Exhibit 10.1

Execution Version

REVOLVING CREDIT AGREEMENT

dated as of August 3, 2007

among

WATSCO, INC.,

as Borrower,

THE LENDERS FROM TIME TO TIME PARTY HERETO,

BANK OF AMERICA, N.A.,

as Administrative Agent,

Swingline Lender and Issuing Bank,

J.P. MORGAN SECURITIES, INC.,

as Syndication Agent,

and

MIZUHO CORPORATE BANK (USA),

SUNTRUST BANK,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Co-Documentation Agents

 

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BANC OF AMERICA SECURITIES, LLC,

as Sole Lead Arranger and Sole Book Manager

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TABLE OF CONTENTS

 

          Page

ARTICLE I

   DEFINITIONS; CONSTRUCTION   

Section 1.1

  

Definitions

   1

Section 1.2

  

Classifications of Loans and Borrowings

   19

Section 1.3

  

Accounting Terms and Determination

   20

Section 1.4

  

Terms Generally

   20

ARTICLE II

   AMOUNT AND TERMS OF THE COMMITMENTS   

Section 2.1

  

General Description of Facilities

   20

Section 2.2

  

Revolving Loans

   21

Section 2.3

  

Procedure for Revolving Borrowings

   21

Section 2.4

  

Swingline Loans

   21

Section 2.5

  

Procedure for Swingline Borrowing; Etc.

   21

Section 2.6

  

Funding of Borrowings.

   22

Section 2.7

  

Interest Elections.

   23

Section 2.8

  

Optional Reduction and Termination of Commitments; Extension of Commitments;
Increase of

Aggregate Revolving Commitments; Additional Lenders

   24

Section 2.9

  

Repayment of Loans.

   25

Section 2.10

  

Evidence of Indebtedness.

   25

Section 2.11

  

Prepayments.

   26

Section 2.12

  

Interest on Loans.

   27

Section 2.13

  

Fees.

   27

Section 2.14

  

Computation of Interest and Fees

   28

Section 2.15

  

Inability to Determine Interest Rates

   28

Section 2.16

  

Illegality

   29

Section 2.17

  

Increased Costs.

   29

Section 2.18

  

Funding Indemnity

   30

Section 2.19

  

Taxes.

   30

Section 2.20

  

Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

   31

Section 2.21

  

Mitigation of Obligations; Replacement of Lenders.

   33

Section 2.22

  

Letters of Credit.

   33

Section 2.23

  

Extension of Scheduled Commitment Termination Date

   37

ARTICLE III

   CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT   

Section 3.1

  

Conditions To Effectiveness

   39

Section 3.2

  

Each Credit Event

   40

Section 3.3

  

Delivery of Documents

   41

ARTICLE IV

   REPRESENTATIONS AND WARRANTIES   

Section 4.1

  

Existence; Power

   41

Section 4.2

  

Organizational Power; Authorization

   41

Section 4.3

  

Governmental Approvals; No Conflicts

   41

Section 4.4

  

Financial Statements

   42

Section 4.5

  

Litigation and Environmental Matters.

   42

Section 4.6

  

Compliance with Laws and Agreements

   42

 

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Section 4.7

  

Investment Company Act, Etc

   42

Section 4.8

  

Taxes

   43

Section 4.9

  

Margin Regulations

   43

Section 4.10

  

ERISA

   43

Section 4.11

  

Ownership of Property.

   43

Section 4.12

  

Disclosure

   43

Section 4.13

  

Labor Relations

   43

Section 4.14

  

Binding Effect

   44

Section 4.15

  

No Default

   44

Section 4.16

  

Solvency

   44

Section 4.17

  

Senior Debt

   44

Section 4.18

  

Principal Places of Business and Subsidiaries

   44

Section 4.19

  

Insurance

   44

ARTICLE V

   AFFIRMATIVE COVENANTS   

Section 5.1

  

Financial Statements and Other Information

   44

Section 5.2

  

Notices of Material Events

   46

Section 5.3

  

Existence; Conduct of Business

   47

Section 5.4

  

Compliance with Laws, Etc

   47

Section 5.5

  

Payment of Obligations

   47

Section 5.6

  

Books and Records

   47

Section 5.7

  

Visitation, Inspection, Etc

   47

Section 5.8

  

Maintenance of Properties; Insurance

   47

Section 5.9

  

Use of Proceeds and Letters of Credit

   48

Section 5.10

  

Additional Subsidiaries

   48

Section 5.11

  

Environmental Laws

   48

Section 5.12

  

Gemaire Caribe

   48

ARTICLE VI

   FINANCIAL COVENANTS   

Section 6.1

  

Leverage Ratio

   49

Section 6.2

  

Interest Coverage Ratio

   49

ARTICLE VII

   NEGATIVE COVENANTS   

Section 7.1

  

Indebtedness

   49

Section 7.2

  

Negative Pledge

   50

Section 7.3

  

Fundamental Changes.

   51

Section 7.4

  

Investments, Loans, Capital Expenditures, Etc.

   51

Section 7.5

  

Restricted Payments

   53

Section 7.6

  

Sale of Assets

   53

Section 7.7

  

Transactions with Affiliates

   54

Section 7.8

  

Restrictive Agreements

   54

Section 7.9

  

Sale and Leaseback Transactions

   54

Section 7.10

  

Hedging Agreements

   54

Section 7.11

  

Amendment to Material Documents

   55

Section 7.12

  

Accounting Changes

   55

Section 7.13

  

[Reserved]

   55

 

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Section 7.14

  

Use of Proceeds

   55

Section 7.15

  

Prepayments

   55

Section 7.16

  

Amendments to Material Indebtedness Agreements

   55

ARTICLE VIII

   EVENTS OF DEFAULT   

Section 8.1

  

Events of Default

   55

ARTICLE IX

   THE ADMINISTRATIVE AGENT   

Section 9.1

  

Appointment and Authority

   58

Section 9.2

  

Delegation of Duties

   58

Section 9.3

  

Non-Reliance on Administrative Agent and Other Lenders

   58

Section 9.4

  

Exculpatory Provisions

   58

Section 9.5

  

Reliance by Administrative Agent

   59

Section 9.6

  

The Administrative Agent in its Individual Capacity

   59

Section 9.7

  

Resignation of Administrative Agent

   60

Section 9.8

  

No Other Duties, etc

   60

ARTICLE X

   MISCELLANEOUS   

Section 10.1

  

Notices; Electronic Communications

   60

Section 10.2

  

Waiver; Amendments.

   63

Section 10.3

  

Expenses; Indemnification.

   64

Section 10.4

  

Successors and Assigns.

   66

Section 10.5

  

Governing Law; Jurisdiction; Consent to Service of Process.

   69

Section 10.6

  

Waiver of Jury Trial

   70

Section 10.7

  

Right of Setoff

   70

Section 10.8

  

Counterparts; Effectiveness of Agreement; Integration

   70

Section 10.9

  

Survival

   70

Section 10.10

  

Severability

   71

Section 10.11

  

Confidentiality

   71

Section 10.12

  

Interest Rate Limitation

   71

Section 10.13

  

PATRIOT Act Notice

   72

Section 10.14

  

No Advisory or Fiduciary Responsibility

   72

 

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Schedules

 

Schedule I

   -    Pricing Grid

Schedule 2.22

   -    Existing Letters of Credit

Schedule 4.5 (a)

   -    Pending Litigation

Schedule 4.5 (b)

   -    Environmental Matters

Schedule 4.18

   -    Principal Places of Business and Subsidiaries

Schedule 7.1

   -    Outstanding Indebtedness

Schedule 7.2

   -    Existing Liens

Schedule 7.4

   -    Existing Investments

Schedule 7.8

   -    Restrictive Agreements

Annex I-D

   -    To the Subsidiary Guarantee Agreement

Annex I-E

   -    To the Indemnity, Subrogation and Contribution Agreement

Exhibits

 

Exhibit A

  -    Revolving Credit Note

Exhibit B

  -    Swingline Note

Exhibit C

  -    Form of Assignment and Assumption

Exhibit D

  -    Form of Subsidiary Guarantee Agreement

Exhibit E

  -    Form of Indemnity, Subrogation and Contribution Agreement

Exhibit 2.3

  -    Notice of Revolving Borrowing

Exhibit 2.5

  -    Notice of Swingline Borrowing

Exhibit 2.7

  -    Form of Continuation/Conversion

Exhibit 3.1(b) (iv)

  -    Form of Secretary’s Certificate

Exhibit 3.1(b) (vii)

  -    Form of Officer’s Certificate

Exhibit 5.1(c)

  -    Form of Covenant Compliance Certificate

 

-iv-

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REVOLVING CREDIT AGREEMENT

THIS REVOLVING CREDIT AGREEMENT (this “Agreement”) is made and entered into as
of August 3, 2007, by and among WATSCO, INC., a Florida corporation (the
“Borrower”), the several banks and other financial institutions from time to
time party hereto (the “Lenders”), and BANK OF AMERICA, N.A., a national banking
association, in its capacity as Administrative Agent for the Lenders (the
“Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders establish a $300,000,000
senior revolving credit facility with a $25,000,000 swingline and a $50,000,000
letter of credit sub-facility thereunder for the Borrower;

WHEREAS, subject to the terms and conditions of this Agreement, the Lenders
severally, to the extent of their respective Commitments, are willing to
establish the requested revolving credit facility for the Borrower.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the Borrower, the Lenders and the Administrative Agent agree as
follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

Section 1.1 Definitions. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified (to be
equally applicable to both the singular and plural forms of the terms defined):

“Act” shall mean the USA PATRIOT Act (Pub. L. No. 107-56, 115 Stat. 272 (2001)).

“Additional Commitment Lender” shall have the meaning assigned to such term in
Section 2.23.

“Additional Lender” shall have the meaning assigned to such term in Section 2.8.

“Additional Revolving Commitment Amount” shall have the meaning assigned to such
term in Section 2.8.

“Adjusted LIBO Rate” shall mean, with respect to each Interest Period for a
Eurodollar Borrowing, the rate per annum obtained by dividing (a) LIBOR for such
Interest Period by (b) a percentage equal to 1.00 minus the Eurodollar Reserve
Percentage.

“Administrative Agent” shall have the meaning assigned to such term in the
opening paragraph hereof.

“Administrative Agent’s Office” shall mean the Administrative Agent’s address
and, as appropriate, account as set forth in Section 10.1, or such other address
or account as the Administrative Agent may from time to time notify to the
Borrower and the Lenders.

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“Administrative Questionnaire” shall mean, with respect to each Lender, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent duly completed by such Lender.

“Affiliate” shall mean, as to any Person, any other Person that directly, or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, such Person.

