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted.

3.03 Inability to Determine Rates. If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank Eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Lender. Thereafter, the obligation of the Lenders
to make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Revolving Borrowing of Base Rate Loans in the amount specified therein.

 

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3.04 Increased Costs; Reserves on Eurodollar Rate 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 advances, loans or other credit extended or
participated in by, any Lender (except any reserve requirement reflected in the
LIBOR Rate) or any Fronting Bank;

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or

(iii) impose on any Lender or any Fronting Bank or the London interbank market
any other condition, cost or expense (other than Taxes) affecting this Agreement
or Eurodollar Rate Loans made by such Lender or any Letter of Credit or
participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender, the Fronting Bank or such other Recipient of making, converting to,
continuing or maintaining any Loan (or of maintaining its obligation to make any
such Loan), or to increase the cost to such Lender, such Fronting Bank or such
other Recipient of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender, such Fronting Bank or such other Recipient hereunder (whether of
principal, interest or any other amount) then, upon written request of such
Lender, such Fronting Bank or other Recipient, the Borrower shall promptly pay
to any such Lender, such Fronting Bank or other Recipient, as the case may be,
such additional amount or amounts as will compensate such Lender, such Fronting
Bank or other Recipient, as the case may be, for such additional costs incurred
or reduction suffered.

(b) Capital Requirements. If any Lender or any Fronting Bank determines that any
Change in Law affecting such Lender or such Fronting Bank or any Lending Office
of such Lender or such Lender’s or such Fronting Bank’s holding company, if any,
regarding capital or liquidity requirements, has or would have the effect of
reducing the rate of return on such Lender’s or such Fronting Bank’s capital or
on the capital of such Lender’s or such Fronting Bank’s holding company, if any,
as a consequence of this Agreement, the Commitments of such Lender or the Loans
made by, or participations in Letters of Credit or Swing Line Loans held by,
such Lender, or the Letters of Credit issued by such Fronting Bank, to a level
below that which such Lender or such Fronting Bank or such Lender’s or such
Fronting Bank’s holding company could have achieved but for such Change in Law
(taking into consideration such Lender’s or such Fronting Bank’s policies and
the policies of such Lender’s or such Fronting Bank’s holding company with
respect to capital adequacy), then from time to time upon written request of
such Lender or such Fronting Bank the Borrower shall promptly pay to such Lender
or such Fronting Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or such Fronting Bank or such Lender’s or such
Fronting Bank’s holding company for any such reduction suffered.

 

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(c) Certificates for Reimbursement. A certificate of a Lender or any Fronting
Bank setting forth the amount or amounts necessary to compensate such Lender or
such Fronting Bank or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Loan Parties shall
(i) include a written explanation of such additional cost or reduction and a
statement that such costs affect other borrowers of such Lender or such Fronting
Bank who are similarly situated and (ii) be conclusive absent manifest error.
The Loan Parties shall pay such Lender or such Fronting Bank, as the case may
be, the amount shown as due on any such certificate within ten (10) days after
receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender or any
Fronting Bank to demand compensation pursuant to the foregoing provisions of
this Section shall not constitute a waiver of such Lender’s or such Fronting
Bank’s right to demand such compensation, provided that the Loan Parties shall
not be required to compensate a Lender or such Fronting Bank pursuant to the
foregoing provisions of this Section for any increased costs incurred or
reductions suffered more than nine months prior to the date that such Lender or
such Fronting Bank, as the case may be, notifies the Loan Parties of the Change
in Law giving rise to such increased costs or reductions and of such Lender’s or
such Fronting Bank’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 nine-month period referred to above shall be extended to
include the period of retroactive effect thereof).

3.05 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower 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 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 Borrower (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 on the date or in the amount notified by the Borrower; or

(c) any assignment of a Eurodollar Rate Loan on a day other than the last day of
the Interest Period therefor as a result of a request by the Borrower pursuant
to Section 10.13;

including any loss of anticipated profits, any foreign exchange losses, 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 or from the performance of any foreign exchange
contract. The Borrower shall also pay any customary administrative fees charged
by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the 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 Eurodollar Rate Loan was
in fact so funded.

 

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3.06 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.04, or any Loan Party 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. The Loan Parties hereby agree to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b) Replacement of Lenders. If (i) any Lender requests compensation under
Section 3.04, (ii) any Loan Party 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 (iii) any Lender that was an NAIC Approved Bank on the date
it became a party to this Agreement ceases to be an NAIC Approved Bank and has
failed to obtain a Fronting Bank as contemplated by Section 2.03(o), the
Borrower may replace such Lender in accordance with Section 10.13, in any case
upon notice to such Lender and the Administrative Agent.

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

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01 Conditions of Initial Credit Extension. The obligation of each Fronting
Bank, each L/C Issuer and each Lender to make their respective initial Credit
Extensions hereunder is subject to satisfaction of the following conditions
precedent:

(a) The Administrative Agent’s receipt of the following, each of which shall be
originals, telecopies, facsimile, “.pdf” or other electronically transmitted
copies (followed promptly by originals) unless otherwise specified, each
properly executed by a Responsible Officer of the signing Loan Party, each dated
the Restatement Effective Date (or, in the case of certificates of governmental
officials, a recent date before the Restatement Effective Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:

(i) executed counterparts of this Agreement, in such number as the
Administrative Agent shall request;

 

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(ii) a Revolving Note executed by the Borrower in favor of each Lender
requesting a Revolving Note;

(iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party 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
Loan Party is a party;

(iv) such documents and certifications as the Administrative Agent may
reasonably require to evidence that each Loan Party is duly organized or formed,
and that each Loan Party is validly existing, in good standing and qualified to
engage in business in such jurisdictions as the Administrative Agent may
reasonably request;

(v) (A) a favorable opinion of McAfee & Taft, outside counsel to the Borrower,
(B) a favorable opinion of R. Brian Mitchell, executive vice president and
general counsel of the Borrower and (C) a favorable opinion of Appleby,
Spurling & Kempe, special Bermuda counsel to TMK, each addressed to the
Administrative Agent and each Lender, as to such matters concerning the Loan
Parties and the Loan Documents as the Administrative Agent or the Required
Lenders may reasonably request;

(vi) a certificate of a Responsible Officer or Secretary of each Loan Party
either (A) attaching copies of all consents, licenses and regulatory or other
approvals required in connection with the execution, delivery and performance by
such Loan Party and the validity against such Loan Party of the Loan Documents
to which it is a party, and such consents, licenses and approvals shall be in
full force and effect, or (B) stating that no such consents, licenses or
approvals are so required;

(vii) a certificate signed by a Responsible Officer of the Borrower certifying
(A) that the conditions specified in Section 4.01(e) and (f) and
Sections 4.02(a) and (b) have been satisfied, (B) that there has been no event
or circumstance since the date of the Audited Financial Statements that has had
or could be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect, and (C) the current Debt Ratings.

(viii) evidence that prior to or concurrently with the Restatement Effective
Date (A) all outstanding obligations under the Existing Credit Agreement are
paid and (B) all outstanding letters of credit issued under the Existing Credit
Agreement are being (i) surrendered for cancellation or (ii) amended and/or
continued, as applicable, pursuant to Section 2.03(n) hereof;

(ix) a duly completed compliance certificate as of March 31, 2014 in form
satisfactory to the Administrative Agent, signed by a Responsible Officer of the
Borrower and evidencing compliance as of such date with Section 7.11 hereof;

 

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(x) each Existing Lender that is not a Lender under this Agreement shall have
executed and delivered to the Administrative Agent an Existing Lender Agreement
(and each Lender authorizes the Administrative Agent to enter into such
agreements and, without incurring any liability thereunder, consents to the
terms thereof); and

(xi) except as the Administrative Agent and the Borrower shall otherwise agree,
the Administrative Agent shall have received evidence (which the Borrower shall
deliver) in the form of the most current “Bank List” of banks approved by the
NAIC, that each Lender is an NAIC Approved Bank; and

(xii) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent, the Swing Line Lender, the L/C Administrator, or the
Required Lenders reasonably may require.

(b) Any fees required to be paid on or before the Restatement Effective Date
shall have been paid.

(c) Unless waived by the Administrative Agent, the Borrower shall have paid all
fees, charges and disbursements of counsel to the Administrative Agent to the
extent invoiced prior to or on the Restatement Effective Date.

(d) The Restatement Effective Date shall have occurred on or before July 30,
2014.

(e) There shall not have occurred a material adverse change (i) in the business,
assets, properties, liabilities (actual or contingent), operations, conditions
(financial or otherwise) or prospects of either of the Loan Parties, or the
Borrower and its Subsidiaries, taken as a whole, since December 31, 2013 or
(ii) in the facts and information regarding such entities as represented by the
Borrower or any of its Subsidiaries, or any representatives of any of them, to
date.

(f) The absence of any action, suit, investigation or proceeding pending or, to
the knowledge of the Borrower or any of its Subsidiaries, threatened, in any
court or before any arbitrator or governmental authority that could reasonably
be expected to have a Material Adverse Effect.

(g) Each Several Letter of Credit described on Schedule 2.03 shall have been
amended to remove, as applicable, the Existing Lenders as issuers thereof and to
reflect as the issuers thereof the Lenders in accordance with their Applicable
Percentages as reflected on Schedule 2.01 hereto (or shall have been cancelled
without a drawing thereon).

Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be

 

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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 Restatement Effective Date specifying its objection thereto.

4.02 Conditions to all Credit Extensions. The obligation of each Lender to honor
any Request for Credit Extension (other than a Revolving Loan Notice requesting
only a conversion of Revolving Loans to the other Type or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:

(a) The representations and warranties of the Borrower and each other Loan Party
contained in Article V (other than the representation in Section 5.05(c) solely
with respect to a Borrowing occurring after the Restatement Effective Date) or
any other Loan Document, shall be true and correct on and as of the date of such
Credit Extension, 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, and except that for purposes of this
Section 4.02, 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.

(b) No Default shall exist, or would result from such proposed Credit Extension
or from the application of the proceeds thereof.

(c) The Administrative Agent and, if applicable, the Applicable Issuing Party or
the Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.

(d) If a Secured Letter of Credit is being requested, (i) the Borrower shall
have executed a Security Agreement and Control Agreement and the Administrative
Agent shall have received such resolutions, certificates and opinions with
respect thereto as the Administrative Agent may reasonably request and (ii) the
Administrative Agent shall have received a Borrowing Base Certificate calculated
as of the most recent Business Day in accordance with the requirements hereof
and demonstrating compliance with Section 6.13.

Each Request for Credit Extension (other than a Revolving Loan Notice requesting
only a conversion of Revolving Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by any Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit
Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

The Loan Parties represent and warrant to the Administrative Agent and the
Lenders that:

5.01 Existence, Qualification and Power; Compliance with Laws. Each Loan Party
and each of the Significant Subsidiaries (a) is duly organized or formed,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all

 

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requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own 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, (c) is duly qualified and is licensed and 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, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.

5.02 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary 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 the creation of any Lien under, 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;
or (c) violate any Law. Each Loan Party is in compliance with all Contractual
Obligations referred to in clause (b)(i), except to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.

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 Loan Party of this Agreement or any other Loan Document.

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 Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.

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; (ii) fairly present the financial condition of the
Borrower and its 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; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrower and its Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.

(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries dated March 31, 2014, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for the fiscal quarter
ended on that date

 

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(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 the Borrower 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. Schedule 5.05 sets forth all
material indebtedness and other liabilities, direct or contingent, of the
Borrower and its consolidated Subsidiaries not disclosed on the financial
statements referred to in this subsection (b), including liabilities for taxes,
material commitments and Indebtedness.

(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.

5.06 Litigation. Except as set forth on Schedule 5.06, there are no actions,
suits, proceedings, claims or disputes pending or, to the knowledge of the
Borrower, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the 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, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.

5.07 No Default. Neither the Borrower nor any Subsidiary 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 Ownership of Property; Liens. Each of the Borrower and each Subsidiary has
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The property of the
Borrower and its Subsidiaries is subject to no Liens, other than Liens permitted
by Section 7.01.