“Aggregate Revolving Commitments” shall mean the sum of the Revolving
Commitments of all Lenders at any time outstanding. On the Closing Date, the
Aggregate Revolving Commitments (including the Swingline Commitment) equal
$300,000,000.

“Applicable Lending Office” shall mean, for each Lender and for each Type of
Loan, the “Lending Office” of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan in the Administrative Questionnaire submitted
by such Lender or such other office of such Lender (or an Affiliate of such
Lender) as such Lender may from time to time specify to the Administrative Agent
and the Borrower as the office by which its Loans of such Type are to be made
and maintained.

“Applicable Margin” shall mean, as of any date, with respect to all Eurodollar
Borrowings and Base Rate Borrowings outstanding on such date, the percentage per
annum designated in the “Pricing Grid” attached hereto as Schedule I as
applicable to Eurodollar Borrowings or Base Rate Borrowings, as the case may be,
based on the Borrower’s Leverage Ratio. The Applicable Margin for Eurodollar
Borrowings shall initially be 0.5000% and the Applicable Margin for Base Rate
Borrowings shall initially be 0.000%; provided, however, that upon delivery to
the Administrative Agent of the financial statements required by Section 5.1(a)
or (b) and the Compliance Certificate required by Section 5.1(c) for the fiscal
quarter ended September 30, 2007 and for each fiscal quarter thereafter, the
Applicable Margin shall be reset to the percentage designated in Schedule I
based on the Borrower’s Leverage Ratio for the preceding four fiscal quarter
period then ending, measured quarterly, such Applicable Margin being effective
as of the second Business Day following the date that the Administrative Agent
receives such financial statements and certificate; provided further, however,
that if at any time the Borrower shall have failed timely to deliver such
financial statements and Compliance Certificate, the Applicable Margin for
Eurodollar Borrowings shall be 1.125% and the Applicable Margin for Base Rate
Borrowings shall be 0.125% until such time as such financial statements and
Compliance Certificate are delivered, at which time the Applicable Margin shall
be determined as provided above.

“Applicable Percentage” shall mean, as of any date, with respect to the
commitment fee, the percentage per annum designated in the “Pricing Grid”
attached hereto as Schedule I based on the Borrower’s Leverage Ratio. The
Applicable Percentage shall initially be 0.1000%; provided, however, that upon
delivery to the Administrative Agent of the financial statements required by
Section 5.1(a) or (b) and the Compliance Certificate required by Section 5.1(c)
for the fiscal quarter September 30, 2007 and for each fiscal quarter
thereafter, the Applicable Percentage shall be reset to the percentage
designated in Schedule I based on the Borrower’s Leverage Ratio for the
preceding four fiscal quarter period then ending, measured quarterly, such
Applicable Percentage being effective as of the second Business Day following
the date that the Administrative Agent receives such financial statements and
certificate; provided further, however, that if at any time the Borrower shall
have failed timely to deliver such financial statements and Compliance
Certificate, the Applicable Percentage shall be 0.2000% until such time as such
financial statements and Compliance Certificate are delivered, at which time the
Applicable Percentage shall be determined as provided above.

 

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“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” shall mean an Assignment and Assumption entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4(b)) and accepted by the Administrative Agent, in the
form of Exhibit C attached hereto or any other form approved by the
Administrative Agent.

“Availability Period” shall mean (a) in case of Revolving Borrowings, the period
from the Closing Date to the Commitment Termination Date, and (b) in case of
Swingline Borrowings, the period from the Closing Date to the Swingline
Termination Date.

“Base Rate” shall mean the higher of (a) the per annum rate which the
Administrative Agent publicly announces from time to time to be its prime
lending rate, as in effect from time to time, and (b) the Federal Funds Rate, as
in effect from time to time, plus one-half of one percent (0.50%). The
Administrative Agent’s prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers. The
Administrative Agent may make commercial loans or other loans at rates of
interest at, above or below the Administrative Agent’s prime lending rate. Each
change in the Administrative Agent’s prime lending rate shall be effective from
and including the date such change is publicly announced as being effective.

“Borrower” shall have the meaning assigned to such term in the introductory
paragraph hereof.

“Borrowing” shall mean a borrowing consisting of (a) Loans of the same Class and
Type, made, converted or continued on the same date and, in case of Eurodollar
Loans, as to which a single Interest Period is in effect, or (b) a Swingline
Loan.

“Business Day” shall mean (a) any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the laws of, or are in
fact closed in, the state where the Administrative Agent’s Office is located and
(b) if such day relates to a Borrowing of, a payment or prepayment of principal
or interest on, a conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice with respect to any of the foregoing, any day on which dealings
in Dollars are carried on in the London interbank market.

“Capital Expenditures” shall mean for any period, without duplication, (a) the
additions to property, plant and equipment and other capital expenditures of the
Borrower and its Subsidiaries that are (or would be) set forth on a consolidated
statement of cash flows of the Borrower and its Subsidiaries for such period
prepared in accordance with GAAP and (b) Capital Lease Obligations incurred by
the Borrower and its Subsidiaries during such period.

“Capital Lease Obligations” of any Person shall mean all obligations of such
Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.

“Capital Stock” shall mean (a) in the case of a corporation, capital stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests and

 

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(e) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.

“Change in Control” shall mean, at any time:

(a) With respect to the Borrower,

(i) any “person” or “group” (each as used in Sections 13(d)(3) and 14(d)(2) of
the Securities Exchange Act of 1934) other than Albert Nahmad, Alna Capital
Associates or a trust or other entity controlled by either of them or one of
their Affiliates (each an “Existing Control Group”) either (A) becomes the
“beneficial owner” (as defined in Rule 13d-3 of the Securities Exchange Act of
1934), directly or indirectly, of Voting Stock of the Borrower (or securities
convertible into or exchangeable for such Voting Stock) representing forty
percent (40%) or more of the combined voting power of all Voting Stock of the
Borrower (on a fully diluted basis) or (B) otherwise has the ability, directly
or indirectly, to elect a majority of the board of directors of the Borrower
(provided, that if an event described in this clause (i) shall occur solely by
reason of the death of one or more members of the Existing Control Group, then a
“Change of Control” shall not be deemed to have occurred so long as the Voting
Stock of the decedent is owned of record by the estate or immediate family of
such decedent);

(ii) during any period of up to twenty-four (24) consecutive months, commencing
on the Closing Date, individuals who at the beginning of such twenty-four
(24)-month period were directors of the Borrower shall cease for any reason
(other than the death, disability or retirement of a director or of an officer
of the Borrower that is serving as a director at such time so long as another
officer of the Borrower replaces such Person as a director) to constitute a
majority of the board of directors of the Borrower; or

(iii) any Person or two or more Persons acting in concert other than the
Existing Control Group shall have acquired by contract or otherwise, or shall
have consummated a contract or arrangement that results in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence on the management or policies of the Borrower; or

(b) with respect to any Major Subsidiary,

(i) the Borrower shall cease to own, directly or indirectly, at least 100% of
the Voting Stock of each currently existing Major Subsidiary or any other
Subsidiary that is or becomes a Major Subsidiary after the date hereof; or

(ii) any Person or two or more Persons acting in concert other than the Borrower
shall have acquired by contract or otherwise, or shall have consummated a
contract or arrangement that results in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence on the management or
policies of such Major Subsidiary.

“Change in Law” shall mean (a) the adoption of any applicable law, rule or
regulation after the date of this Agreement, (b) any change in any applicable
law, rule or regulation, or any change in the interpretation or application
thereof, by any Governmental Authority after the date of this Agreement, or
(c) compliance by any Lender (or its Applicable Lending Office) or the Issuing
Bank (or for purposes of Section 2.17(b), by such Lender’s or the Issuing Bank’s
holding company, if applicable) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.

 

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“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans and when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment or a Swingline Commitment.

“Closing Date” shall mean the date on which the conditions precedent set forth
in Section 3.1 and Section 3.2 have been satisfied or waived in accordance with
Section 10.2.

“Code” shall mean the Internal Revenue Code of 1986, as amended and in effect
from time to time.

“Commitment” shall mean a Revolving Commitment or a Swingline Commitment or any
combination thereof (as the context shall permit or require).

“Commitment Termination Date” shall mean the earliest of (a) the Scheduled
Commitment Termination Date (as the same may be extended by Section 2.23),
(b) the date on which the Revolving Commitments are terminated pursuant to
Section 2.8 or (c) the date on which all amounts outstanding under this
Agreement have been declared or have automatically become due and payable
(whether by acceleration or otherwise); provided, however, that with respect to
any Non-Extending Lender, the Commitment Termination Date of such Non-Extending
Lender’s Commitment shall be the Existing Scheduled Commitment Termination Date
notwithstanding the extension of Commitments by any other Lender pursuant to
Section 2.23.

“Compliance Certificate” shall have the meaning assigned to such term in
Section 5.1(c).

“Consolidated EBIT” shall mean, for the Borrower and its Subsidiaries for any
period ending on the date of computation thereof, an amount equal to the sum of
(a) Consolidated Net Income for such period plus (b) to the extent deducted in
determining Consolidated Net Income for such period, (i) Consolidated Interest
Expense, (ii) income tax expense and (iii) plus losses (or minus gains) related
to discontinued operations of Dunhill; provided, however, that with respect to
an acquisition that is accounted for as a “purchase”, for the period of four
full consecutive fiscal quarters of the Borrower ending next following the date
of such acquisition, “Consolidated EBIT” shall include the results of operations
of the Person or assets so acquired, which amounts shall be determined on a
historical pro forma basis as if such acquisition had been consummated as a
“pooling of interests”.

“Consolidated EBITDA” shall mean, for the Borrower and its Subsidiaries for any
period ending on the date of computation thereof, an amount equal to the sum of
(a) Consolidated Net Income for such period plus (b) to the extent deducted in
determining Consolidated Net Income for such period, (i) Consolidated Interest
Expense, (ii) income tax expense, (iii) depreciation and amortization (including
non-cash, stock based compensation) and (iv) plus losses (or minus gains)
related to discontinued operations of Dunhill; provided, however, that with
respect to an acquisition that is accounted for as a “purchase”, for the period
of four full consecutive fiscal quarters of the Borrower ending next following
the date of such acquisition, “Consolidated EBITDA” shall include the results of
operations of the Person or assets so acquired, which amounts shall be
determined on a historical pro forma basis as if such acquisition had been
consummated as a “pooling of interests”.

 

5

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“Consolidated Interest Expense” shall mean, for the Borrower and its
Subsidiaries for any period ending on the date of computation thereof,
determined on a consolidated basis in accordance with GAAP, the sum of (a) total
cash interest expense, including without limitation, the interest component of
any payments in respect of Capital Lease Obligations during such period (whether
or not actually paid during such period) plus (b) the net amount payable (or
minus the net amount receivable) under Hedging Agreements during such period
(whether or not actually paid or received during such period).

“Consolidated Net Income” shall mean, for any period, the net income (or loss)
of the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, but excluding therefrom (to the
extent otherwise included therein) (a) any extraordinary gains or losses,
(b) any gains attributable to write-ups of assets, (c) any equity interest of
the Borrower or any Subsidiary in the unremitted earnings of any Person that is
not a Subsidiary and (d) any income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with the Borrower
or any Subsidiary on the date that such Person’s assets are acquired by the
Borrower or any Subsidiary.

“Consolidated Tangible Assets” shall mean, on any date of computation,
Consolidated Total Assets minus intangible assets of the Borrower and its
Subsidiaries on that date.

“Consolidated Total Assets” shall mean, for the Borrower and its Subsidiaries
for any period ending on the date of computation thereof, determined on a
consolidated basis in accordance with GAAP, the aggregate book value of the
assets of the Borrower and its Subsidiaries for such period.

“Consolidated Total Debt” shall mean, as of any date of determination, without
duplication, all Indebtedness of the Borrower and its Subsidiaries (other than
as described in subsection (k) under the definition of “Indebtedness” herein),
determined on a consolidated basis in accordance with GAAP, including, but not
limited to, all of the Obligations. For purposes of determining “Consolidated
Total Debt,” the principal amount of any Synthetic Lease Obligation shall be
deemed to be the amount that would be reflected on the balance sheet of the
Borrower and its Subsidiaries if such Synthetic Lease Obligation were
characterized as a capital lease rather than an operating lease.

“Consolidated Total Revenues” shall mean, for the Borrower and its Subsidiaries
for any period ending on the date of computation thereof, determined on a
consolidated basis in accordance with GAAP, the total revenues of the Borrower
and its Subsidiaries for such period.

“Contractual Obligation” shall mean, 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” shall mean the power, directly or indirectly, either to (a) vote five
percent (5%) or more of securities having ordinary voting power for the election
of directors (or persons performing similar functions) of a Person or (b) direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms “Controlling”, “Controlled by”, and “under common Control with” have
meanings correlative thereto.

“Default” shall mean any condition or event that, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

“Default Interest” shall have the meaning assigned to such term in
Section 2.12(c).

 

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“Dollar(s)” and the sign “$” shall mean lawful money of the United States of
America.

“Dunhill” shall mean Dunhill Staffing Systems, Inc., a Delaware corporation and
Dunhill Temporary Systems, Inc., a New York corporation.

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.4(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 10.4(b)(iii)).

“Environmental Laws” shall mean all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by or with any Governmental Authority, relating in
any way to the environment, preservation or reclamation of natural resources,
the management, Release or threatened Release of any Hazardous Material or to
health and safety matters.

“Environmental Liability” shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any actual or alleged violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) any actual or
alleged exposure to any Hazardous Materials, (d) the Release or threatened
Release of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.

“ERISA Affiliate” shall mean any trade or business (whether or not
incorporated), which, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator appointed by the PBGC of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan;
(f) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.

 

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“Eurodollar” when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bears interest at a rate
determined by reference to the Adjusted LIBO Rate.

“Eurodollar Reserve Percentage” shall mean the aggregate of the maximum reserve
percentages (including, without limitation, any emergency, supplemental, special
or other marginal reserves) expressed as a decimal (rounded upwards to the next
1/100th of 1%) in effect on any day to which the Administrative Agent is subject
with respect to the Adjusted LIBO Rate pursuant to regulations issued by the
Board of Governors of the Federal Reserve System (or any Governmental Authority
succeeding to any of its principal functions) with respect to eurocurrency
funding (currently referred to as “eurocurrency liabilities” under Regulation
D). Eurodollar Loans shall be deemed to constitute eurocurrency funding and to
be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under Regulation D. The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

“Event of Default” shall have the meaning assigned to such term in Article VIII.

“Excluded Taxes” shall mean with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located, and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.21(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender’s failure to comply with Section 2.19(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.19(a).

“Existing Letter of Credit” shall mean each outstanding letter of credit issued
prior to the date hereof for the account of the Borrower as set forth on
Schedule 2.22 and continued after the date hereof pursuant to Section 2.22. Each
“Existing Letter of Credit” shall be a “Letter of Credit” for purposes of this
Agreement and deemed to have been issued hereunder.

“Existing Scheduled Commitment Termination Date” shall have the meaning assigned
to such term in Section 2.23.

“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published by the
Federal Reserve Bank of New York on the next succeeding Business Day or if such
rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average rounded upwards, if necessary, to the next 1/100th of
1% of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent.

 

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

“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 activities.

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.3.

“Gemaire Caribe” shall mean Gemaire Caribe, Inc., a Puerto Rico corporation.

“Governmental Authority” shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

“Guarantee” of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly and
including any obligation, direct or indirect, of the guarantor (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness of other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued in support of such Indebtedness or
obligation; provided, that the term “Guarantee” shall not include endorsements
for collection of deposits in the ordinary course of business. The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which Guarantee is made or, if
not so stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith. The term “Guarantee” used as a verb has
a corresponding meaning.

“Hazardous Materials” shall mean 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.

“Hedging Agreements” shall mean interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts, foreign exchange agreements, commodity agreements
and other similar agreements or arrangements designed to protect against
fluctuations in interest rates, currency values or commodity values.

“Indebtedness” of any Person shall mean, without duplication (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person in respect of the deferred purchase price of property or services
(other than trade payables incurred in the ordinary course of

 

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business), (d) all obligations of such Person under any conditional sale or
other title retention agreement(s) relating to property acquired by such Person,
(e) all Capital Lease Obligations of such Person, (f) all obligations,
contingent or otherwise, of such Person in respect of letters of credit,
acceptances or similar extensions of credit, (g) all Guarantees of such Person
of the type of Indebtedness described in clauses (a) through (f) above, (h) all
Indebtedness of a third party secured by any Lien on property owned by such
Person, whether or not such Indebtedness has been assumed by such Person,
(i) all obligations of such Person, contingent or otherwise, to purchase,
redeem, retire or otherwise acquire for value any common stock of such Person,
(j) Off-Balance Sheet Liabilities, (k) obligations under any Hedging Agreements,
and (l) all Securitization Transactions of such Person. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

“Indemnity and Contribution Agreement” shall mean the Indemnity, Subrogation and
Contribution Agreement, substantially in the form of Exhibit E, among the
Borrower, the Subsidiary Loan Parties and the Administrative Agent.

“Interest Coverage Ratio” shall mean as of any date of determination with
respect to the Borrower, the ratio of (a) Consolidated EBIT as of such date to
(b) Consolidated Interest Expense as of such date.

“Interest Period” shall mean (a) with respect to any Eurodollar Borrowing, a
period of one, two, three or six months, selected by the Borrower pursuant to
Section 2.3 and subject to customary adjustments in duration; and (b) with
respect to a Swingline Loan, a period of such duration not to exceed 5 days, as
the Borrower may request and the Swingline Lender may agree in accordance with
Section 2.5; provided, that:

(i) the initial Interest Period for such Borrowing shall commence on the date of
such Borrowing (including the date of any conversion from a Borrowing of another
Type) and each Interest Period occurring thereafter in respect of such Borrowing
shall commence on the day on which the next preceding Interest Period expires;

(ii) if any Interest Period would otherwise end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day,
unless, in the case of a Eurodollar Borrowing, such Business Day falls in
another calendar month, in which case such Interest Period would end on the next
preceding Business Day;

(iii) any Interest Period in respect of a Eurodollar Borrowing which 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 such calendar month; and

(iv) no Interest Period may extend beyond the Commitment Termination Date or the
Swingline Termination Date, as the case may be.

 

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“Investment” shall have the meaning assigned to such term in Section 7.4.

“Issuing Bank” shall mean Bank of America, N.A. or any other Lender, each in its
capacity as an issuer of Letters of Credit pursuant to Section 2.22.

“LC Commitment” shall mean that portion of the Aggregate Revolving Commitments
that may be used by the Borrower for the issuance of Letters of Credit in an
aggregate face amount not to exceed $50,000,000.

“LC Disbursement” shall mean a payment made by the Issuing Bank pursuant to a
Letter of Credit.

“LC Documents” shall mean the Letters of Credit and all applications, agreements
and instruments relating to the Letters of Credit.

“LC Exposure” shall mean, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (b) the aggregate
amount of all LC Disbursements that have not been reimbursed by or on behalf of
the Borrower at such time. The LC Exposure of any Lender shall be its Pro Rata
Share of the total LC Exposure at such time.

“Lenders” shall have the meaning assigned to such term in the opening paragraph
of this Agreement and shall include, where appropriate, the Swingline Lender.

“Letter of Credit” shall mean each Existing Letter of Credit and any other
letter of credit hereafter issued pursuant to Section 2.22 by the Issuing Bank
for the account of the Borrower or any Subsidiary Loan Party pursuant to the LC
Commitment.

“Leverage Ratio” shall mean as of any date of determination with respect to the
Borrower, the ratio of (a) Consolidated Total Debt as of such date to
(b) Consolidated EBITDA as of such date.

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

“Lien” shall mean any mortgage, pledge, security interest, lien (statutory or
otherwise), charge, encumbrance, hypothecation, assignment, deposit arrangement,
or other arrangement having the practical effect of the foregoing or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any capital lease having the same economic effect as any
of the foregoing).

 

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“Loan Documents” shall mean, collectively, this Agreement, the Notes (if any),
the LC Documents, all Notices of Borrowing, the Subsidiary Guarantee Agreement,
the Indemnity and Contribution Agreement, and any and all other instruments,
agreements, documents and writings executed in connection with any of the
foregoing.

“Loan Parties” shall mean the Borrower and the Subsidiary Loan Parties.

“Loans” shall mean all Revolving Loans and Swingline Loans in the aggregate or
any of them, as the context shall require.

“Major Subsidiary” shall mean, collectively, (a) Baker Distributing Company LLC,
Gemaire Distributors LLC, East Coast Distributors LLC and Heating & Cooling
Supply LLC, and (b) any other direct or indirect Subsidiary of the Borrower
having at any time: (i) assets in an amount equal to at least 10% of the
Consolidated Total Assets of the Borrower and its Subsidiaries determined as of
the last day of the most recent fiscal quarter of the Borrower as reflected in
the Borrower’s most recent financial statements required by Section 5.1(a) or
(b); or (ii) revenues or net income in an amount equal to at least 10% of the
Consolidated Total Revenues or Consolidated Net Income of the Borrower and its
Subsidiaries for the 12-month period ending on the last day of the most recent
fiscal quarter of the Borrower as reflected in the Borrower’s most recent
financial statements required by Section 5.1(a) or (b).