5.09 Environmental Compliance. The Borrower and its Subsidiaries are in
compliance with all Environmental Laws, except where the failure to be in such
compliance could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect. There are no claims alleging potential
liability or responsibility for violation of any Environmental Law on the
respective businesses, operations and properties of the Borrower and its
Subsidiaries which could, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

5.10 Insurance. The properties of the Borrower and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Borrower, 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 Borrower or the applicable Subsidiary
operates, including self-insurance for certain portions of workers compensation
to the extent customary.

 

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5.11 Taxes. The 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 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. There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is
party to any tax sharing agreement with any Person other than another Loan Party
or a Subsidiary thereof.

5.12 ERISA Compliance.

(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other Federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter or opinion letter from the IRS or an application for such a
letter is currently being processed by the IRS with respect thereto and, to the
best knowledge of the Borrower, nothing has occurred which would prevent, or
cause the loss of, such qualification. The Borrower and each ERISA Affiliate
have made all required contributions to each Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412, 430 or 431 of the Code has been
made with respect to any Plan.

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

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the Borrower
nor any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower
nor any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.

5.13 Subsidiaries; Equity Interests. As of the Restatement Effective Date, the
Borrower has no Subsidiaries other than those specifically disclosed in Part (a)
of Schedule 5.13, and all of the outstanding Equity Interests in such
Subsidiaries have been validly issued, are fully paid and non-assessable and are
owned directly or indirectly by the Borrower in the amounts

 

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specified on Part (a) of Schedule 5.13 free and clear of all Liens. As of the
Restatement Effective Date, the Borrower has no equity investments in any other
corporation or entity in excess of 5% of the Equity Interests of such
corporation or entity other than those specifically disclosed in Part (b) of
Schedule 5.13. All of the outstanding Equity Interests in the Borrower have been
validly issued and are fully paid and non-assessable. As of the Restatement
Effective Date, TMK does not have any Subsidiaries.

5.14 Margin Regulations; Investment Company Act.

(a) No Loan Party is engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the FRB), or extending credit for
the purpose of purchasing or carrying margin stock. Following the application of
the proceeds of each Borrowing or drawing under each Letter of Credit, not more
than 25% of the value of the assets (either of the Borrower only or of the
Borrower and its Subsidiaries on a consolidated basis) subject to the provisions
of Section 7.01 or Section 7.05 or subject to any restriction contained in any
agreement or instrument between any Loan Party and any Lender or any Affiliate
of any Lender relating to Indebtedness and within the scope of Section 8.01(e)
will be margin stock.

(b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary
is or is required to be registered as an “investment company” under the
Investment Company Act of 1940.

5.15 Disclosure. The Borrower has 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 information furnished (whether in writing or orally) by or on behalf of
any Loan Party 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; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

5.16 Compliance with Laws. Each of the Borrower and each Subsidiary 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.

5.17 Intellectual Property; Licenses, Etc. The Borrower and its Subsidiaries
own, or possess the right to use, all of the trademarks, service marks, trade
names, copyrights, patents,

 

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patent rights, franchises, licenses and other intellectual property rights
(collectively, “IP Rights”) that are reasonably necessary for the operation of
their respective businesses, without conflict with the rights of any other
Person. To the best knowledge of the Borrower, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrower or any Subsidiary
infringes upon any rights held by any other Person. No claim or litigation
regarding any of the foregoing is pending or, to the best knowledge of the
Borrower, threatened, which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

5.18 Solvent. Each of the Borrower and TMK is, and the Borrower and its
Subsidiaries are on a consolidated basis, Solvent.

5.19 Insurance Licenses. As of the Restatement Effective Date, Schedule 5.19
lists all of the jurisdictions in which any Significant Insurance Subsidiary
holds active Licenses and is authorized to transact insurance business. No
License of any Significant Subsidiary in any jurisdiction is the subject of a
proceeding for suspension or revocation, there is no sustainable basis for such
suspension or revocation, and to each Loan Party’s best knowledge, no such
suspension or revocation has been threatened by any Governmental Authority.
Schedule 5.19 also indicates the type or types of insurance in which each such
Insurance Subsidiary is permitted to engage with respect to each License therein
listed as of the Restatement Effective Date. As of the Restatement Effective
Date, none of the Insurance Subsidiaries transacts any insurance business,
directly or indirectly, in any state other than those enumerated in
Schedule 5.19.

5.20 Indebtedness and Liens. TMK has no Indebtedness outstanding on the
Restatement Effective Date other than the Obligations and on the Restatement
Effective Date there are no Liens on the property of TMK except Liens permitted
by Section 7.01.

5.21 Reserves. TMK owns assets that qualify as admitted assets under Applicable
Law in an amount at least equal to the sum of all such reserves and liability
amounts and its minimum statutory capital and surplus as required by the
insurance Laws of its jurisdiction of domicile.

5.22 First Priority Interest. The Administrative Agent, for the benefit of
itself, the Fronting Banks, the L/C Issuers, the L/C Administrator and the
Lenders, has a first priority perfected security interest in the Collateral, if
any, pledged by each Loan Party pursuant to this Agreement (if ever) or any
applicable Security Agreement.

5.23 Anti-Terrorism; Anti-Money Laundering. No Loan Party nor any of its
Subsidiaries or, to their knowledge, any of their Related Parties (i) is an
“enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading
with the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), (ii) is
in violation of (A) the Trading with the Enemy Act, (B) any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V) or any enabling legislation or executive order relating
thereto or (C) the PATRIOT Act (collectively, the “Anti-Terrorism Laws”) or
(iii) is a Sanctioned Person. No part of the proceeds of any extension of credit
hereunder will be unlawfully used directly or indirectly to fund any operations
in, finance any investments or activities in or make any payments to, a
Sanctioned Person or a Sanctioned Country, or in any other manner that will

 

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result in any violation by any Person (including any Lender, the Arranger, the
Administrative Agent, any L/C Issuer, the L/C Administrator the Swing Line
Lender) of any Anti-Terrorism Laws.

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, or any Letter of Credit
shall remain outstanding, the Borrower 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,
in form and detail satisfactory to the Administrative Agent and the Required
Lenders:

(a) as soon as available, but in any event within ninety (90) days after the end
of each fiscal year of the Borrower, a consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year,
and the related consolidated and consolidating 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, such consolidated
statements to be audited and accompanied by a report and opinion of an
independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with generally accepted auditing standards 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; and

(b) as soon as available, but in any event within forty-five (45) days after the
end of each of the first three fiscal quarters of each fiscal year of the
Borrower, a consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, and the related consolidated
and consolidating statements of income or operations, shareholders’ equity and
cash flows for such fiscal quarter and for the portion of the Borrower’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,
such consolidated statements to be certified by a Responsible Officer of the
Borrower as fairly presenting the financial condition, results of operations,
shareholders’ equity and cash flows of the Borrower 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(c), the Borrower 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 Borrower to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.

 

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6.02 Certificates; Other Information. Deliver to the Administrative Agent and
each Lender, in form and detail satisfactory to the Administrative Agent and the
Required Lenders:

(a) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrower;

(b) promptly after any request by the Administrative Agent or any Lender, copies
of any detailed audit reports, substantive management letters or substantive
recommendations submitted to the board of directors (or the audit committee of
the board of directors) of the Borrower by independent accountants in connection
with the accounts or books of the Borrower or any Subsidiary, or any audit of
any of them;

(c) promptly after the same are publicly available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of the Borrower, and copies of all annual, regular, periodic
and special reports and registration statements which the Borrower 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;

(d) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of any Loan Party or any Subsidiary
thereof pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
Section 6.01 or any other clause of this Section 6.02;

(e) promptly, and in any event within five (5) Business Days after receipt
thereof by any Loan Party or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or any other Governmental Authority)
concerning any material investigation by such agency regarding financial or
other operational results of any Loan Party or any Subsidiary thereof;

(f) within (i) ninety (90) days after the close of each fiscal year of each
Significant Insurance Subsidiary, copies of the Annual Statement of each of the
Significant Insurance Subsidiaries, as certified by the president, secretary and
treasurer of and the actuary for each such Significant Insurance Subsidiary and
prepared on the NAIC annual statement blanks (or such other form as shall be
required by the jurisdiction of incorporation of each such Significant Insurance
Subsidiary), all such statements to be prepared in accordance with SAP
consistently applied throughout the periods reflected therein and (ii) one
hundred eighty (180) days after the close of each fiscal year of each
Significant Insurance Subsidiary, copies of the certification by independent
certified public accountants reasonably acceptable to the Administrative Agent
if so required by any Governmental Authority with respect to such Annual
Statements;

(g) within sixty (60) days after the close of each fiscal quarter of each
Significant Insurance Subsidiary, copies of the Quarterly Statement of each of
the Significant Insurance Subsidiaries, as certified by the president, secretary
and treasurer of and the actuary for each such Significant Insurance Subsidiary
and prepared on the NAIC

 

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quarterly statement blanks (or such other form as shall be required by the
jurisdiction of incorporation of each such Insurance Subsidiary), all such
statements to be prepared in accordance with SAP consistently applied throughout
the periods reflected therein;

(h) promptly upon any Loan Party’s receipt thereof, copies of reports or
valuations prepared by any Governmental Authority or actuary in respect of any
action or event which has resulted in the reduction by 5% or more in the capital
and surplus of any Insurance Subsidiary;

(i) promptly and in any event within ten (10) days after learning thereof,
notification of any decrease after the date hereof in the rating given by A.M.
Best & Co. in respect of any Insurance Subsidiary;

(j) with each Letter of Credit Application for a Secured Letter of Credit and
within ten (10) Business Days after the end of each calendar month when a
Secured Letter of Credit is in place, a Borrowing Base Certificate executed by a
Responsible Officer. For purposes of such report and of completing the Borrowing
Base Certificate required under this Section 6.02(j), Eligible Collateral shall
be valued based on its Fair Market Value as at the last Business Day of the
calendar month for which such report or Borrowing Base Certificate is being
delivered;

(k) promptly, at the reasonable request of the Administrative Agent at any time
any Secured Letter of Credit is outstanding, a Borrowing Base Certificate for
any given Business Day executed by a Responsible Officer of the Borrower; and

(l) promptly, such additional information regarding the business, financial or
corporate affairs of the Borrower or any Subsidiary, or compliance with the
terms of the Loan Documents, as the Administrative Agent or any Lender may from
time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (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 the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on the Borrower’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 Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrower 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 Borrower 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. Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 6.02(a) to the Administrative Agent.
Except for such Compliance Certificates, the Administrative Agent shall have no
obligation to request the delivery or to maintain copies of the documents
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shall have no responsibility to monitor compliance by the Borrower with any such
request by a Lender for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Joint Arrangers will make available to the Lenders and Fronting Banks materials
and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on
SyndTrak Online 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 the Borrower
or its securities) (each, a “Public Lender”). The Borrower 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 Borrower shall be deemed to have
authorized the Administrative Agent, the Joint Arrangers, the L/C Administrator
and the Lenders to treat such Borrower Materials as not containing any material
non-public information (although it may be sensitive and proprietary) with
respect to the Borrower or its 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 Joint Arrangers 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 not designated “Public Investor.”