“Material Adverse Effect” shall mean, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences whether or not related, a material
adverse change in, or a material adverse effect on, (a) the business, results of
operations, financial condition, assets, liabilities or prospects of the
Borrower and of the Borrower and its Subsidiaries taken as a whole, (b) the
ability of the Loan Parties to perform any of their respective obligations under
the Loan Documents, (c) the rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders under any of the Loan Documents or (d) the
legality, validity or enforceability of any of the Loan Documents.

“Material Agreement” shall mean any agreement filed pursuant to Item 601(b)(10)
of Regulation S-K (17 C.F.R. 229, et seq.) with the Borrower’s most recent
Annual Report on Form 10-K.

“Material Indebtedness” shall mean Indebtedness (other than the Loans and
Letters of Credit) or obligations in respect of one or more Hedging Agreements,
to a single Person and such Person’s Affiliates of an aggregate principal amount
exceeding $10,000,000. For purposes of determining “Material Indebtedness,” the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect to any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Borrower or such
Subsidiary would be required to pay if such Hedging Agreement were terminated at
such time.

“Material Indebtedness Agreements” shall mean each of the Prudential Shelf
Agreement, any agreement or instrument evidencing Private Placement Debt, any
agreement relating to a Securitization Transaction, or any other agreement
relating to Material Indebtedness of the Borrower or any Subsidiary Loan Party.

“Modification Date” shall have the meaning assigned to such term in
Section 2.23.

“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor.

 

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“Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of
ERISA.

“Non-Extending Lender” shall have the meaning assigned to such term in
Section 2.23.

“Notes” shall mean, collectively, the Revolving Credit Notes and the Swingline
Note.

“Notices of Borrowing” shall mean, collectively, the Notices of Revolving
Borrowing and the Notices of Swingline Borrowing.

“Notice of Conversion/Continuation” shall mean the notice given by the Borrower
to the Administrative Agent in respect of the conversion or continuation of an
outstanding Borrowing as provided in Section 2.7(b) hereof.

“Notice of Revolving Borrowing” shall have the meaning assigned to such term in
Section 2.3.

“Notice of Swingline Borrowing” shall have the meaning assigned to such term in
Section 2.5.

“Obligations” shall mean (a) all amounts owing by the Borrower or any Subsidiary
to the Administrative Agent, the Issuing Bank or any Lender (including the
Swingline Lender) pursuant to or in connection with this Agreement or any other
Loan Document, including without limitation, all principal, interest (including
any interest accruing after the filing of any petition in bankruptcy or the
commencement of any insolvency, reorganization or like proceeding relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), all reimbursement obligations, fees, expenses,
indemnification and reimbursement payments, costs and expenses (including all
fees and expenses of counsel to the Administrative Agent and any Lender
(including the Swingline Lender) incurred pursuant to this Agreement or any
other Loan Document), whether direct or indirect, absolute or contingent,
liquidated or unliquidated, now existing or hereafter arising hereunder or
thereunder, together with all renewals, extensions, modifications or
refinancings thereof, and (b) all obligations of the Borrower or any Subsidiary,
monetary or otherwise, under each interest rate Hedging Agreement relating to
Obligations referred to in the preceding clause (a) entered into with any
counterparty that was a Lender (or an Affiliate thereof) at the time such
Hedging Agreement was entered into.

“OFAC” shall mean the U.S. Department of Treasury’s Office of Foreign Assets
Control.

“Off-Balance Sheet Liabilities” of any Person shall mean (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any liability of such Person under any sale
and leaseback transactions which do not create a liability on the balance sheet
of such Person, (c) any Synthetic Lease Obligation or (d) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheet of such Person.

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.

“Participant” shall have the meaning set forth in Section 10.4(c).

 

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“Payment Office” shall mean the office of the Administrative Agent located at
101 North Tryon Street, NC1-001-04-39, Charlotte, North Carolina 28255, or such
other location as to which the Administrative Agent shall have given written
notice to the Borrower and the other Lenders.

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.

“Permitted Encumbrances” shall mean:

(a) Liens imposed by law for taxes, governmental assessments or similar
governmental charges not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;

(b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law created in the ordinary course of
business for amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP;

(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

(e) judgment and attachment liens not giving rise to an Event of Default or
Liens created by or existing from any litigation or legal proceeding that are
currently being contested in good faith by appropriate proceedings and with
respect to which adequate reserves are being maintained in accordance with GAAP;

(f) easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or materially interfere with the ordinary conduct
of business of the Borrower and its Subsidiaries taken as a whole; and

(g) bank liens with respect to collection of deposits in the ordinary course of
business;

provided, that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

“Permitted Investments” shall mean:

(a) 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), in each case maturing within one (1) year from the date of
acquisition thereof;

 

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(b) commercial paper having the highest rating, at the time of acquisition
thereof, of Standard & Poor’s or Moody’s and in either case maturing within six
(6) months from the date of acquisition thereof;

(c) certificates of deposit, bankers’ acceptances and time deposits maturing
within one-hundred eighty (180) days of the date of acquisition thereof issued
or guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States or any state thereof which has a combined capital and
surplus and undivided profits of not less than $500,000,000;

(d) fully collateralized repurchase agreements with a term of not more than
thirty (30) days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause
(c) above;

(e) mutual funds investing solely in any one or more of the Permitted
Investments described in clauses (a) through (d) above;

(f) debt securities with a maturity of no greater than 365 days and rated at
least “A-” by Standard & Poor’s or at least “A3” by Moody’s; and

(g) subject to the restriction set forth in Section 4.9, other debt or equity
securities which are listed on a national securities exchange or freely traded
in the over-the-counter market so long as the cost of such securities does not
exceed at any time in the aggregate an amount equal to 2% of Consolidated
Tangible Assets as of the most recent fiscal year end.

“Person” shall mean any individual, partnership, firm, corporation, association,
joint venture, limited liability company, trust or other entity, or any
Governmental Authority.

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Private Placement Debt” shall mean unsecured Indebtedness for borrowed money
issued by the Borrower in a private placement transaction; provided, that all of
the following conditions shall be satisfied:

(a) except as set forth on Schedule II hereof, no portion of principal thereof
shall be payable or required to be purchased (whether by scheduled installment,
mandatory prepayment or redemption, or the exercise of any put right) prior to
the Scheduled Commitment Termination Date;

(b) the instruments and agreements evidencing such Indebtedness, and any
agreement under which such Indebtedness, and any agreement under which such
Indebtedness is created, shall provide that the right to payment of the holders
or owners of Private Placement Debt (including any trustee or agent action on
behalf of such holders or owners, collectively “Private Placement Debt Holders”)
shall either be subordinate to or rank pari passu in all respects with the
rights of the Lenders and the Administrative Agent to payment and performance of
the Obligations on terms reasonably acceptable to the Administrative Agent;

 

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(c) both immediately prior to and immediately after giving effect to the
issuance of such Indebtedness, there shall not have occurred and be continuing
any Default or Event of Default;

(d) the Borrower shall furnish to the Administrative Agent, not later than the
earliest date of delivery thereof to any actual or prospective Private Placement
Debt Holder, copies of (i) all preliminary placement memoranda and final
placement memoranda relating to such Indebtedness and (ii) drafts of all
documents and agreements under which such Indebtedness is to be created or
governed; and

(e) not later than ten (10) days prior to the issuance of such Indebtedness, the
Borrower shall deliver to the Administrative Agent a certificate in the form of
Exhibit 5.1(c), executed by a Responsible Officer and containing calculations
giving historical pro forma effect to the issuance of such Indebtedness as of
and for the four consecutive fiscal quarter period ending at the end of most
recent fiscal quarter of the Borrower preceding the date of such issuance
(assuming for such purpose that the initial rate or rates of interest provided
for therein (and giving effect to any increase in rates of interest therein
provided) remained in effect for such four fiscal quarter period), which
certificate shall demonstrate that the issuance of such Indebtedness does not
cause, create or result in a Default or Event of Default on a historical pro
forma basis.

“Pro Rata Share” shall mean, with respect to any Lender at any time, a
percentage, the numerator of which shall be such Lender’s Revolving Commitment
and the denominator of which shall be the sum of all Lenders’ Revolving
Commitments; or if the Revolving Commitments have been terminated or expired or
if the Loans have been declared to be due and payable, a percentage, the
numerator of which shall be the sum of such Lender’s Revolving Credit Exposure
and the denominator of which shall be the sum of the aggregate Revolving Credit
Exposure of all Lenders.

“Prudential Shelf Agreement” that certain Second Amended and Restated Private
Shelf Agreement dated December 10, 2004 between The Prudential Insurance Company
of America, Inc, the Borrower and the purchasers named therein.

“Receivables” shall mean accounts receivable (including, without limitation, all
rights to payment created or arising from the sales of goods, leases of goods or
the rendition of services, no matter how evidenced and whether or not earned by
performance).

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be in effect from time to time, and any
successor regulations.

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

“Release” shall mean any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration into the
environment (including ambient air, surface water, groundwater, land surface or
subsurface strata) or within any building, structure, facility or fixture.

“Required Lenders” shall mean, at any time, Lenders holding fifty-one percent
(51%) or more of the aggregate outstanding Revolving Credit Exposures at such
time or if the Lenders have no Revolving Credit Exposure outstanding, then
Lenders holding fifty-one percent (51%) or more of the Aggregate Revolving
Commitments.

 

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“Responsible Officer” shall mean any of the president, the chief executive
officer, the chief operating officer, the chief financial officer, the treasurer
or a vice president of the Borrower or such other representative of the Borrower
(or, with respect to any request for the issuance of a Letter of Credit for the
account of a Subsidiary, such officer of the applicable Subsidiary), as may be
designated in writing by any one of the foregoing with the consent of the
Administrative Agent; and, with respect to the financial covenants only, the
chief financial officer or the treasurer of the Borrower.

“Restricted Payment” shall have the meaning assigned to such term in
Section 7.5.

“Revolving Commitment” shall mean, with respect to each Lender, the obligation
of such Lender to make Revolving Loans to the Borrower and to participate in
Letters of Credit and Swingline Loans in an aggregate principal amount not
exceeding the amount set forth with respect to such Lender on the signature
pages to this Agreement, or in the case of a Person becoming a Lender after the
Closing Date, the amount of the assigned “Revolving Commitment” as provided in
the Assignment and Assumption Agreement executed by such Person as an assignee,
as the same may be changed pursuant to terms hereof.

“Revolving Credit Exposure” shall mean, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender’s Revolving Loans,
such Lender’s LC Exposure and such Lender’s Swingline Exposure.

“Revolving Credit Note” shall mean a promissory note of the Borrower payable to
the order of a requesting Lender in the principal amount of such Lender’s
Revolving Commitment, in substantially the form of Exhibit A.

“Revolving Loan” shall mean a loan made by a Lender (other than the Swingline
Lender) to the Borrower under its Revolving Commitment, which may either be a
Base Rate Loan or a Eurodollar Loan.