6.03 Notices. Promptly notify the Administrative Agent and each Lender:

(a) of the occurrence of any Default;

(b) of any matter, including (i) breach or non-performance of, or any default
under, a Contractual Obligation of the Borrower or any Subsidiary, (ii) any
dispute, litigation, investigation, proceeding or suspension between the
Borrower or any Subsidiary and any Governmental Authority, including any notice
from any Governmental Authority of the expiration without renewal, revocation or
suspension of, or the institution of any proceedings to revoke or suspend, any
License now or hereafter held by any Insurance Subsidiary which is required to
conduct insurance business in compliance with all Applicable Laws, (iii) any
judicial or administrative order limiting or controlling the insurance business
of any Insurance Subsidiary (and not the insurance industry generally), (iv) any
notice from any Governmental Authority of the institution of any disciplinary
proceedings against or in respect of any Insurance Subsidiary, or the issuance
of any order, the taking of any action or any request for an extraordinary audit
for cause by any Governmental Authority or (v) the commencement of, or any
material development in, any litigation or proceeding affecting the Borrower or
any Subsidiary, including pursuant to any applicable Environmental Laws, in each
case, that, individually or collectively, has resulted or could reasonably be
expected to result in a Material Adverse Effect;

(c) of the occurrence of any ERISA Event;

 

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(d) of any material change in accounting policies and practices by the Borrower
or any Subsidiary; and

(e) of any announcement by Moody’s or S&P of any change or possible change in a
Debt Rating;

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the 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 as the same shall become due and
payable, all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

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; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable 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; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.

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; (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; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.

6.07 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of the Borrower, insurance with respect to
its Property 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.

6.08 Compliance with Laws. Comply in all material respects with the requirements
of all 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.

 

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6.09 Books and Records. (a) Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP or SAP, as the case
may be, consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Borrower or such Subsidiary, as
the case may be; and (b) maintain such books of record and account in material
conformity with all applicable requirements of any Governmental Authority having
regulatory jurisdiction over the Borrower or such Subsidiary, as the case may
be.

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 Borrower; 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 Borrower at any time during
normal business hours and without advance notice.

6.11 Use of Proceeds. Use the proceeds of the Credit Extensions (a) to repay all
obligations in respect of the Existing Credit Agreement, (b) for general
corporate purposes, including, without limitation, the repayment of commercial
paper Indebtedness and the issuance of letters of credit for the benefit of
ceding insurance companies which are Subsidiaries of the Borrower, not in
contravention of any Law or of any Loan Document and (c) to make Permitted
Acquisitions.

6.12 Further Assurances. At any time or from time to time upon reasonable
request by the Administrative Agent, the Borrower shall or shall cause any of
the Borrower’s Subsidiaries to execute and deliver such further documents and do
such other acts and things as the Administrative Agent may reasonably request in
order to effect fully the purposes of this Agreement and the other Loan
Documents and to provide for payment of the Obligations in accordance with the
terms of this Agreement and the other Loan Documents. Without limiting the
foregoing, promptly upon the request of the Administrative Agent, each Loan
Party shall execute, acknowledge, deliver and record and do any and all such
further acts and deeds as the Administrative Agent may reasonably request from
time to time in order to ensure that the Secured L/C Obligations (or, as
applicable, other Obligations) are secured by a first priority perfected
interest in the assets of the applicable Loan Party stated to be pledged to
secure such Secured L/C Obligations (or, as applicable, other Obligations)
pursuant to the applicable Security Agreement and to perfect and maintain the
validity, effectiveness and priority of the Security Agreement and the Liens
intended to be created thereby. Notwithstanding any provision of a Control
Agreement to the contrary, without the prior written consent of the
Administrative Agent, no Loan Party shall give directions or entitlement orders,
as applicable, to Wells Fargo to make a delivery to any Loan Party or any other
Person of assets or properties (other than dividends and interest on the
Eligible Collateral) from the Collateral Account except in connection with the
sale, investment or reinvestment of Eligible Collateral the proceeds of which
will be deposited into the Collateral Account. The Administrative Agent, on
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Lenders, agrees that provided (a) no Default exists and is continuing and
(b) after giving effect to the proposed delivery, the Borrowing Base is equal to
or in excess of the Secured L/C Obligations, the Administrative Agent shall
consent to any such delivery within one Business Day after such request.

6.13 Collateral Requirements. The Borrower shall cause there to be Eligible
Collateral of the Borrower in the Collateral Account such that the Borrowing
Base is at all times equal to or greater than the Secured L/C Obligations. If at
any time the Secured L/C Obligations exceed the Borrowing Base, the Borrower
shall as promptly as possible (and in any event within two (2) Business Days)
deposit into the Collateral Account Eligible Collateral of the Borrower or
reduce the Secured L/C Obligations, or a combination of the foregoing, in an
amount sufficient to eliminate such excess.

6.14 Conduct of Insurance Business. Cause each Significant Insurance Subsidiary
to (a) carry on or otherwise be associated with the business of a licensed
insurance carrier and (b) do all things necessary to renew, extend and continue
in effect all Licenses which may at any time and from time to time be necessary
for such Significant Insurance Subsidiary to operate its insurance business in
compliance with all Applicable Laws; provided, however, that any such
Significant Insurance Subsidiary may withdraw from one or more states as an
admitted insurer or change the state of its domicile, if such withdrawal or
change is in the best interests of the Borrower and such Significant Insurance
Subsidiary and could not reasonably be expected to have a Material Adverse
Effect. TMK will (a) only provide reinsurance to Ceding Companies, (b) only
engage in the insurance business in which it is engaged or licensed as of the
Restatement Effective Date, (c) do all things necessary to remain duly
incorporated, validly existing and in good standing in its jurisdiction of
formation, and (d) do all things necessary to renew, extend and continue in
effect all Licenses which may at any time and from time to time be necessary for
it to operate its insurance business in compliance with all Applicable Laws. TMK
will not change its jurisdiction of domicile without the prior written consent
of the Required Lenders. The Borrower will cause TMK to be and remain a
Wholly-Owned Subsidiary and to be at all times Solvent.

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, or any Letter of Credit
shall remain outstanding:

7.01 Liens. The Borrower shall not, nor shall it permit any Subsidiary to,
directly or indirectly, 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 (a) Liens pursuant to any Loan Document and (b) other Liens
securing Indebtedness not to exceed $100,000,000 in aggregate principal amount.

7.02 Acquisitions. The Borrower shall not, nor shall it permit any Subsidiary
to, make any Acquisitions, except Permitted Acquisitions.

 

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7.03 Guarantees. TMK will not create, incur, assume or suffer to exist any
Guarantees, except:

(a) Guarantees in respect of Insurance Contracts and Reinsurance Contracts
issued in the ordinary course of business;

(b) Guarantees in respect of the extension of guaranties in the ordinary course
of business to insureds of the obligations of insurers under Insurance Contracts
and Reinsurance Contracts; and

(c) Guarantees in respect of the endorsement of instruments for deposit or
collection in the ordinary course of business.

7.04 Fundamental Changes. The Borrower shall not, nor shall it permit any
Subsidiary to, merge, dissolve, liquidate, or consolidate with or into another
Person, except that, so long as no Default exists or would result therefrom:

(a) Any Subsidiary may merge with (i) the Borrower, provided that the Borrower
shall be the continuing or surviving Person, or (ii) any one or more
Wholly-Owned Subsidiaries; and

(b) The Borrower or any Subsidiary may merge or consolidate with or into any
other Person, provided that the Borrower or such Subsidiary shall be the
continuing or the surviving Person.

Notwithstanding anything in this Section 7.04 to the contrary, TMK shall not
merge or consolidate with or into any other Person.

7.05 Dispositions. The Borrower shall not, nor shall it permit any Subsidiary
to, make any Disposition or series of related Dispositions or enter into any
agreement to make any Disposition(s) of all or a Substantial Portion of its
Property (excluding Investments sold in the ordinary course of business) in any
calendar year, and shall not make any Disposition for less than fair market
value.

7.06 Sale and Leaseback. The Borrower shall not, nor shall it permit any
Subsidiary to, sell or transfer a Substantial Portion of its Property in order
to concurrently or subsequently lease as lessee such or similar Property.

7.07 Change in Nature of Business. The Borrower shall not, and shall not permit
any Subsidiary to, engage in any material line of business substantially
different from those lines of business conducted by the Borrower and its
Subsidiaries on the Restatement Effective Date or any business substantially
related or incidental thereto.

7.08 Transactions with Affiliates. The Borrower shall not, and shall not permit
any Subsidiary to, enter into any transaction of any kind (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate (other than the Borrower or a Wholly-Owned
Subsidiary of the Borrower), except (a) any such transactions, payments or
transfer with or to such Affiliates as are made in the ordinary course of
business, and upon fair and reasonable terms no less favorable to the Borrower
or such

 

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Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time
in a comparable arm’s-length transaction with a Person other than an Affiliate
and (b) any such other transactions, payments or transfers with or to such
Affiliates as could not reasonably be expected to have a Material Adverse
Effect.

7.09 Burdensome Agreements. The Borrower shall not, nor shall it permit any
Subsidiary to, subject to limitations imposed by Law, enter into any Contractual
Obligation (other than this Agreement, any other Loan Document) that (a) limits
the ability (i) of any Subsidiary to make Restricted Payments to the Borrower or
to otherwise transfer property to the Borrower, (ii) of any Subsidiary to
Guarantee the Indebtedness of the Borrower, or (iii) of the Borrower or any
Subsidiary to create, incur, assume or suffer to exist Liens on property of such
Person; or (b) requires the grant of a Lien to secure an obligation of such
Person if a Lien is granted to secure another obligation of such Person;
provided, however, that the foregoing restrictions of this Section 7.09 shall
not be applicable to (i) Section 1007 (as in effect on September 24, 2012) of
that certain Indenture dated as of February 1, 1987 by and between the Borrower
and Morgan Guaranty Trust Company of New York, as amended or supplemented
through September 24, 2012 or as further supplemented with respect to the
issuance of additional notes thereunder (the “1987 Indenture”), (ii) any
provision of any other indenture (a “Subsequent Indenture”) that is
substantially similar to Section 1007 of the 1987 Indenture (a “Substantially
Similar Provision”) under which the Borrower may issue notes in the future (it
being understood that a provision which relates to different collateral or
imposes greater conditions upon the granting of collateral to third parties than
does Section 1007 shall not be deemed to be a Substantially Similar Provision),
(iii) any incorporation by reference of Section 1007 of the 1987 Indenture or of
a Substantially Similar Provision of a Subsequent Indenture into any notes
heretofore issued or to be issued pursuant to any such indenture or any
supplemental indenture thereto or (iv) Section 2.6(b) or 2.7 of the Amended and
Restated Declaration of Trust by and among Wilmington Trust Company, as
Institutional Trustee, Wilmington Trust Company, as Delaware Trustee,
Southwestern American Financial Corporation, as Sponsor, and Jerome E. Grabowski
and Henry E. Bedford, as Administrators, dated as of March 1, 2006 (the “2006
Indenture”), as such document is in effect on August 30, 2012 (without giving
effect to any subsequent modifications thereof).

7.10 Use of Proceeds. Use the proceeds of any Credit Extension, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.

7.11 Financial Covenants.

(a) Consolidated Net Worth. The Borrower will maintain at all times Consolidated
Net Worth equal to not less than the sum of (i) $2,766,745,000, plus (ii) 25% of
the Borrower’s Consolidated Net Income, if positive, for each fiscal quarter
ending after March 31, 2014, plus (iii) 100% of the Net Proceeds received by the
Borrower and its Subsidiaries from the issuance and sale of Equity Interests of
the Borrower or any Subsidiary (other than the issuance to the Borrower or a
Wholly-Owned Subsidiary), including any conversion of debt securities of the
Borrower or any Subsidiary into Equity Interests after March 31, 2014.

(b) Ratio of Consolidated Indebtedness to Consolidated Capitalization. The
Borrower will maintain at all times a ratio of Consolidated Indebtedness to
Consolidated Capitalization of not greater than 0.40 to 1.0.

7.12 Preferred Securities. The Borrower shall not, and shall not permit any
other obligor in respect of any Preferred Securities to, declare or pay
dividends or distributions on, or redeem, purchase or otherwise acquire, any
Preferred Securities or any portion thereof if at such time, or after giving
effect thereto, a Default or Event of Default exists or would exist.