“Scheduled Commitment Termination Date” shall mean August 3, 2012.

“Securitization Transaction” shall mean (a) any transfer by the Borrower or any
Subsidiary of Receivables or interests therein and all collateral securing such
Receivables, all contracts and contract rights and all guarantees or other
obligations in respect of such Receivables, all other assets that are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving such Receivables and all proceeds of any of the foregoing (i) to a
trust, partnership, corporation or other entity (other than the Borrower or a
Subsidiary other than a SPE Subsidiary), which transfer is funded in whole or in
part, directly or indirectly, by the incurrence or issuance by the transferee or
any successor transferee of indebtedness or other securities that are to receive
payments from, or that represent interests in, the cash flow derived from such
Receivables or interests in Receivables, or (ii) directly to one or more
investors or other purchasers (other than the Borrower or any Subsidiary), or
(b) any transaction in which the Borrower or a Subsidiary incurs Indebtedness or
other obligations secured by Liens on Receivables. The “amount” or “principal
amount” of any Securitization Transaction shall be deemed at any time to be
(x) in the case of a transaction described in clause (a) of the preceding
sentence, the aggregate principal or stated amount of the Indebtedness or other
securities referred to in such clause or, if there shall be no such principal or
stated amount, the uncollected amount of the Receivables transferred pursuant to
such Securitization Transaction net of any such Receivables that have been
written off as

 

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uncollectible, and (y) in the case of a transaction described in clause (b) of
the preceding sentence, the aggregate outstanding principal amount of the
Indebtedness secured by Liens on the subject Receivables.

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

“SPE Subsidiary” shall mean any Subsidiary formed solely for the purpose of, and
that engages only in, one or more Securitization Transactions.

“Standard & Poor’s” shall mean Standard & Poor’s, a division of the McGraw-Hill
Companies.

“Subsidiary” shall mean, with respect to any Person (the “parent”), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, partnership, joint venture, limited liability company,
association or other entity (a) of which securities or other ownership interests
representing more than fifty percent (50%) of the equity or more than fifty
percent (50%) of the ordinary voting power, or in the case of a partnership,
more than fifty percent (50%) of the general partnership interests are, as of
such date, owned, Controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless otherwise indicated,
all references to “Subsidiary” hereunder shall mean a Subsidiary of the
Borrower.

“Subsidiary Guarantee Agreement” shall mean the Subsidiary Guarantee Agreement,
substantially in the form of Exhibit D, made by the Subsidiary Loan Parties in
favor of the Administrative Agent for the benefit of the Lenders.

“Subsidiary Loan Party” shall mean any direct or indirect Subsidiary (other than
Gemaire Caribe, unless it becomes a Subsidiary Loan Party pursuant to
Section 5.12).

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding not to
exceed $25,000,000.

“Swingline Exposure” shall mean, with respect to each Lender, the principal
amount of the Swingline Loans in which such Lender is legally obligated either
to make a Base Rate Loan or to purchase a participation in accordance with
Section 2.5, which shall equal such Lender’s Pro Rata Share of all outstanding
Swingline Loans.

 

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“Swingline Lender” shall mean Bank of America, N.A., or any other Lender that
may agree to make Swingline Loans hereunder.

“Swingline Loan” shall mean a loan made to the Borrower by the Swingline Lender
under the Swingline Commitment.

“Swingline Note” shall mean the promissory note of the Borrower payable to the
order of the Swingline Lender in the principal amount of the Swingline
Commitment, in substantially the form of Exhibit B.

“Swingline Rate” shall mean, for any Interest Period, the rate as offered by the
Administrative Agent and accepted by the Borrower. The Borrower is under no
obligation to accept this rate and the Administrative Agent is under no
obligation to provide it.

“Swingline Termination Date” shall mean the Commitment Termination Date.

“Synthetic Lease” shall mean a lease transaction under which the parties intend
that (a) the lease will be treated as an “operating lease” by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended, and
(b) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.

“Synthetic Lease Obligations” shall mean, with respect to any Person, the sum of
(a) all remaining rental obligations of such Person as lessee under Synthetic
Leases that are attributable to principal and, without duplication, (b) all
rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

“Type”, when used in reference to a Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Base Rate.

“Voting Stock” shall mean, with respect to any Person, Capital Stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right to vote has
been suspended by the happening of such a contingency.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

Section 1.2 Classifications of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g. a “Revolving
Loan” or “Swingline Loan”) or by Type (e.g. a “Eurodollar Loan” or “Base Rate
Loan”) or by Class and Type (e.g. “Revolving Eurodollar Loan”). Borrowings also
may be classified and referred to by Class (e.g. “Revolving Borrowing”) or by
Type (e.g. “Eurodollar Borrowing”) or by Class and Type (e.g. “ Revolving
Eurodollar Borrowing”).

 

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Section 1.3 Accounting Terms and Determination. Unless otherwise defined or
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for such
changes approved by the Borrower’s independent public accountants) with the most
recent audited consolidated financial statement of the Borrower delivered
pursuant to Section 5.1(a); provided, that if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article
VI to eliminate the effect of any change in GAAP on the operation of such
covenant (or if the Administrative Agent notifies the Borrower that the Required
Lenders wish to amend Article VI for such purpose), then the Borrower’s
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Lenders.

Section 1.4 Terms Generally. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include’, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”. The word “will” shall be
construed to have the same meaning and effect as the word “shall”. In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including” and the word “to” means “to but
excluding”. Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person’s successors and permitted assigns,
(iii) the words “hereof”, “herein” and “hereunder” and words of similar import
shall be construed to refer to this Agreement as a whole and not to any
particular provision hereof, (iv) all references to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles, Sections, Exhibits and
Schedules to this Agreement and (v) all references to a specific time shall be
construed to refer to the time in the city and state of the Administrative
Agent’s principal office, unless otherwise indicated.

ARTICLE II

AMOUNT AND TERMS OF THE COMMITMENTS

Section 2.1 General Description of Facilities. Subject to and upon the terms and
conditions herein set forth, (a) the Lenders hereby establish in favor of the
Borrower a revolving credit facility pursuant to which the Lenders severally
agree (to the extent of each Lender’s Pro Rata Share up to such Lender’s
Revolving Commitment) to make Revolving Loans to the Borrower in accordance with
Section 2.2), (b) the Issuing Bank agrees to issue Letters of Credit in
accordance with Section 2.22, (c) the Swingline Lender agrees to make Swingline
Loans in accordance with Section 2.4, and (d) each Lender agrees to purchase a
participation interest in the Letters of Credit and the Swingline Loans pursuant
to the terms and conditions hereof; provided, that in no event shall the sum of
the aggregate outstanding Revolving Credit Exposures of all Lenders exceed at
any time the Aggregate Revolving Commitments then in effect.

 

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Section 2.2 Revolving Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Revolving Loans to the Borrower,
from time to time during the Availability Period, in an aggregate principal
amount outstanding at any time that will not result in (i) such Lender’s
Revolving Credit Exposure exceeding such Lender’s Revolving Commitment or
(ii) the sum of the aggregate Revolving Credit Exposures of all Lenders
exceeding the Aggregate Revolving Commitments. During the Availability Period,
the Borrower shall be entitled to borrow, prepay and reborrow Revolving Loans in
accordance with the terms and conditions of this Agreement; provided, that the
Borrower may not borrow or reborrow should there exist a Default or Event of
Default.

Section 2.3 Procedure for Revolving Borrowings. The Borrower shall give the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of each Revolving Borrowing, substantially in the form of Exhibit 2.3
attached hereto (a “Notice of Revolving Borrowing”), (a) prior to 12:00 noon on
the requested date of each Base Rate Borrowing and (b) prior to 12:00 noon three
(3) Business Days prior to the requested date of each Eurodollar Borrowing. Each
Notice of Revolving Borrowing shall be irrevocable and shall specify: (i) the
aggregate principal amount of such Borrowing, (ii) the date of such Borrowing
(which shall be a Business Day), (iii) the Type of such Revolving Loan
comprising such Borrowing and (iv) in the case of a Eurodollar Borrowing, the
duration of the initial Interest Period applicable thereto (subject to the
provisions of the definition of Interest Period). Each Revolving Borrowing shall
consist entirely of Base Rate Loans or Eurodollar Loans, as the Borrower may
request. The aggregate principal amount of each Eurodollar Borrowing shall be
not less than $5,000,000 or a larger multiple of $1,000,000, and the aggregate
principal amount of each Base Rate Borrowing shall not be less than $1,000,000
or a larger multiple of $100,000; provided, that Base Rate Loans made pursuant
to Section 2.5 or Section 2.22(d) may be made in lesser amounts as provided
therein. At no time shall the total number of Eurodollar Borrowings outstanding
at any time exceed ten (10). Promptly following the receipt of a Notice of
Revolving Borrowing in accordance herewith, the Administrative Agent shall
advise each Lender of the details thereof and the amount of such Lender’s
Revolving Loan to be made as part of the requested Revolving Borrowing.

Section 2.4 Swingline Loans. Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Swingline Loans to the Borrower,
from time to time from the Closing Date to the Swingline Termination Date, in an
aggregate principal amount outstanding at any time not to exceed the lesser of
(a) the Swingline Commitment then in effect and (b) the difference between the
Aggregate Revolving Commitments and the aggregate outstanding Revolving Credit
Exposures of all Lenders; provided, that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding Swingline Loan.
The Borrower shall be entitled to borrow, repay and reborrow Swingline Loans in
accordance with the terms and conditions of this Agreement.

Section 2.5 Procedure for Swingline Borrowing; Etc.

(a) The Borrower shall give the Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of each Swingline Borrowing
(“Notice of Swingline Borrowing”) prior to 12:00 noon on the requested date of
each Swingline Borrowing. Each Notice of Swingline Borrowing shall be
irrevocable and shall specify: (i) the principal amount of such Swingline Loan,
(ii) the date of such Swingline Loan (which shall be a Business Day) and
(iii) the account of the Borrower to which the proceeds of such Swingline Loan
should be credited. The Administrative Agent will promptly advise the Swingline
Lender of each Notice of Swingline Borrowing. Each Swingline Loan shall accrue
interest at the rate specified in Section 2.12(b) and shall have an Interest
Period (subject to the definition thereof) as agreed between the Borrower and
the Swingline Lender. The aggregate principal amount of each Swingline Loan
shall be not less than $100,000 or a larger multiple of $50,000, or such other
minimum amounts agreed to by the Swingline Lender and the Borrower. The
Swingline Lender will make the proceeds of each Swingline Loan available to the
Borrower in Dollars in immediately available funds at the account specified by
the Borrower in the applicable Notice of

 

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Swingline Borrowing not later than 1:00 p.m. on the requested date of such
Swingline Loan. The Administrative Agent will notify the Lenders on a quarterly
basis if any Swingline Loans occurred during such quarter.