 

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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 Loan Party fails to pay (i) when and as required to be paid
herein, any amount of principal of any Loan or any L/C Obligation, or
(ii) within three (3) days after the same becomes due, any interest on any Loan
or on any L/C Obligation, or any fee due hereunder, or (iii) within five
(5) days after the same becomes due, any other amount payable hereunder or under
any other Loan Document; or

(b) Specific Covenants. The Borrower or any Subsidiary fails to perform or
observe any term, covenant or agreement contained in any of Section 6.03, 6.05,
6.10, 6.11, 6.12, 6.13 or Article VII; or

(c) Other Defaults. The Borrower or any Subsidiary 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 thirty (30) days; or

(d) Representations and Warranties. Any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of any Loan Party
herein, in any other Loan Document, or in any document delivered in connection
herewith or therewith shall be incorrect or misleading when made or deemed made
in any material respect; or

(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $10,000,000, or (B) fails to observe or perform
any other agreement or condition relating to any such Indebtedness or Guarantee
or contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
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to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to
its stated maturity, or such Guarantee to become payable or Cash Collateral in
respect thereof to be demanded; or (ii) there occurs under any Swap Contract an
Early Termination Date (as defined in such Swap Contract) resulting from (A) any
event of default under such Swap Contract as to which the Borrower or any
Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any
Termination Event (as so defined) under such Swap Contract as to which the
Borrower or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by any Loan Party as a result thereof is
greater than $10,000,000; or

(f) Insolvency Proceedings, Etc. The Borrower or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or

(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
thirty (30) days after its issue or levy; or

(h) Judgments. There is entered against the Borrower or any Subsidiary (i) a
final judgment or order for the payment of money in an aggregate amount
exceeding $10,000,000 (to the extent not covered by independent third-party
insurance as to which the insurer does not dispute coverage), or (ii) any one or
more non-monetary final judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect and, in either
case, (A) enforcement proceedings are commenced by any creditor upon such
judgment or order, or (B) there is a period of 45 consecutive days during which
a stay of enforcement of such judgment, by reason of payment, a pending appeal
or otherwise, is not in effect; or

(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000,
or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of $5,000,000; or

 

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(j) Invalidity of Loan Documents. Any Loan Document, at any time after its
execution and delivery and for any reason other than as expressly permitted
hereunder or thereunder or satisfaction in full of all the Obligations, ceases
to be in full force and effect; or any Loan Party or any other Person contests
in any manner the validity or enforceability of any Loan Document; or any Loan
Party denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or any
Loan Document shall for any reason cease to create a valid and perfected first
priority Lien on, or security interest in, any of the Collateral purported to be
covered thereby, in each case other than in accordance with the express terms
hereof or thereof; or

(k) Change of Control. There occurs any Change of Control of the Borrower or the
Borrower shall cease to own 100% of the outstanding Equity Interests of TMK; or

(l) Guaranty. The Guaranty shall fail to remain in full force or effect or any
action shall be taken by the Borrower, any of its Subsidiaries or any
Governmental Authority to discontinue or to assert the invalidity or
unenforceability thereof, or the Borrower denies that it has any further
liability hereunder, or gives notice to such effect; or

(m) Solvency. TMK shall fail at any time to remain Solvent; or

(n) Licenses. Any License of any Insurance Subsidiary held by such Insurance
Subsidiary on the Restatement Effective Date or acquired by such Insurance
Subsidiary thereafter, the loss of which would have, in the reasonable judgment
of the Lenders, a Material Adverse Effect, (i) shall be revoked by a final
non-appealable order by the state which shall have issued such License, or any
action (whether administrative or judicial) to revoke such License shall have
been commenced against such Insurance Subsidiary which shall not have been
dismissed or contested in good faith within thirty (30) days of the commencement
thereof, (ii) shall be suspended by such state for a period in excess of thirty
(30) days or (iii) shall not be reissued or renewed by such state upon the
expiration thereof following application for such reissuance or renewal by such
Insurance Subsidiary. TMK shall cease to be duly licensed as a reinsurance
company under Bermuda law.

8.02 Remedies Upon Event of Default. If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:

(a) declare the commitment of each Lender to make Loans and any obligation of
the Fronting Banks and the L/C Issuers to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;

(b) declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Loan Parties;

 

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(c) require that each Loan Party (in addition to remaining in compliance with
Section 6.13 with respect to Secured Letters of Credit) Cash Collateralize its
L/C Obligations in respect of all Unsecured Letters of Credit in an amount equal
to the then Outstanding Amount thereof;

(d) require that the Eligible Collateral maintained in any Collateral Account to
comply with Section 6.13 consist solely of Cash or such other Eligible
Collateral as the Administrative Agent may require; and

(e) exercise on behalf of itself, the L/C Issuers, the Fronting Banks and the
Lenders all rights and remedies available to it, the L/C Issuers, the Fronting
Banks and the Lenders under the Loan Documents;

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Loan Party under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
any L/C Issuer or Fronting Bank to make L/C Credit Extensions shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable, and the obligation of the Loan Parties to Cash Collateralize the
L/C Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.

8.03 Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received or held on account of the Obligations shall be applied by the
Administrative Agent in the following order:

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders and the Fronting Banks (including fees, charges and disbursements of
counsel to the respective Lenders and the Fronting Banks (including fees and
time charges for attorneys who may be employees of any Lender or the Fronting
Banks) and amounts payable under Article III), ratably among them in proportion
to the amounts described in this clause Second payable to them;

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, L/C Borrowings and other Obligations, ratably
among the Lenders and the Fronting Banks in proportion to the respective amounts
described in this clause Third payable to them;

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders and the
Fronting Banks in proportion to the respective amounts described in this clause
Fourth held by them;

 

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Fifth, to the Administrative Agent for the account of (x) the Fronting Banks, in
the case of Fronted Letters of Credit and (y) the Lenders, in the case of
Several Letters of Credit, to Cash Collateralize that portion of L/C Obligations
comprised of the aggregate undrawn amount of Letters of Credit;

Sixth, to payment of Swap Obligations, ratably among the Lenders (or any
Affiliate of any Lender entering into a Swap Contract provided that such Lender
was a Lender at the time such Swap Contract was entered into) in proportion to
the respective amounts described in this clause Sixth held by them; and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Law.

Subject to Sections 2.03(c) and 2.15, amounts used to Cash Collateralize the
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above
shall be applied to satisfy drawings under such Letters of Credit as they occur.
If any amount remains on deposit as Cash Collateral after all Letters of Credit
have either been fully drawn or expired, such remaining amount shall be applied
to the other Obligations, if any, in the order set forth above.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01 Appointment and Authority.

Each of the Lenders, the L/C Administrator and each Fronting Bank hereby
irrevocably appoints Wells Fargo to act on its behalf as the Administrative
Agent hereunder and under the other Loan 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, the Lenders, the L/C Administrator and each Fronting Bank,
and neither the Borrower nor any other Loan Party 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 Borrower 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;

 

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(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 the 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 a Loan Party, a
Lender or a Fronting Bank.

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.

9.04 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (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, or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or a Fronting Bank, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or such Fronting Bank unless the Administrative Agent shall have received
notice to the contrary from such Lender or such Fronting Bank prior to the
making of such Loan or the issuance of such Letter of Credit. The Administrative
Agent may consult with legal counsel (who may be counsel for any Loan Party),
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.

 

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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, the Fronting Banks, the L/C
Administrator and the Loan Parties. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, 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, the L/C Administrator and the
Fronting Banks, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that if the Administrative Agent shall
notify the Loan Parties 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 or the Fronting Banks 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, the L/C Administrator and each Fronting Bank directly, until
such time as the Required Lenders appoint a successor Administrative Agent as
provided for above 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 Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower 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 Wells Fargo as Administrative Agent pursuant to this
Section shall also constitute its resignation as a Fronting Bank, L/C
Administrator and Swing Line Lender. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such

 

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successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Fronting Bank, L/C Administrator and Swing
Line Lender, (b) the retiring Fronting Bank, L/C Administrator and Swing Line
Lender shall be discharged from all of their respective duties and obligations
hereunder or under the other Loan Documents, and (c) the successor Fronting Bank
and L/C Administrator shall issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or make
other arrangements satisfactory to the retiring Fronting Bank and L/C
Administrator to effectively assume the obligations of the retiring Fronting
Bank and L/C Administrator with respect to such Letters of Credit.

9.07 Non-Reliance on Administrative Agent and Other Lenders. Each Lender, each
Fronting Bank and the L/C Administrator each acknowledges that it has,
independently and without reliance upon the Administrative Agent, any Fronting
Bank, L/C Administrator 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 and
each Fronting Bank also acknowledges that it will, independently and without
reliance upon the Administrative Agent, any other Lender, any other Fronting
Bank 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, no
Co-Syndication Agent listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity as applicable, as a Lender, Administrative
Agent, L/C Administrator or Fronting Bank hereunder.

9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation 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 Loan Parties) shall be entitled and
empowered, by intervention in such proceeding or otherwise

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations 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, Fronting
Banks, L/C Administrator and the Administrative Agent (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Lenders, the Fronting Banks, L/C Administrator and the Administrative Agent and
their respective agents and counsel and all other amounts due the Lenders, the
Fronting Banks, L/C Administrator and the Administrative Agent under
Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial proceeding;
and

(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

 

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender, each Fronting Bank and the L/C Administrator 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 and the
Fronting Banks or the L/C Administrator, 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, the L/C
Administrator or any Fronting Bank any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender
or to authorize the Administrative Agent to vote in respect of the claim of any
Lender, the L/C Administrator or any Fronting Bank in any such proceeding.

9.10 No Other Duties, etc. Anything herein to the contrary notwithstanding, none
of the Joint Lead Arrangers, Joint Book Runners, Co-Syndication Agents,
Co-Documentation Agents or Managing Agents listed on the cover page hereof or
Schedule or signature pages hereto shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents, except
in their capacity, as applicable, as the Administrative Agent, Swing Line
Lender, LC Issuer, L/C Administrator or Lender.

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 Loan Party
therefrom, shall be effective unless in writing signed by the Required Lenders
(or by the Administrative Agent at the request and on behalf of the Required
Lenders) and the Loan Parties, 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(a) without the written consent
of each Lender;

(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 of principal, interest, fees or other amounts due to the Lenders (or any
of them) hereunder or under any other Loan Document without the written consent
of each Lender directly affected thereby;

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or (subject to clause (v) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other
Loan Document without

 

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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 any Loan Party to
pay interest or Letter of Credit Fees at the Default Rate or (ii) to amend any
financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
L/C Borrowing or to reduce any fee payable hereunder;

(e) change Section 2.13 or Section 8.03 in a manner that would alter the pro
rata sharing of payments required thereby or change Section 2.06 in a manner
that would alter the pro rata allocation of reductions in the Aggregate
Commitment, in the case of each of the foregoing without the written consent of
each Lender;

(f) 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; or

(g) release the Guaranty provided in Section 10.19,

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by a Fronting Bank in addition to the Lenders required above,
affect the rights or duties of such Fronting Bank under this Agreement or any
Issuer Document relating to any Letter of Credit issued or to be issued by it;
(ii) no amendment, waiver or consent shall, unless in writing and signed by the
L/C Administrator in addition to the Lenders required above, affect the rights
or duties of the L/C Administrator under this Agreement or any Issuer Document
relating to any Letter of Credit issued or to be issued by it; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iv) 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; (v) the
Fee Letters may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto; and (vi) notwithstanding anything
herein to the contrary, no amendment or amendment and restatement of this
Agreement which is in all other respects approved by the Lenders in accordance
with this Section 10.01 shall require the consent or approval of any Lender
(A) which immediately after giving effect to such amendment or amendment and
restatement, shall have no Commitment or other obligation to maintain or extend
credit under this Agreement (as so amended or amended and restated), including,
without limitation, any obligation in respect of any drawing under or
participation in any Letter of Credit and (B) which, substantially
contemporaneously with the effectiveness of such amendment or amendment and
restatement, is paid in full all amounts owing to it hereunder (including,
without limitation principal, interest and fees, but excluding contingent
obligations that are not due and payable and any amounts secured by collateral
arrangements on terms and, as applicable, from a financial institution, that are
satisfactory to such Lender in its sole discretion). Notwithstanding anything to
the contrary herein, no Defaulting Lender shall have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender.

 

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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 Loan Parties, the Administrative Agent, the L/C Administrator or a
Fronting Bank or the Swing Line 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 and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications 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 and other
communications 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,
L/C Administrator and the Fronting Banks hereunder 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 notices to any Lender or the Applicable Issuing
Party pursuant to Article II if such Lender or the Applicable Issuing Party, 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 Loan Party 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
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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.

(c) Change of Address, Etc. Each of the Loan Parties, the Administrative Agent,
the L/C Administrator, any Fronting Bank, and the Swing Line 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 Loan Parties, the Administrative Agent, any Fronting
Bank, the L/C Administrator and the Swing Line 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. Furthermore, each Public Lender agrees to cause at least one
individual at or on behalf of such Public Lender to at all times have selected
the “Private Side Information” or similar designation on the content declaration
screen of the Platform in order to enable such Public Lender or its delegate, in
accordance with such Public Lender’s compliance procedures and Applicable Law,
including United States Federal and state securities Laws, to make reference to
Borrower Materials that are not made available through the “Public Side
Information” portion of the Platform and that may contain material non-public
information with respect to the Borrower or its securities for purposes of
United States Federal or state securities laws.

(d) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative
Agent, the L/C Administrator, the Fronting Banks and the Lenders shall be
entitled to rely and act upon any notices (including telephonic Revolving Loan
Notices and Swing Line Loan Notices) purportedly given by or on behalf of the
Loan Parties 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. Each Loan Party shall indemnify
the Administrative Agent, the L/C Administrator, the Fronting Banks, 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 Loan Parties. 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, the L/C
Administrator, any Fronting Bank 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.

 

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10.04 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. Each Loan Party shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, 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 reasonable out-of-pocket expenses incurred by the
Applicable Issuing Party in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) all reasonable out-of-pocket expenses incurred by the Administrative
Agent, any Lender or the Applicable Issuing Party (including the fees, charges
and disbursements of any outside counsel for the Administrative Agent, any
Lender or the Applicable Issuing Party) 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 or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

(b) INDEMNIFICATION BY THE LOAN PARTIES. EACH LOAN PARTY SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT (AND ANY SUB-AGENT THEREOF), EACH LENDER, EACH FRONTING
BANK, THE L/C ADMINISTRATOR, 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 REASONABLE FEES, CHARGES AND DISBURSEMENTS OF
ANY COUNSEL FOR ANY INDEMNITEE), INCURRED BY ANY INDEMNITEE OR ASSERTED AGAINST
ANY INDEMNITEE BY ANY THIRD PARTY OR BY ANY LOAN PARTY 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 OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, (ii) ANY LOAN OR LETTER OF CREDIT OR THE USE OR
PROPOSED USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE L/C ISSUER
TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS
PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS
OF SUCH LETTER OF CREDIT), (iii) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF
HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR
ANY OF ITS SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO
THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (iv) ANY ACTUAL OR PROSPECTIVE
CLAIM, LITIGATION, INVESTIGATION OR

 

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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 LOAN PARTY, 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 NON-APPEALABLE JUDGMENT TO HAVE RESULTED
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (y) RESULT
FROM A CLAIM BROUGHT BY ANY LOAN PARTY AGAINST AN INDEMNITEE FOR BREACH IN BAD
FAITH OF SUCH INDEMNITEE’S OBLIGATIONS HEREUNDER OR UNDER ANY OTHER LOAN
DOCUMENT, IF SUCH LOAN PARTY HAS OBTAINED A FINAL AND NON-APPEALABLE JUDGMENT IN
ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT OF COMPETENT JURISDICTION.

(c) Reimbursement by Lenders. To the extent that the Loan Parties for any reason
fail 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),
the L/C Administrator, the Fronting Banks or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the L/C Administrator, the Fronting Banks 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) or the Applicable Issuing Party 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) or the Applicable Issuing Party 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 Loan Parties 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 Letter of Credit 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 by it 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.

 

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(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, the L/C Administrator or any Fronting Bank, 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
Loan Parties is made to the Administrative Agent, any Fronting Bank, the L/C
Administrator or any Lender, or the Administrative Agent, the L/C Administrator,
such Fronting Bank 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, such
Fronting Bank, the L/C Administrator 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,
each Fronting Bank and the L/C Administrator 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, the L/C Administrator and the Fronting Banks
under clause (b) of the preceding sentence shall survive the payment in full of
the Obligations and the termination of this Agreement.

10.06 Successors and Assigns; Participations.

(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 neither Loan Party may
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
subsection (b) of this Section, (ii) by way of participation in accordance with
the provisions of subsection (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection (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 subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Administrator, the Fronting Banks and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

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(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b) direct obligations under and participations in
L/C Obligations) 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 subsection (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, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed).

(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 Loans or the Commitment
assigned;

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) 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;

(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 with a Commitment, an Affiliate of such Lender or
an Approved Fund with respect to such Lender; and

(C) the consents of each Fronting Bank and the Swing Line Lender (such consents
not to be unreasonably withheld or delayed) shall be required for any
assignment.

 

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(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 of $3,500 for each assignment (provided, that
only one such fee will be payable in connection with simultaneous assignments to
two or more Approved Funds by a Lender), and the assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

(v) No Assignment to Certain Persons. No such assignment shall be made (A) to
the Borrower or any of the Borrower’s Affiliates or Subsidiaries or (B) unless
such assignment is approved by the Borrower and a Fronting Bank has agreed to
front for such assignee in respect of Several Letters of Credit, to any Person
which is not an NAIC Approved Bank.

(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 subsection (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 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 3.04, 3.05 and 10.04 with respect to
facts and circumstances occurring prior to the effective date of such
assignment; PROVIDED, HOWEVER, THAT NO LENDER MAY ASSIGN ANY OBLIGATION UNDER A
SEVERAL LETTER OF CREDIT UNLESS SUCH SEVERAL LETTER OF CREDIT IS EITHER AMENDED
OR RETURNED BY THE BENEFICIARY AND REISSUED BY THE ADMINISTRATIVE AGENT,
REMOVING OR AMENDING, AS THE CASE MAY BE, THE ASSIGNING LENDER’S PERCENTAGE
OBLIGATIONS AND REPLACING OR AMENDING THE SAME WITH A PERCENTAGE OBLIGATIONS OF
THE ELIGIBLE ASSIGNEE. Upon request, the 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 subsection 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
subsection (d) of this Section.

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices in Charlotte, North
Carolina, a copy of each Assignment and Assumption and each joinder agreement
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amounts of (and stated
interest on) the Loans and L/C

 

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Obligations 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 shall 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. In addition, the Administrative Agent shall maintain on the Register
information regarding the designation, and revocation of designation, of any
Lender as a Defaulting Lender. The Register shall be available for inspection by
the Borrower and any Lender (but only to the extent of entries in the Register
that are applicable to such Lender), at any reasonable time and from time to
time upon reasonable prior notice.

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
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
participation in L/C Obligations) 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 Loan Parties, the Administrative Agent, the L/C
Administrator, the Fronting Banks, the Swing Line Lender and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver or modification described in
Section 10.01 that directly affects such Participant and could not be affected
by a vote of the Required Lenders.

The Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.01 and 3.04 (subject to the requirements and limitations therein,
including the requirements under Section 3.01(g) (it being understood that the
documentation required under Section 3.01(g) shall be delivered to the Lender
granting such participation)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Section 10.13 as if it were an assignee under paragraph (b) of this Section; and
(B) shall not be entitled to receive any greater payment under Sections 3.01 or
3.04, with respect to any participation, than its participating Lender would
have been entitled to receive, except to the extent such entitlement to receive
a greater payment results from a Change in Law that occurs after the Participant
acquired the applicable participation. 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.

Each Lender that sells a participation shall, acting solely for this purpose as
a non-fiduciary agent of the Borrower, maintain a register on which it enters
the name and address of each Participant and the principal amounts of (and
stated interest on) each Participant’s interest

 

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in the Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, letter of credit or other obligation is
in registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

(e) [Reserved].

(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 to secure
obligations of such Lender, including without limitation 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 L/C Issuer or Swing Line Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Wells
Fargo assigns all of its Commitment and Loans pursuant to subsection (b) above,
Wells Fargo may, (i) upon 30 days’ notice to the Loan Parties and the Lenders,
resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Loan Parties,
resign as Swing Line Lender. In the event of any such resignation as L/C Issuer
or Swing Line Lender, the Loan Parties shall be entitled to appoint from among
the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Loan Parties to appoint any such successor shall
affect the resignation of Wells Fargo as L/C Issuer or Swing Line Lender, as the
case may be. If Wells Fargo resigns as L/C Issuer, it shall retain all the
rights and obligations of the Fronting Bank hereunder with respect to all
Letters of Credit which it fronted and which are outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
If Wells Fargo resigns as Swing Line Lender, it shall retain all the rights of
the Swing Line Lender provided for hereunder with respect to Swing

 

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Line 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
or fund risk participations in outstanding Swing Line Loans pursuant to
Section 2.04(c).

10.07 Confidentiality. Each of the Administrative Agent, the Lenders, the L/C
Issuer and the L/C Administrator 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 partners, directors,
officers, employees, agents, advisors, external auditors and 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 NAIC), (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 containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to any Loan Party and
its obligations, (g) with the consent of the Loan Parties or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Administrative Agent,
any Lender, the L/C Issuer, the L/C Administrator or any of their respective
Affiliates on a non-confidential basis from a source other than a Loan Party. In
addition, upon reasonable advance notice to the Borrower, the Administrative
Agent and Lenders may disclose the existence of this Agreement and information
about this Agreement to market data collectors, similar service providers to the
lending industry, and service providers to the Administrative Agent and Lenders,
and the Administrative Agent or any of its Affiliates may place customary
“tombstone” advertisements relating hereto in publications (including
publications circulated in electronic form) of its choice at its own expense
(which shall be subject to review and comment by the Borrower prior to
publication).

For purposes of this Section 10.07, “Information” means all information received
from any Loan Party or any Subsidiary relating to a Loan Party or a Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent or any Lender on a non-confidential basis
prior to disclosure by any Loan Party or any Subsidiary; provided that, in the
case of information received from a Loan Party or a Subsidiary after the date
hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section 10.07 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, the Lenders, any L/C Issuer and the L/C
Administrator acknowledges that (a) the Information may include material
non-public information concerning a Loan Party or a Subsidiary, as the case may
be, (b) it has developed compliance procedures regarding the use of material
non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including United States Federal
and state securities Laws.

 

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10.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Administrator, each Fronting Bank and each of
their respective Affiliates is hereby authorized at any time and from time to
time, 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, the L/C Administrator, such Fronting
Bank or any such Affiliate to or for the credit or the account of any Loan Party
against any and all of the obligations of such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender, the L/C
Administrator or such Fronting Bank, irrespective of whether or not such Lender
or L/C Administrator or Fronting Bank shall have made any demand under this
Agreement or any other Loan Document and although such obligations of such Loan
Party may be contingent or unmatured or are owed to a branch or office of such
Lender or the L/C Administrator or the Fronting Bank different from the branch
or office holding such deposit or obligated on such indebtedness. The rights of
each Lender, the L/C Administrator, each Fronting Bank and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, the L/C Administrator, such
Fronting Bank or their respective Affiliates may have. Each Lender, the L/C
Administrator and each Fronting Bank agrees to notify the Loan Parties 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 Highest Lawful Rate. If the Administrative Agent
or any Lender shall receive interest in an amount that exceeds the Highest
Lawful Rate, the excess interest shall be applied to the principal of the Loans
or, if it exceeds such unpaid principal, refunded to the applicable Loan Party.
In determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Highest Lawful Rate, such Person
may, to the extent permitted 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 or other electronic imaging means
shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

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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 Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

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 Loan Party 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 is a Defaulting Lender then the Loan Parties
may, at their 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
procured by the Borrower that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided that:

(a) the Loan Parties shall have paid to the Administrative Agent the assignment
fee specified in Section 10.06(b);

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, 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
Loan Parties (in the case of all other amounts);

(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; and

(d) such assignment does not conflict with Applicable Laws.