(b) The Swingline Lender, at any time and from time to time in its sole
discretion, may, on behalf of the Borrower (which hereby irrevocably authorizes
and directs the Swingline Lender to act on its behalf), give a Notice of
Revolving Borrowing to the Administrative Agent requesting the Lenders
(including the Swingline Lender) to make Base Rate Loans in an amount equal to
the unpaid principal amount of any Swingline Loan. Each Lender will make the
proceeds of its Base Rate Loan included in such Borrowing available to the
Administrative Agent for the account of the Swingline Lender in accordance with
Section 2.6, which will be used solely for the repayment of such Swingline Loan.

(c) If for any reason a Base Rate Borrowing may not be (as determined in the
sole discretion of the Administrative Agent), or is not, made in accordance with
the foregoing provisions, then each Lender (other than the Swingline Lender)
shall purchase an undivided participating interest in such Swingline Loan in an
amount equal to its Pro Rata Share thereof on the date that such Base Rate
Borrowing should have occurred. On the date of such required purchase, each
Lender shall promptly transfer, in immediately available funds, the amount of
its participating interest to the Administrative Agent for the account of the
Swingline Lender. If such Swingline Loan bears interest at a rate other than the
Base Rate, such Swingline Loan shall automatically become a Base Rate Loan on
the effective date of any such participation and interest shall become payable
on demand.

(d) Each Lender’s obligation to make a Base Rate Loan pursuant to Section 2.5(b)
or to purchase the participating interests pursuant to Section 2.5(c) shall be
absolute and unconditional and shall not be affected by any circumstance,
including without limitation (i) any setoff, counterclaim, recoupment, defense
or other right that such Lender or any other Person may have or claim against
the Swingline Lender, the Borrower or any other Person for any reason
whatsoever, (ii) the existence of a Default or an Event of Default (other than
an Event of Default in existence at the time of the making of any Swingline Loan
by the Swingline Lender of which the Swingline Lender had actual knowledge) or
the termination of any Lender’s Revolving Commitment, (iii) the existence (or
alleged existence) of any event or condition which has had or could reasonably
be expected to have a Material Adverse Effect, (iv) any breach of this Agreement
or any other Loan Document by the Borrower, the Administrative Agent or any
Lender or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing. If such amount is not in fact made
available to the Swingline Lender by any Lender, the Swingline Lender shall be
entitled to recover such amount on demand from such Lender, together with
accrued interest thereon for each day from the date of demand thereof at the
Federal Funds Rate. Until such time as such Lender makes its required payment,
the Swingline Lender shall be deemed to continue to have outstanding Swingline
Loans in the amount of the unpaid participation for all purposes of the Loan
Documents. In addition, such Lender shall be deemed to have assigned any and all
payments made of principal and interest on its Loans and any other amounts due
to it hereunder, to the Swingline Lender to fund the amount of such Lender’s
participation interest in such Swingline Loans that such Lender failed to fund
pursuant to this Section 2.5, until such amount has been purchased in full.

Section 2.6 Funding of Borrowings.

(a) Each Lender will make available each Loan to be made by it hereunder on the
proposed date thereof by wire transfer in immediately available funds by 1:00
p.m. to the Administrative Agent at the Payment Office; provided, that the
Swingline Loans will be made as set forth in Section 2.5. The Administrative
Agent will make such Loans available to the Borrower by promptly crediting the
amounts that it receives, in like funds by the close of business on such
proposed date, to an account maintained by the Borrower with the Administrative
Agent or at the Borrower’s option, by effecting a wire transfer of such amounts
to an account designated by the Borrower to the Administrative Agent.

 

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(b) Unless the Administrative Agent shall have been notified by any Lender prior
to 5:00 p.m. one (1) Business Day prior to the date of a Borrowing in which such
Lender is participating that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such date, and the Administrative Agent, in reliance on
such assumption, may make available to the Borrower on such date a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender on the date of such Borrowing, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest at the Federal Funds Rate for up
to two (2) days and thereafter at the rate specified for such Borrowing. If the
Administrative Agent has made available to the Borrower any Lender’s share of
such Borrowing and such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent’s demand therefor, the Administrative Agent shall
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent together with interest at the
rate specified for such Borrowing. Nothing in this subsection shall be deemed to
relieve any Lender from its obligation to fund its Pro Rata Share of any
Borrowing hereunder or to prejudice any rights which the Borrower may have
against any Lender as a result of any default by such Lender hereunder.

(c) All Revolving Borrowings shall be made by the Lenders on the basis of their
respective Pro Rata Shares. No Lender shall be responsible for any default by
any other Lender in its obligations hereunder, and each Lender shall be
obligated to make its Loans provided to be made by it hereunder, regardless of
the failure of any other Lender to make its Loans hereunder.

Section 2.7 Interest Elections.

(a) Each Borrowing initially shall be of the Type specified in the applicable
Notice of Borrowing, and in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Notice of Borrowing. Thereafter,
the Borrower may elect to convert such Borrowing into a different Type or to
continue such Borrowing, and in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section 2.7. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding Loans comprising such Borrowing, and the Loans comprising each
such portion shall be considered a separate Borrowing. This Section 2.7 shall
not apply to Swingline Borrowings, which may not be converted or continued.

(b) To make an election pursuant to this Section 2.7, the Borrower shall give
the Administrative Agent prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing (a “Notice of Conversion/Continuation”)
that is to be converted or continued, as the case may be, (x) prior to 12:00
noon on the Business Day of the requested date of a conversion into a Base Rate
Borrowing and (y) prior to 12:00 noon three (3) Business Days prior to a
continuation of or conversion into a Eurodollar Borrowing. Each such Notice of
Conversion/Continuation shall be irrevocable and shall specify (i) the Borrowing
to which such Notice of Continuation/Conversion applies and if different options
are being elected with respect to different portions thereof, the portions
thereof that are to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) shall be
specified for each resulting Borrowing); (ii) the effective date of the election
made pursuant to such Notice of Continuation/Conversion, which shall be a
Business Day, (iii) whether the resulting Borrowing is to be a Base Rate
Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is to
be a Eurodollar Borrowing, the Interest Period applicable thereto after giving
effect to such election, which shall be a period contemplated by the definition
of “Interest Period”. If any such Notice of

 

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Continuation/Conversion requests a Eurodollar Borrowing but does not specify an
Interest Period, the Borrower shall be deemed to have selected an Interest
Period of one month. The principal amount of any resulting Borrowing shall
satisfy the minimum borrowing amount for Eurodollar Borrowings and Base Rate
Borrowings set forth in Section 2.3.

(c) If, on the expiration of any Interest Period in respect of any Eurodollar
Borrowing, the Borrower shall have failed to deliver a Notice of
Conversion/Continuation, then, unless such Borrowing is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such Borrowing
to a Base Rate Borrowing. No Borrowing may be converted into, or continued as, a
Eurodollar Borrowing if a Default or an Event of Default exists, unless the
Administrative Agent and each of the Lenders shall have otherwise consented in
writing. No conversion of any Eurodollar Loans shall be permitted except on the
last day of the Interest Period in respect thereof.

(d) Upon receipt of any Notice of Conversion/Continuation, the Administrative
Agent shall promptly notify each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

Section 2.8 Optional Reduction and Termination of Commitments; Extension of
Commitments; Increase of Aggregate Revolving Commitments; Additional Lenders.

(a) Unless previously terminated, all Revolving Commitments shall terminate on
the Commitment Termination Date, except that the Swingline Commitment shall
terminate on the Swingline Termination Date.

(b) Upon at least three (3) Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent (which notice
shall be irrevocable), the Borrower may reduce the Aggregate Revolving
Commitments in part or terminate the Aggregate Revolving Commitments in whole;
provided, that (i) any partial reduction shall apply to reduce proportionately
and permanently the Revolving Commitment of each Lender, (ii) any partial
reduction pursuant to this Section 2.8(b) shall be in an amount of at least
$5,000,000 and any larger multiple of $1,000,000, and (iii) no such reduction
shall be permitted which would reduce the Aggregate Revolving Commitments to an
amount less than the sum of the aggregate outstanding Revolving Credit Exposures
of all Lenders. Any such reduction in the Aggregate Revolving Commitments shall
result in a proportionate and permanent reduction (rounded to the next lowest
integral multiple of $100,000) in the Swingline Commitment and the LC
Commitment.

(c) So long as no Event of Default has occurred and is continuing, from time to
time after the Closing Date, Borrower may, upon at least 30 days’ written notice
to the Administrative Agent, who shall promptly notify the Lenders, propose to
increase the Aggregate Revolving Commitments up to an amount not to exceed
$150,000,000 less the amount of any permanent reductions in the Aggregate
Revolving Commitments pursuant to Section 2.8(b) (the amount of any such
increase, the “Additional Revolving Commitment Amount”). Each Lender shall have
the right for a period of fifteen (15) days following receipt of such notice to
elect by written notice to the Borrower and the Administrative Agent to increase
its Revolving Commitment by a principal amount equal to its Pro Rata Share of
the Additional Revolving Commitment Amount. No Lender (or any successor thereto)
shall have any obligation to increase its Revolving Commitment or its other
obligations under this Agreement and the other Loan Documents, and any decision
by a Lender to increase its Revolving Commitment shall be made in its sole
discretion independently from any other Lender.

 

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(d) If any Lender shall not elect to increase its Revolving Commitment pursuant
to subsection (c) of this Section 2.8, the Borrower may, to the extent necessary
to increase the Aggregate Revolving Commitments by the then unsubscribed
Additional Revolving Commitment Amount, designate another bank or other
financial institution (which may be, but need not be, one or more of the
existing Lenders) which at the time agrees to, in the case of any such Person
that is an existing Lender, increase its Revolving Commitment and in the case of
any other such Person (an “Additional Lender”), become a party to this
Agreement; provided, however, that each Additional Lender must be acceptable to
the Administrative Agent in its sole discretion, which acceptance will not be
unreasonably withheld. The sum of the increases in the Revolving Commitments of
the existing Lenders plus the Revolving Commitments of the Additional Lenders
shall not in the aggregate exceed the Additional Revolving Commitment Amount.

(e) An increase in the aggregate amount of the Revolving Commitments pursuant to
this Section 2.8 shall become effective upon the receipt by the Administrative
Agent of an agreement in form and substance satisfactory to the Administrative
Agent signed by the Borrower, by each Additional Lender and by each other Lender
whose Revolving Commitment is to be increased, setting forth the new Revolving
Commitments of such Lenders and setting forth the agreement of each Additional
Lender to become a party to this Agreement and to be bound by all the terms and
provisions hereof, together with a replacement or additional Revolving Credit
Note, as applicable, evidencing the new Revolving Commitment of each affected
Lender, duly executed and delivered by the Borrower, and such evidence of
appropriate corporate authorization on the part of the Borrower with respect to
the increase in the Aggregate Revolving Commitments and other documents with
respect to the increase in the Revolving Commitments as the Administrative Agent
may reasonably request.

(f) Upon any increase in the Aggregate Revolving Commitments pursuant to this
Section 2.8 that is not pro rata among all Lenders, (i) within five Business
Days in the case of any Base Rate Loans then outstanding, and at the end of the
then applicable Interest Period in the case of any Eurodollar Loans then
outstanding, the Borrower shall prepay such Loans in their entirety and, to the
extent the Borrower elects to do so and subject to the conditions specified in
Article III hereof, the Borrower shall reborrow Loans from the Lenders in
proportion to their Pro Rata Share after giving effect to such increase, until
such time as all outstanding Loans are held by the Lenders in such proportion
and (ii) effective upon such increase, the amount of the participations held by
each Lender in each Letter of Credit then outstanding shall be deemed adjusted
such that, after giving effect to such adjustments, the Lenders shall hold
participations in each such Letter of Credit in the proportion its respective
Revolving Commitment bears to the Aggregate Revolving Commitments after giving
effect to such increase.

Section 2.9 Repayment of Loans.

(a) The outstanding principal amount of all Revolving Loans shall be due and
payable on the Commitment Termination Date. Interest on all Revolving Loans
shall be payable as set forth in Section 2.12(d).

(b) The principal amount of each Swingline Loan shall be due and payable on the
earlier of (i) the date ten Business Days after such Loan is made and (ii) the
Swingline Termination Date. Interest on all Swingline Loans shall be payable as
set forth in Section 2.12(d).

Section 2.10 Evidence of Indebtedness.

(a) Each Lender shall maintain in accordance with its usual practice appropriate
records evidencing the indebtedness of the Borrower to such Lender resulting
from each Loan made by such Lender from time to time, including the amounts of
principal and interest payable thereon and paid to such Lender from time to time
under this Agreement. The Administrative Agent shall maintain

 

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appropriate records in which shall be recorded (i) the Revolving Commitment of
each Lender, (ii) the amount of each Loan made hereunder by each Lender, the
Class and Type thereof and the Interest Period applicable thereto, (iii) the
date of each continuation thereof pursuant to Section 2.7, (iv) the date of each
conversion of all or a portion thereof to another Type pursuant to Section 2.7,
(v) the date and amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder in respect of
such Loans and (vi) both the date and amount of any sum received by the
Administrative Agent hereunder from the Borrower in respect of the Loans and
each Lender’s Pro Rata Share thereof. The entries made in such records shall be
prima facie evidence of the existence and amounts of the obligations of the
Borrower therein recorded; provided, that the failure or delay of any Lender or
the Administrative Agent in maintaining or making entries into any such record
or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans (both principal and unpaid accrued interest) of such
Lender in accordance with the terms of this Agreement.

(b) At the request of any Lender (including the Swingline Lender) at any time,
the Borrower agrees that it will execute and deliver to such Lender a Revolving
Credit Note, and, in the case of the Swingline Lender only, a Swingline Note,
payable to the order of such Lender. At the request of the Borrower, any such
Revolving Credit Note or Swingline Note may be executed and delivered by the
Borrower outside of the State of Florida in such location within the continental
United States as may reasonably be acceptable to the Administrative Agent.

Section 2.11 Prepayments.

(a) Mandatory Prepayments. The Borrower shall be required to make mandatory
principal prepayments to the Administrative Agent without the Administrative
Agent’s further demand therefor if, as of any fiscal quarter end of the
Borrower, the sum of the aggregate outstanding Revolving Credit Exposures of all
Lenders exceed the aggregate amount that the Borrower would then have been
entitled to borrow or retain under the applicable provisions of Section 2.1.
Such mandatory principal prepayment shall be in the amount necessary to reduce
the sum of the aggregate outstanding Revolving Credit Exposures of all Lenders
to the maximum amount that the Borrower then would be entitled to borrow or
retain hereunder and shall be made, in any event, within ten (10) days after the
end of the applicable fiscal quarter end of Borrower.

(b) Optional Prepayments. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing, in whole or in part, without premium or
penalty, by giving irrevocable written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent no later than 12:00 noon,
(i) in the case of prepayment of any Eurodollar Borrowing, not less than three
(3) Business Days prior to any such prepayment, (ii) in the case of any
prepayment of any Base Rate Borrowing, on the Business Day of such prepayment,
and (iii) in the case of Swingline Borrowings, on the date of such prepayment.
Each such notice shall be irrevocable and shall specify the proposed date of
such prepayment and the principal amount of each Borrowing or portion thereof to
be prepaid. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each affected Lender of the contents thereof and of such
Lender’s Pro Rata Share of any such prepayment. If such notice is given, the
aggregate amount specified in such notice shall be due and payable on the date
designated in such notice, together with accrued interest to such date on the
amount so prepaid in accordance with Section 2.12(d); provided, that if a
Eurodollar Borrowing is prepaid on a date other than the last day of an Interest
Period applicable thereto, the Borrower shall also pay all amounts required
pursuant to Section 2.18. Each partial prepayment of any Loan (other than a
Swingline Loan) shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type pursuant to Section 2.3 or in
the case of a Swingline Loan pursuant to Section 2.5. Each prepayment of a
Borrowing shall be applied ratably to the Loans comprising such Borrowing.

 

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Section 2.12 Interest on Loans.

(a) The Borrower shall pay interest on each Base Rate Loan at the Base Rate in
effect from time to time and on each Eurodollar Loan at the Adjusted LIBO Rate
for the applicable Interest Period in effect for such Loan, plus, in each case,
the Applicable Margin in effect from time to time but, in no event, to exceed
the Maximum Rate.

(b) The Borrower shall pay interest on each Swingline Loan at the Swingline Rate
in effect from time to time but, in no event, to exceed the Maximum Rate.

(c) While an Event of Default exists or after acceleration, at the option of the
Required Lenders, the Borrower shall pay interest (“Default Interest”) with
respect to all Eurodollar Loans at the rate otherwise applicable for the
then-current Interest Period plus an additional two percent (2%) per annum until
the last day of such Interest Period, and thereafter, and with respect to all
Base Rate Loans (including all Swingline Loans) and all other Obligations
hereunder (other than Loans), at an all-in rate in effect for Base Rate Loans
(i.e., including Applicable Margin), plus an additional 2% per annum.

(d) Interest on the principal amount of all Loans shall accrue from and
including the date such Loans are made to but excluding the date of any
repayment thereof. Interest on all outstanding Base Rate Loans shall be payable
quarterly in arrears on the last Business Day of each fiscal quarter of the
Borrower and on the Commitment Termination Date. Interest on all outstanding
Eurodollar Loans shall be payable on the last day of each Interest Period
applicable thereto, and, in the case of any Eurodollar Loans having an Interest
Period in excess of three months, on each day which occurs every three months
after the initial date of such Interest Period, and on the Commitment
Termination Date. Interest on each Swingline Loan shall be payable quarterly in
arrears on the last Business Day of each fiscal quarter of the Borrower and on
the Swingline Termination Date. Interest on any Loan which is converted into a
Loan of another Type or which is repaid or prepaid shall be payable on the date
of such conversion or on the date of any such repayment or prepayment (on the
amount repaid or prepaid) thereof. All Default Interest shall be payable on
demand.

(e) The Administrative Agent shall determine each interest rate applicable to
the Loans hereunder and shall promptly notify the Borrower and the Lenders of
such rate in writing (or by telephone, promptly confirmed in writing). Any such
determination shall be conclusive and binding for all purposes, absent manifest
error.

Section 2.13 Fees.

(a) Administrative Agent Fees. The Borrower shall pay to the Administrative
Agent for its own account fees in the amounts and at the times previously agreed
upon the Borrower and the Administrative Agent.

(b) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at the
Applicable Percentage (determined quarterly in accordance with Schedule I) on
the average daily amount of the unused Revolving Commitment of such Lender
during the Availability Period; provided, that if such Lender continues to have
any Revolving Credit Exposure after the Commitment Termination Date, then the
commitment fee shall continue to accrue on the average daily amount of such
Lender’s unused Revolving Commitment from and after the Commitment Termination
Date to the date that all of such Lender’s Revolving Credit Exposure has been
paid in full. The Applicable Percentage shall initially be 0.100%, but shall be
reset from time to time as provided in the definition of “Applicable Percentage”
herein. Accrued commitment fees shall be payable in arrears on the last Business
Day of each fiscal quarter of the Borrower and on the Commitment

 

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Termination Date, commencing on the first such date after the Closing Date;
provided that any commitment fees accruing after the Commitment Termination Date
shall be payable on demand. For purposes of computing commitment fees with
respect to the Revolving Commitments, the Revolving Commitment of each Lender
shall be deemed used to the extent of the outstanding Revolving Loans and LC
Exposure of such Lender (but outstanding Swingline Loans shall not be deemed
usage of the Revolving Commitment of each Lender).

(c) Letter of Credit Fees. The Borrower agrees to pay (i) to the Administrative
Agent, for the account of each Lender, a letter of credit fee with respect to
its participation in each Letter of Credit, which shall accrue at the Applicable
Margin then in effect for Eurodollar Borrowings on the average daily amount of
such Lender’s LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) attributable to such Letter of Credit during the
period from and including the date of issuance of such Letter of Credit to but
excluding the date on which such Letter expires or is drawn in full (including
without limitation any LC Exposure that remains outstanding after the Commitment
Termination Date) and (ii) to the Issuing Bank for its own account a fronting
fee, which shall accrue at the rate of 0.125% per annum on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the Availability Period (or until the date
that such Letter of Credit is irrevocably cancelled, whichever is later), as
well as the Issuing Bank’s standard fees with respect to issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder.

(d) Payments. Accrued fees shall be payable quarterly in arrears on the last
Business Day of each fiscal quarter of the Borrower, commencing on September 30,
2007 and on the Commitment Termination Date (and if later, the date the Loans
and LC Exposure shall be repaid in their entirety).

Section 2.14 Computation of Interest and Fees. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America’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 2.20, 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.