 

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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 Loan Parties 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 REFERENCE TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS UNDER FEDERAL LAW.

(b) SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE 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, ANY LENDER, THE L/C
ADMINISTRATOR OR ANY FRONTING BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY
LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY 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 AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (c) 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.

 

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(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02 (EXCLUDING, HOWEVER,
ANY ELECTRONIC COMMUNICATIONS PERMITTED PURSUANT TO SUCH SECTION). NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15 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.

10.16 Exceptions to Covenants. Neither the Borrower nor any Subsidiary shall be
deemed to be permitted to take any action or fail to take any action which is
permitted as an exception to any of the covenants contained herein or which is
within the permissible limits of any of the covenants contained herein if such
action or omission would result in the breach of any other covenant contained
herein.

10.17 No Strict Construction. Each of the parties hereto represents to each
other party hereto that it has discussed this Agreement and the other Loan
Documents with its counsel. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and the other Loan Documents. In the
event of an ambiguity or question of intent or interpretation arises, this
Agreement and the other Loan Documents shall be construed as if drafted jointly
by the parties hereto and thereto and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement or any other Loan Document.

10.18 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrower that pursuant to the requirements of
the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies the Loan Parties, which information includes the name and address of
each Loan Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify the Borrower in accordance with
the Act. Each Loan Party shall, promptly following a request by the
Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender requests in order to
comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Act.

 

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10.19 Guaranty.

(a) Guaranty of Payment. The Borrower hereby absolutely, irrevocably and
unconditionally guarantees prompt, full and complete payment when due, whether
at stated maturity, upon acceleration or otherwise, and at all times thereafter,
of all Obligations (the “Guaranteed Debt”). The Borrower agrees that if TMK
shall fail to pay when due any Guaranteed Debt, the Borrower will promptly pay
the same without notice or demand whatsoever. This is a guaranty of payment, not
a guaranty of collection.

(b) Acceptance of Guaranty; No Setoffs. The Borrower waives notice of the
acceptance of this Guaranty and of the extension or incurrence of the Guaranteed
Debt or any part thereof. The Borrower further waives all setoffs and
counterclaims and presentment, protests, notice, filing of claims with a court
in the event of receivership, bankruptcy or reorganization of TMK, demand or
action on delinquency in respect of the Guaranteed Debt or any part thereof,
including any right to require the Administrative Agent, the L/C Administrator,
any L/C Issuer, any Fronting Bank or the Lenders (collectively, the “Guaranteed
Parties” and each a “Guaranteed Party”) to sue TMK, any other guarantor or any
other Person obligated with respect to the Guaranteed Debt or any part thereof,
or otherwise to enforce payment thereof against any collateral securing the
Guaranteed Debt or any part thereof.

(c) Nature of Guaranty; Continuing, Absolute and Unconditional. The Borrower
hereby agrees that, to the fullest extent permitted by Law, its obligations
hereunder shall be continuing, absolute and unconditional under any and all
circumstances and not subject to any reduction, limitation, impairment,
termination, defense (other than indefeasible payment in full), setoff,
counterclaim or recoupment whatsoever (all of which are hereby expressly waived
by it to the fullest extent permitted by Law), whether by reason of any claim of
any character whatsoever, including, without limitation, any claim of waiver,
release, surrender, alteration or compromise. The validity and enforceability of
this Guaranty shall not be impaired or affected by any of the following: (i) any
extension, modification or renewal of, or indulgence with respect to, or
substitution for, the Guaranteed Debt or any part thereof or any agreement
relating thereto at any time; (ii) any failure or omission to perfect or
maintain any lien on, or preserve rights to, any security or collateral or to
enforce any right, power or remedy with respect to the Guaranteed Debt or any
part thereof or any agreement relating thereto, or any collateral securing the
Guaranteed Debt or any part thereof; (iii) any waiver of any right, power or
remedy or of any default with respect to the Guaranteed Debt or any part thereof
or any agreement relating thereto or with respect to any collateral securing the
Guaranteed Debt or any part thereof; (iv) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Debt or any part
thereof, any other guaranties with respect to the Guaranteed Debt or any part
thereof, or any other obligations of any person or entity with respect to the
Guaranteed Debt or any part thereof; (v) the enforceability or validity of the
Guaranteed Debt or any part thereof or the genuineness, enforceability or
validity of any agreement relating thereto or with respect to any collateral
securing the Guaranteed Debt

 

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or any part thereof; (vi) the application of payments received from any source
to the payment of indebtedness other than the Guaranteed Debt, any part thereof
or amounts which are not covered by this Guaranty even though any Guaranteed
Party might lawfully have elected to apply such payments to any part or all of
the Guaranteed Debt or to amounts which are not covered by this Guaranty;
(vii) any change of ownership of TMK or the insolvency, bankruptcy or any other
change in the legal status of TMK; (viii) any change in, or the imposition of,
any Law, decree, or other governmental act which does or might impair, delay or
in any way affect the validity, enforceability or the payment when due of the
Guaranteed Debt; (ix) the failure of TMK to maintain in full force, validity or
effect or to obtain or renew when required all governmental, insurance and other
approvals, licenses or consents required in connection with the Guaranteed Debt
or this Guaranty, or to take any other action required in connection with the
performance of all obligations pursuant to the Guaranteed Debt or this Guaranty;
(x) the existence of any claim, setoff or other rights which the Borrower may
have at any time against TMK or any other guarantor or any other Person in
connection herewith or with any unrelated transaction; (xi) the Administrative
Agent, the L/C Administrator and the Lenders’ election, in any case or
proceeding instituted under chapter 11 of the United States Bankruptcy Code or
any applicable federal, state or foreign bankruptcy or other similar law, of the
application of Section 1111(b)(2) of the United States Bankruptcy Code or other
similar provision under any applicable federal, state or foreign bankruptcy or
other similar Law; (xii) any borrowing, use of Cash Collateral, or grant of a
security interest by TMK, as debtor in possession , under Section 363 or 364 of
the United States Bankruptcy Code or any applicable federal, state or foreign
bankruptcy or other similar Law; (xiii) the disallowance of all or any portion
of any of the Guaranteed Parties’ claims for repayment of the Guaranteed Debt
under Section 502 or 506 of the United States Bankruptcy Code or any applicable
federal, state or foreign bankruptcy or other similar Law; or (xiv) any other
fact or circumstance which might otherwise constitute grounds at Law or equity
for the discharge or release of the Borrower from its obligations hereunder, all
whether or not the Borrower shall have had notice or knowledge of any act or
omission referred to in the foregoing clauses (i) through (xiv) of this
paragraph. It is agreed that the Borrower’s liability hereunder is independent
of any other guaranties or other obligations at any time in effect with respect
to the Guaranteed Debt or any part thereof, and that the Borrower’s liability
hereunder may be enforced regardless of the existence, validity, enforcement or
non-enforcement of any such other guaranties or other obligations or any
provision of any Applicable Law purporting to prohibit payment by TMK of the
Guaranteed Debt in the manner agreed upon among the Guaranteed Parties and TMK.

(d) Dealings with TMK. Credit may be granted or continued from time to time by
the L/C Administrator or the Lenders to TMK without notice to or authorization
from the Borrower regardless of TMK’s financial or other condition at the time
of any such grant or continuation. No Guaranteed Party shall have an obligation
to disclose or discuss with the Borrower its assessment of the financial
condition of TMK.

(e) Subrogation. Until the irrevocable payment in full of the Obligations and
termination of all commitments which could give rise to any Obligation, the
Borrower shall have no right of subrogation with respect to the Guaranteed Debt
and hereby waives any right to enforce any remedy which any Guaranteed Party now
has or may hereafter

 

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have against TMK, any endorser or any other guarantor of all or any part of the
Guaranteed Debt, and the Borrower hereby waives any benefit of, and any right to
participate in, any security or collateral given to any Guaranteed Party to
secure payment of the Guaranteed Debt or any part thereof or any other liability
of TMK to any Guaranteed Party. Upon such irrevocable payment and termination,
TMK shall indemnify the Borrower for the full amount of any payment made by the
Borrower under this Guaranty and the Borrower shall be subrogated to the rights
of the Person to whom such payment shall have been made to the extent of such
payment.

(f) Collateral. The Borrower authorizes the Guaranteed Parties to take any
action or exercise any remedy with respect to any non-Cash Collateral from time
to time securing the Guaranteed Debt, which the Guaranteed Parties in their sole
discretion shall determine, without notice to the Borrower. In the event the
Guaranteed Parties in their sole discretion elect to give notice of any action
with respect to any non-Cash Collateral securing the Guaranteed Debt or any part
thereof, ten (10) days’ written notice mailed to the Borrower by ordinary mail
at the address set forth in Schedule 10.02 shall be deemed reasonable notice of
any matters contained in such notice. The Borrower consents and agrees that no
Guaranteed Party shall be under any obligation to marshal any assets in favor of
the Borrower or against or in payment of any or all of the Guaranteed Debt.

(g) Rights to Payments, Etc. In the event that acceleration of the time for
payment of any of the Guaranteed Debt is stayed upon the insolvency, bankruptcy
or reorganization of TMK, or otherwise, all such amounts shall nonetheless be
payable by the Borrower forthwith upon demand by a Guaranteed Party. The
Borrower further agrees that, to the extent that TMK makes a payment or payments
to any of the Guaranteed Parties on the Guaranteed Debt, or any Guaranteed Party
receives any proceeds of collateral securing the Guaranteed Debt, which payment
or receipt of proceeds or any part thereof is subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be returned or repaid
to TMK, its estate, trustee, receiver, debtor in possession or any other party,
including, without limitation, the Borrower, under any insolvency or bankruptcy
Law, state or federal Law, common Law or equitable cause, then to the extent of
such payment, return or repayment, the obligation or part thereof which has been
paid, reduced or satisfied by such amount shall be reinstated and continued in
full force and effect as of the date when such initial payment, reduction or
satisfaction occurred.

(h) No Waiver. No delay on the part of any Guaranteed Party in the exercise of
any right, power or remedy shall operate as a waiver thereof, and no single or
partial exercise by any Guaranteed Party of any right, power or remedy shall
preclude any further exercise thereof; nor shall any amendment, supplement,
modification or waiver of any of the terms or provisions of this Guaranty be
binding upon any Guaranteed Party, except as expressly set forth in writing duly
signed and delivered on the L/C Administrator’s and the Lenders’ behalf by the
Administrative Agent. The failure by any Guaranteed Party at any time or times
hereafter to require strict performance by TMK or the Borrower of any of the
provisions, warranties, terms and conditions contained in any promissory note,
security agreement, agreement, guaranty, instrument or document now or at any
time or times hereafter executed pursuant to the terms of, or in connection
with, this Agreement by TMK or the Borrower and delivered to the Guaranteed
Parties shall

 

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not waive, affect or diminish any right of any Guaranteed Party at any time or
times hereafter to demand strict performance thereof, and such right shall not
be deemed to have been waived by any act or knowledge of any Guaranteed Party,
their agents, officers or employees, unless such waiver is contained in an
instrument in writing duly signed and delivered on the L/C Administrator’s,
Fronting Banks’ and the Lenders’ behalf by the Administrative Agent. No waiver
by any Guaranteed Party of any default shall operate as a waiver of any other
default or the same default on a future occasion, and no action by any
Guaranteed Party permitted hereunder shall in any way affect or impair any
Guaranteed Party’s rights or powers, or the obligations of the Borrower under
this Guaranty. Any determination by a court of competent jurisdiction of the
amount of any Guaranteed Debt owing by TMK to any Guaranteed Party shall be
conclusive and binding on the Borrower irrespective of whether the Borrower was
a party to the suit or action in which such determination was made.

(i) Setoff. In addition to and without limitation of any rights, powers or
remedies of the Guaranteed Parties under Applicable Law, any time after maturity
of the Guaranteed Debt, whether by acceleration or otherwise, the Guaranteed
Parties may, in their sole discretion, with notice after the fact to the
Borrower and regardless of the acceptance of any security or collateral for the
payment hereof, appropriate and apply toward the payment of the Guaranteed Debt
(i) any indebtedness due to or to become due from any of the Guaranteed Parties
to the Borrower, and (ii) any moneys, credits or other property belonging to the
Borrower (including all account balances, whether provisional or final and
whether or not collected or available) at any time held by or coming into the
possession of any of the Guaranteed Parties or any Lender whether for deposit or
otherwise.

(j) Severability. Wherever possible, each provision of this Section 10.19 shall
be interpreted in such manner as to be effective and valid under Applicable Law,
but if any provision of this Section 10.19 shall be prohibited by or invalid
under such Law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Section 10.19.

(k) Miscellaneous. It is understood that while the amount of the Guaranteed Debt
guaranteed hereby is not limited, if in any action or proceeding involving any
state, federal or foreign bankruptcy, insolvency or other Law affecting the
rights of creditors generally, this Guaranty would be held or determined to be
void, invalid or unenforceable on account of the amount of the aggregate
liability under this Guaranty with respect to the Borrower, then,
notwithstanding any other provision of this Guaranty to the contrary, the
aggregate amount of such liability shall, with respect to the Borrower, without
any further action of the Guaranteed Parties, be automatically limited and
reduced with respect to the Borrower to the highest amount which is valid and
enforceable as determined in such action or proceeding. The obligations of the
Borrower under this Section 10.19 shall survive the termination of this
Agreement.

10.20 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.

 

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10.21 Section 11.16 Effectiveness of the Amendment and Restatement; Existing
Credit Agreement. This Agreement shall become effective on the Restatement
Effective Date, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. Until this
Agreement becomes effective, the Existing Credit Agreement shall remain in full
force and effect and shall not be affected hereby. On the Restatement Effective
Date, (i) all obligations of each Loan Party under the Existing Credit Agreement
shall become obligations of such Loan Party hereunder, provided that the
provisions of the Existing Credit Agreement shall be superseded by the
provisions hereof, (ii) each of the Lenders shall have the interest shown
opposite its name on Schedule 2.1 to this Agreement, (iii) each Existing Lender
shall, upon receipt of all amounts due and payable to it under the Existing
Credit Agreement on the Restatement Effective Date, be released from its
obligations under the Existing Credit Agreement and (iv) each Existing Lender
party hereto hereby waives any notice requirement under Section 2.06 of the
Existing Credit Agreement with respect to the amendment and restatement of the
Existing Credit Agreement or repayment of amounts thereunder as contemplated
hereby. Except as otherwise expressly stated hereunder, the term of this
Agreement is for all purposes deemed to have commenced on the Restatement
Effective Date.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

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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.

 

TORCHMARK CORPORATION By:  

/s/ W.M. Pressley

Name:  

W. Michael Pressley

Title:  

Executive V.P. and Chief Investment Officer

TMK RE, LTD. By:  

/s/ W.M. Pressley

Name:  

W. Michael Pressley

Title:  

President

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

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swing Line
Lender, L/C Administrator and as a Lender By:  

/s/ K. Hanke

Name:  

Karen Hanke

Title:  

Managing Director

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

BANK OF AMERICA, N.A., as Syndication Agent and as a Lender By:  

/s/ Jason Cassity

Name:  

Jason Cassity

Title:  

Director

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

REGIONS BANK, as Syndication Agent and as a Lender By:  

/s/ David Moore, SVP

Name:  

David Moore

Title:  

Senior Vice President

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

US BANK NATIONAL ASSOCIATION, as Syndication Agent and as a Lender By:  

/s/ Evan Glass

Name:  

Evan Glass

Title:  

Senior Vice President

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

COMPASS BANK dba BBVA COMPASS By:  

/s/ S. Campuzano

Name:  

Susana Campuzano

Title:  

Senior Vice President

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

SUNTRUST BANK By:  

/s/ Paula Mueller

Name:  

Paula Mueller

Title:  

Director

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

BRANCH BANKING AND TRUST COMPANY By:  

/s/ Sarah Bryson

Name:  

Sarah Bryson

Title:  

Vice President

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

COMERICA BANK By:  

/s/ K.J. Weiss

Name:  

Kyle J. Weiss

Title:  

Vice President

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

KEYBANK NATIONAL ASSOCIATION By:  

/s/ James Cribbet

Name:  

James Cribbet

Title:  

Senior Vice President

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

THE NORTHERN TRUST COMPANY By:  

/s/ Peter J. Hallan

Name:  

Peter J. Hallan

Title:  

Vice President

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

SCHEDULE 1.01

COLLATERAL ADVANCE RATES

 

Category of Investment/Security1

   Advance Rate
Percentage  

Cash or Wells Fargo Bank certificates of deposit and savings accounts

     100 % 

Listed Money Market funds

     95 % 

U.S. Government Bills, Notes, and U.S. Government guaranteed or sponsored agency
securities

  

Maturity 52 years or less

     90 % 

Maturity greater than 5 years

     85 % 

High Grade Municipal Bonds (AAA/Aaa to AA-/Aa33)

  

Maturity 5 years or less

     80 % 

Maturity greater than 5 years

     70 % 

High Grade Corporate Bonds/Notes (AAA/Aaa, AA/Aa, non-convertible, NYSE traded)

  

Maturity 5 years or less

     85 % 

Maturity greater than 5 years

     75 % 

Intermediate Grade Corporate Bonds/Notes (A+/A1 to A-/A3, non-convertible, NYSE
traded)

  

Maturity 5 years or less

     80 % 

Maturity greater than 5 years

     70 % 

 

1  Other than Cash and U.S. Government no single issuer shall comprise greater
than 10% of the aggregate Borrowing Base

2  Maturity of all instruments means the time remaining until the final maturity
date from the date of determination

3  To qualify for indicative advance rates, applicable securities must have
indicated rating from both Moody’s and S&P; the lower of the two ratings shall
apply

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

SCHEDULE 2.01

COMMITMENTS AND APPLICABLE PERCENTAGES

 

Institution

   Commitment      Applicable Percentage  

Wells Fargo Bank, National Association

   $ 90,000,000         12.000000000 % 

Bank of America, N.A.

   $ 90,000,000         12.000000000 % 

Regions Bank

   $ 90,000,000         12.000000000 % 

U.S. Bank National Association

   $ 90,000,000         12.000000000 % 

BBVA Compass

   $ 77,500,000         10.333333333 % 

SunTrust Bank

   $ 77,500,000         10.333333333 % 

Branch Banking and Trust Company

   $ 67,500,000         9.000000000 % 

Comerica Bank

   $ 67,500,000         9.000000000 % 

KeyBank National Association

   $ 50,000,000         6.666666667 % 

The Northern Trust Company

   $ 50,000,000         6.666666667 % 

Total:

   $ 750,000,000      

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

SCHEDULE 2.03

EXISTING LETTERS OF CREDIT

 

Letter of Credit Number

   Amount      Applicant

SM238336W

   $ 84,000,000.00       TMK Re Ltd.

SM238339W

   $ 114,000,000.00       TMK Re Ltd.

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

SCHEDULE 5.05

FINANCIAL STATEMENTS; MATERIAL ADVERSE EFFECTS

None

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

SCHEDULE 5.06

LITIGATION

None

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

SCHEDULE 5.13

SUBSIDIARIES; EQUITY INTERESTS

 

(A) Each of the Subsidiaries listed below is 100% owned, directly or indirectly,
by Torchmark Corporation.

 

Company

  

State of Domicile

AILIC Receivables Corporation (ARC)    Indiana American Income Life Insurance
Company (AIL)    Indiana American Income Marketing Services, Inc. (AIMS)   
Texas Brown-Service Funeral Homes Company, Inc. (Brown Service)    Alabama
Family Heritage Life Insurance Company of America (FHL)    Ohio First United
American Life Insurance Company (First UA)    New York Specialized Advertising
Group, Inc. (SAG)    Texas Globe Life And Accident Insurance Company (Globe)   
Nebraska Globe Marketing and Advertising Distributors LLC (GMAD)    Delaware
Globe Marketing Services, Inc. (Globe Marketing)    Oklahoma Liberty National
Auto Club, Inc. (Auto Club)    Alabama Liberty National Life Insurance Company
(LNL)    Nebraska National Income Life Insurance Company (NILCO)    New York TMK
Buildings Corporation (TBC)    Texas TMK Re, Ltd. (TMK Re)    Bermuda Torchmark
Insurance Agency, Inc. (TIA)    Alabama United American Insurance Company (UA)
   Nebraska Union Heritage Life Assurance Company Limited (Union Heritage)   
Ireland

TMK Properties, LP is a Texas limited partnership, whose general partner is TMK
Buildings Corporation (1%) and whose limited partner is Torchmark Corporation
(99%).

Royalton 6001, Ltd is an Ohio limited liability company in which FHL has a 50%
ownership interest and an unaffiliated entity has a 50% ownership interest.

 

(B) None.

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

SCHEDULE 5.19

INSURANCE LICENSES

 

(A) American Income Life Insurance Company (see attached)

 

(B) Globe Life And Accident Insurance Company (see attached)

 

(C) Liberty National Life Insurance Company (see attached)

 

(D) United American Insurance Company (see attached)

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

SCHEDULE 5.19

INSURANCE LICENSES - AMERICAN INCOME LIFE INSURANCE COMPANY

 

Jurisdiction

  

Types of Insurance

Alabama    Life, Disability and Annuities Alaska    Life; Health Arizona   
Disability; Life Arkansas    Accident & Health; Accident & Health-Group;
Accident & Health-Medicare Supplemental; Life; Life-Credit; Life-Group
California    Disability; Life Colorado    Accident & Health; Annuities; General
Life Connecticut    Accident and Health; Life Non-Participating Delaware   
Life, including Annuities and Health District of Columbia    Group Accident and
Health; Group Life; Individual Accident and Health; Individual Annuities (Fixed
& Variable); Individual Life and Life and Health Florida    Life; Group Life and
Annuities; Accident and Health Georgia    Life, Accident and Sickness Hawaii   
Disability; Life Idaho    Life; Disability (excluding Managed Care) Illinois   
Life; Accident; Health Indiana    Life and Annuities; Accident and Health Iowa
   Accident only (Individual); Accident and Health (Individual); Hospital and
Medical Expense (Individual); Group Accident and Health; Non-cancellable
Accident and Health; Life, includes Credit Life, Variable Life, Annuities,
Variable Annuities and Group Kansas    Life; Accident and Health Kentucky   
Life and Health Insurance Louisiana    Health and Accident; Life Insurance Maine
   Life (including Credit Life); Health (including Credit Health) Maryland   
Health; Life, including Annuities and Health (except Variable Life & Variable
Annuities) Massachusetts    Life-All Kinds; Accident-All Kinds; Health-All Kinds
Michigan    Life & Annuities; Disability Minnesota    Life; Accident and Health
Mississippi    Accident & Health; Life Missouri    Life, Annuities and
Endowments; Accident and Health Montana    Life; Disability Nebraska    Life
Insurance; Sickness and Accident Insurance Nevada    Health-Life & Health
Company; Life New Hampshire    Accident & Health; Life New Jersey    Life;
Health; Annuities; Non-Participating Insurance Only New Mexico    Life & Health

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

North Carolina    Life, including Industrial Sick Benefit Insurance; Annuities
(excluding Variable Annuities); Accident and Health, including
Hospitalization-cancelable and non-cancelable North Dakota    Life & Annuity;
Accident & Health Ohio    Life, Health & Annuities Oklahoma    Life, Accident &
Health Oregon    Health & Life Pennsylvania    Accident and Health; Life and
Annuities Rhode Island    Life; Annuities; Accident & Health South Carolina   
Life; Accident/Health South Dakota    Life; Health Tennessee    Life; Accident &
Health Texas    Life; Accident and Health Utah    Accident & Health-Life;
Annuity-Life; Life; Variable Contract-Life Vermont    Life and annuities;
Accident and Health Virginia    Accident & Sickness; Credit Life; Annuities;
Life; Credit Accident & Sickness Washington    Disability; Life West Virginia   
Life; Accident & Sickness Wisconsin    Life, Accident and Health Wyoming    Life
& Annuities & Disability Canada-Province of Alberta    Accident and Sickness;
Life Canada-Province of British Columbia    Accident, Sickness and Life
Canada-Province of Manitoba    Life, Accident and Sickness Canada-Province of
New Brunswick    Accident and Sickness; Life Canada-Province of Newfoundland and
Labrador    Life, Accident and Sickness Canada-Province of Nova Scotia    Life;
Accident & Sickness Canada-Province of Ontario    Accident and Sickness; Life
Canada-Province of Prince Edward Island    Accident & Sickness; Life
Canada-Province of Quebec    Life; Sickness & Accident Canada-Province of
Saskatchewan    Accident, Life; Sickness Canada-Northwest Territories    Life
and Accident & Sickness Insurance Canada-Yukon Territory    Life, Accident &
Sickness Insurance New Zealand    Life/Accident/Health

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SCHEDULE 5.19

INSURANCE LICENSES - GLOBE LIFE AND ACCIDENT INSURANCE COMPANY

 

Jurisdiction

  

Types of Insurance

Alabama    Life, Disability and Annuities Alaska    Life; Health; Annuities
Arizona    Disability; Life Arkansas    Accident & Health; Accident &
Health-Group; Accident & Health-Medicare Supplement; Life; Life-Credit;
Life-Group California    Life and Disability Colorado    Accident & Health;
Annuities; Credit (Life, A & H); General Life Connecticut    Accident and
Health; Life, non-participating Delaware    Life, including Annuities; Credit
Life; Health and Credit Health District of Columbia    Group Accident & Health;
Group Annuities (Fixed & Variable); Group Life; Individual Accident & Health;
Individual Annuities (Fixed & Variable); Individual Life; Life and Health
Florida    Credit Disability; Accident & Health; Life; Group Life & Annuities;
Credit Life Georgia    Life, Accident and Sickness Hawaii    Accident and Health
or Sickness; Life Idaho    Disability, excluding Managed Care; Life Illinois   
Life, Accident and Health Indiana    Life & Annuities and Accident and Health
Iowa    Accident only (individual); Accident & Health (individual); Hospital &
Medical Expense (individual); Group Accident & Health; Non-cancellable Accident
& Health; Life, includes Credit Life, Variable Life; Annuities; Variable
Annuities & Group Kansas    Life; Accident & Health Kentucky    Life (includes
Annuities) and Health Louisiana    Health and Accident; Life Maine    Life
(including Credit Life); Health (including Credit Health) Maryland    Health;
Life, including Annuities & Health (except Variable Life & Variable Annuities)
Massachusetts    Life-All Kinds; Accident-All Kinds; Health-All Kinds Michigan
   Life & Annuities; Disability Minnesota    Life; Accident & Health Mississippi
   Accident & Health; Life Missouri    Accident & Health; Life, Annuities &
Endowments Montana    Life; Disability Nebraska    Life Insurance; Sickness &
Accident Insurance Nevada    Life; Health New Hampshire    Accident & Health;
Life New Jersey    Life; Health; Non-Participating Insurance Only

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New Mexico    Life and Health North Carolina    Life, including Industrial Sick
Benefit Insurance; Annuities (excluding Variable Annuities); Accident & Health,
including Hospitalization-Cancelable, Non-cancelable, Credit-Small Loans,
Credit-Other than Small Loans North Dakota    Life & Annuity; Accident & Health
Ohio    Life, Health & Annuities Oklahoma    Accident & Health; Life Oregon   
Life; Health Pennsylvania    Accident & Health; Life & Annuities Rhode Island   
Life; Accident & Health and Fixed Annuities South Carolina    Life;
Accident/Health South Dakota    Life; Health; Travel Accident Tennessee    Life;
Credit; Accident & Health Disability Texas    Life; Accident & Health Utah   
Accident & Health-Life; Annuity-Life; Life; Variable Contract-Life Vermont   
Life and/or Health & Accident Virginia    Accident & Sickness; Annuities; Credit
Accident & Sickness; Credit Life; Life Washington    Life; Disability West
Virginia    Life; Accident & Sickness Wisconsin    Disability Insurance; Life
Insurance & Annuities (non-participating) Wyoming    Life and Disability Guam   
Accident & Health; Life

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SCHEDULE 5.19

INSURANCE LICENSES - LIBERTY NATIONAL LIFE INSURANCE COMPANY

 

Jurisdiction

  

Types of Insurance

Alabama    Life, Disability and Annuities Alaska    Life; Health Arizona   
Disability; Life Arkansas    Accident & Health; Accident & Health - Group; Life;
Life - Credit; Life - Group California    Life and Disability Colorado   
Accident & Health; Annuities; General Life Connecticut    Life,
Non-Participating Delaware    Life, including Annuities and Health District of
Columbia    Group Accident and Health, Group Life, Individual Accident and
Health; Individual Life, and Life and Health Florida    Life; Credit Life; Group
Life & Annuities; Accident & Health; Credit Disability Georgia    Life;
Accident; Sickness Hawaii    Accident and Health or Sickness (subclass: all);
Life (subclass: all) Idaho    Disability, excluding Managed Care; Life Illinois
   Life; Accident; Health Indiana    Life & Annuities and Accident and Health
Iowa    Accident only (Individual); Accident and Health (Individual); Hospital
and Medical Expense (Individual); Group Accident and Health; Non-cancellable
Accident and Health; Life, including Credit Life, Variable Life, Annuities,
Variable Annuities; Variable Annuities and Group Kansas    Life; Accident and
Health Kentucky    Life (includes Annuities) and Health Louisiana    Annuities;
Health and Accident; Life Maine    Life (including Credit Life) Maryland   
Health; Life, including Annuities and Health (except Variable Life & Variable
Annuities) Massachusetts    Life-All Kinds; Accident-All Kinds; Health-All Kinds
Michigan    Life & Annuities; Disability Minnesota    Life; Accident and Health
Mississippi    Accident & Health; Industrial Life, Industrial Accident and
Health; Life Missouri    Accident and Health; Life, Annuities and Endowments
Montana    Life; Disability Nebraska    Life Insurance; Sickness and Accident
Insurance Nevada    Life; Health New Hampshire    Accident & Health; Life New
Jersey    Life; Non-Participating Insurance Only

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New Mexico    Life and Health North Carolina    Life, including Industrial Sick
Benefit Insurance; Annuities (excluding variable annuities); Accident and
Health, including Hospitalization-Cancelable and Non-cancelable North Dakota   
Life & Annuity; Accident & Health Ohio    Life, Health & Annuities Oklahoma   
Accident & Health; Life Oregon    Life; Health Pennsylvania    Accident and
Health; Life and Annuities Rhode Island    Life; Accident & Health & Annuities
South Carolina    Life; Accident/Health South Dakota    Life; Health Tennessee
   Life; Accident and Health Disability Texas    Life; Accident and Health Utah
   Accident & Health-Life; Annuity-Life; Life; Variable Contract-Life Vermont   
Life and/or Health and Accident Virginia    Accident & Sickness; Life;
Industrial Life Washington    Life; Disability West Virginia    Life; Accident &
Sickness Wisconsin    Disability Insurance; Life Insurance and Annuities
(nonparticipating) Wyoming    Life and Disability Guam    Accident & Health;
Life

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SCHEDULE 5.19

INSURANCE LICENSES - UNITED AMERICAN INSURANCE COMPANY

 

Jurisdiction

  

Types of Insurance

Alabama    Life, Disability and Annuities Alaska    Life; Health; Annuities
Arizona    Disability; Life Arkansas    Accident & Health; Accident & Health -
Group; Accident & Health - Medicare Supplemental; Life; Life - Credit; Life -
Group California    Life and Disability Colorado    Accident & Health;
Annuities; General Life Connecticut    Accident and Health; Life,
Non-Participating Delaware    Life, including Annuities and Health District of
Columbia    Group Accident and Health; Group Annuities (Fixed and Variable);
Group Life, Individual Accident and Health; Individual Annuities (Fixed and
Variable); Individual Life; Life and Health Florida    Life; Accident and
Health; Group Life and Annuities Georgia    Life, Accident and Sickness Hawaii
   Accident and Health or Sickness; Life Idaho    Disability, Excluding Managed
Care; Life Illinois    Life, Accident and Health Indiana    Life & Annuities and
Accident & Health Iowa    Accident only (Individual); Accident and Health
(Individual); Hospital and Medical Expense (Individual); Group Accident and
Health; Non-cancellable Accident and Health; Life, includes Credit Life,
Variable Life, Annuities, Variable Annuities and Group Kansas    Life, Accident
and Health Kentucky    Life (includes Annuities) and Health Louisiana   
Annuities; Health and Accident; Life Maine    Life (including Credit Life);
Health (including Credit Health) Maryland    Health; Life, including Annuities
and Health (except Variable Life & Variable Annuities) Massachusetts    Life -
All Kinds; Accident - All Kinds; Health - All Kinds Michigan    Life &
Annuities; Disability Minnesota    Life; Accident and Health Mississippi   
Accident & Health; Life Missouri    Accident and Health; Life, Annuities and
Endowments Montana    Life; Disability Nebraska    Life Insurance; Sickness and
Accident Insurance Nevada    Life; Health New Hampshire    Accident & Health;
Life New Jersey    Life; Health; Annuities

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New Mexico    Life and Health North Carolina    Life insurance, including
industrial sick benefit insurance; Annuities (excluding Variable Annuities);
Accident and health insurance, including hospitalization, cancelable and
non-cancelable North Dakota    Life & Annuity; Accident & Health Ohio    Life,
Health & Annuities Oklahoma    Accident & Health; Life Oregon    Life; Health
Pennsylvania    Accident and Health; Life and Annuities Rhode Island    Life;
Accident & Health South Carolina    Life; Accident/Health South Dakota    Life;
Health Tennessee    Life; Accident and Health Disability Texas    Life; Accident
and Health Utah    Accident & Health-Life; Annuity-Life; Life; Variable
Contract-Life Vermont    Life and/or Health; Accident Virginia    Accident &
Sickness; Annuities; Life Washington    Life; Disability West Virginia    Life;
Accident & Sickness Wisconsin    Disability Insurance; Life Insurance and
Annuities (non-participating) Wyoming    Life and Disability Canada-Province of
Alberta    Accident and Sickness, Life Canada-Province of British Columbia   
Life Insurance and Accident and Sickness Insurance Canada-Province of Manitoba
   Life, Accident and Sickness Canada-Province of New Brunswick    Accident and
Sickness, Life Canada-Province of Nova Scotia    Life; Accident & Sickness
Canada-Province of Ontario    Life, Accident and Sickness Canada-Province of
Quebec    Life, Accident and Sickness Insurance Canada-Province of Saskatchewan
   Life

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SCHEDULE 10.02

NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION

Legal Service of Process

If to Torchmark Corporation:

CT Corporation

1209 Orange Street

Wilmington, Delaware 19801

If to TMK Re, Ltd.:

c/o Torchmark Corporation

Attn: General Counsel, Legal Department

3700 S. Stonebridge Drive

McKinney, Texas 75070

Notices Generally

If to Torchmark Corporation:

Torchmark Corporation

Attn: W. Michael Pressley

3700 S. Stonebridge Drive

McKinney, Texas 75070

If to TMK Re, Ltd.:

c/o Torchmark Corporation

Attn: W. Michael Pressley

3700 S. Stonebridge Drive

McKinney, Texas 75070