Section 2.15 Inability to Determine Interest Rates. If prior to the commencement
of any Interest Period for any Eurodollar Borrowing:

(a) the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant interbank market, adequate means do not exist for
ascertaining LIBOR for such Interest Period; or

(b) the Administrative Agent shall have received notice from the Required
Lenders that the Adjusted LIBO Rate does not adequately and fairly reflect the
cost to such Lenders (or Lender, as the case may be) of making, funding or
maintaining their (or its, as the case may be) Eurodollar Loans for such
Interest Period;

then the Administrative Agent shall give written notice (or telephonic notice,
promptly confirmed in writing) to the Borrower and to the Lenders as soon as
practicable thereafter. In the case of Eurodollar Loans, until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) the obligations of
the Lenders to make

 

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Eurodollar Revolving Loans or to continue or convert outstanding Loans as or
into Eurodollar Loans shall be suspended and (ii) all such affected Loans shall
be converted into Base Rate Loans on the last day of the then current Interest
Period applicable thereto unless the Borrower prepays such Loans in accordance
with this Agreement. Unless the Borrower notifies the Administrative Agent at
least one (1) Business Day before the date of any Eurodollar Revolving Borrowing
for which a Notice of Revolving Borrowing has previously been given that it
elects not to borrow on such date, then such Revolving Borrowing shall be made
as a Base Rate Borrowing.

Section 2.16 Illegality. If any Change in Law shall make it unlawful or
impossible for any Lender to make, maintain or fund any Eurodollar Loan and such
Lender shall so notify the Administrative Agent, the Administrative Agent shall
promptly give notice thereof to the Borrower and the other Lenders, whereupon
until such Lender notifies the Administrative Agent and the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Lender to make Eurodollar Revolving Loans, or to continue or convert
outstanding Loans as or into Eurodollar Loans, shall be suspended. In the case
of the making of a Eurodollar Revolving Borrowing, such Lender’s Revolving Loan
shall be made as a Base Rate Loan as part of the same Revolving Borrowing for
the same Interest Period and if the affected Eurodollar Loan is then
outstanding, such Loan shall be converted to a Base Rate Loan either (a) on the
last day of the then current Interest Period applicable to such Eurodollar Loan
if such Lender may lawfully continue to maintain such Loan to such date or
(b) immediately if such Lender shall determine that it may not lawfully continue
to maintain such Eurodollar Loan to such date. Notwithstanding the foregoing,
the affected Lender shall, prior to giving such notice to the Administrative
Agent, designate a different Applicable Lending Office if such designation would
avoid the need for giving such notice and if such designation would not
otherwise be disadvantageous to such Lender in the good faith exercise of its
discretion.

Section 2.17 Increased Costs.

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement that is not otherwise included in the determination of the Adjusted
LIBO Rate hereunder against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or the Issuing Bank; or

(ii) impose on any Lender or on the Issuing Bank or the eurodollar interbank
market any other condition affecting this Agreement or any Eurodollar Loans made
by such Lender or any Letter of Credit or any participation therein;

and the result of the foregoing is to increase the cost to such Lender of
making, converting into, continuing or maintaining a Eurodollar Loan or to
increase the cost to such Lender or the Issuing Bank of participating in or
issuing any Letter of Credit or to reduce the amount received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or any
other amount), then the Borrower shall promptly pay, upon written notice from
and demand by such Lender on the Borrower (with a copy of such notice and demand
to the Administrative Agent), to the Administrative Agent for the account of
such Lender, within five (5) Business Days after the date of such notice and
demand, additional amount or amounts sufficient to compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.

 

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(b) If any Lender or the Issuing Bank shall have determined that on or after the
date of this Agreement any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital (or on the capital of such Lender’s or the Issuing Bank’s
parent corporation) as a consequence of its obligations hereunder or under or in
respect of any Letter of Credit to a level below that which such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s parent corporation could
have achieved but for such Change in Law, then, from time to time, within five
(5) Business Days after receipt by the Borrower of written demand by such Lender
(with a copy thereof to the Administrative Agent), the Borrower shall pay to
such Lender such additional amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s parent corporation for any
such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Bank or such Lender’s
or the Issuing Bank’s parent corporation, as the case may be, specified in
paragraph (a) or (b) of this Section 2.17 shall be delivered to the Borrower
(with a copy to the Administrative Agent) and shall be conclusive, absent
manifest error. The Borrower shall pay any such Lender or the Issuing Bank, as
the case may be, such amount or amounts within ten (10) days after receipt
thereof.

(d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation pursuant to this Section 2.17 shall not constitute a waiver of such
Lender’s or the Issuing Bank’s right to demand such compensation.

Section 2.18 Funding Indemnity. In the event of (a) the payment of any principal
of a Eurodollar Loan other than on the last day of the Interest Period
applicable thereto (including as a result of an Event of Default), (b) the
conversion or continuation of a Eurodollar Loan other than on the last day of
the Interest Period applicable thereto, or (c) the failure by the Borrower to
borrow, prepay, convert or continue any Eurodollar Loan on the date specified in
any applicable notice (regardless of whether such notice is withdrawn or
revoked), then, in any such event, the Borrower shall compensate each Lender,
within five (5) Business Days after written demand from such Lender, for any
loss, cost or expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense shall be deemed to include an amount determined
by such Lender to be the excess, if any, of (i) the amount of interest that
would have accrued on the principal amount of such Eurodollar Loan if such event
had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan
for the period from the date of such event to the last day of the then current
Interest Period therefor (or in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such
Eurodollar Loan) over (ii) the amount of interest that would accrue on the
principal amount of such Eurodollar Loan for the same period if the Adjusted
LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted or
the date on which the Borrower failed to borrow, convert or continue such
Eurodollar Loan. A certificate as to any additional amount payable under this
Section 2.18 submitted to the Borrower by any Lender shall be conclusive, absent
manifest error.

Section 2.19 Taxes.

(a) Any and all payments by or on account of any obligation of the Borrower
hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.19) the Administrative Agent, any Lender or the Issuing
Bank (as the case may be) shall receive an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

 

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(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent, each Lender and the
Issuing Bank, within five (5) Business Days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.19) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender or
the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf
of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate. Without limiting the generality of the
foregoing, each Foreign Lender agrees that it will deliver to the Administrative
Agent and the Borrower (or in the case of a Participant, to the Lender from
which the related participation shall have been purchased) (i) two (2) duly
completed copies of Internal Revenue Service Form 1001 or 4224, or any successor
form thereto, as the case may be, certifying in each case that such Foreign
Lender is entitled to receive payments made by the Borrower hereunder and under
the Notes payable to it, without deduction or withholding of any United States
federal income taxes and (ii) a duly completed Internal Revenue Service Form W-8
or W-9, or any successor form thereto, as the case may be, to establish an
exemption from United State backup withholding tax. Each such Foreign Lender
shall deliver to the Borrower and the Administrative Agent such forms on or
before the date that it becomes a party to this Agreement (or in the case of a
Participant, on or before the date such Participant purchases the related
participation). In addition, each such Lender shall deliver such forms promptly
upon the obsolescence or invalidity of any form previously delivered by such
Lender. Each such Lender shall promptly notify the Borrower and the
Administrative Agent at any time that it determines that it is no longer in a
position to provide any previously delivered certificate to the Borrower (or any
other form of certification adopted by the U.S. taxing authorities for such
purpose).

Section 2.20 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.17, 2.18, 2.19, or 10.3, or otherwise) and
each optional prepayment permitted by Section 2.11(b) prior to 12:00 noon, on
the date when due, in immediately available funds, without set-off

 

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or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at the Payment Office,
except payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.17,
2.18, 2.19 and 10.3 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be made payable for the period of such extension. All payments
hereunder shall be made in Dollars.

(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

(c) If any Lender shall, by exercising any right of set-of or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolving Loans or participations in LC Disbursements or Swingline Loans
that would result in such Lender receiving payment of a greater proportion of
the aggregate amount of its Revolving Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements and Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements and Swingline Loans; provided, that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements or Swingline Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

(d) Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Bank hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Bank, as the case may
be, the amount or amounts due. In such event, if the Borrower has not in fact
made such payment, then each of the Lenders or the Issuing Bank, as the case may
be, severally agrees to repay to the Administrative Agent forthwith on demand
the amount so distributed to such Lender or Issuing Bank

 

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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.

(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Sections 2.5(b), 2.6(b), 2.20(d), 2.22(d) or (e) or 10.3(d), then
the Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.

Section 2.21 Mitigation of Obligations; Replacement of Lenders.

(a) If any Lender requests compensation under Section 2.17, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.19, 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 sole
judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable under Section 2.17 or Section 2.19, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all costs and expenses incurred by any Lender in connection
with such designation or assignment.

(b) If any Lender requests compensation under Section 2.17, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority of the account of any Lender pursuant to Section 2.19, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions set forth in
Section 10.4(b) all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender); provided, that (i) the Borrower shall have received the prior written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal amount of all Loans owed to it, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(in the case of such outstanding principal and accrued interest) and from the
Borrower (in the case of all other amounts) and (iii) in the case of a claim for
compensation under Section 2.17 or payments required to be made pursuant to
Section 2.19, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.

Section 2.22 Letters of Credit.

(a) On the Closing Date, SunTrust Bank, as the Issuing Bank of the Existing
Letters of Credit, in reliance upon the agreements of the other Lenders pursuant
to Section 2.22(d), agrees to continue the prior issuance of the Existing
Letters of Credit on the terms and conditions set forth therein. All Existing
Letters of Credit shall be deemed to have been issued pursuant hereto, and from
and after the Closing Date shall be subject to and governed by the terms and
conditions hereof. Thereafter during the Availability Period, the Issuing Bank,
in reliance upon said agreements of the other Lenders pursuant to
Section 2.22(d), agrees to issue, at the request of the Borrower, Letters of
Credit for the account of the Borrower or any Subsidiary Loan Party on the terms
and conditions hereinafter set forth; provided, that (i) each Letter of Credit
shall expire on the earlier of (A) the date one year after the

 

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date of issuance of such Letter of Credit (or in the case of any renewal or
extension thereof, one year after such renewal or extension) and (B) the date
that is five (5) Business Days prior to the Commitment Termination Date;
(ii) each Letter of Credit may be in any stated amount subject, however, to the
provisions of clause (iii) hereof; and (iii) neither the Borrower nor any
Subsidiary Loan Party may request any Letter of Credit, if, after giving effect
to such issuance (A) the aggregate LC Exposure would exceed the LC Commitment or
(B) the sum of the aggregate outstanding Revolving Credit Exposures of all
Lenders would exceed the Aggregate Revolving Commitments. Upon the issuance of
each Letter of Credit (which, as set forth in the definition thereof, includes
each Existing Letter of Credit set forth on Schedule 2.22), each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Issuing Bank without recourse a participation in such Letter of Credit equal
to such Lender’s Pro Rata Share of the aggregate amount available to be drawn
under such Letter of Credit. Each issuance of a Letter of Credit shall be deemed
to utilize the Revolving Commitment of each Lender by an amount equal to the
amount of such participation.

(b) To request the issuance of a Letter of Credit (or any amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall give the
Issuing Bank and the Administrative Agent irrevocable written notice at least
three (3) Business Days prior to the requested date of such issuance specifying
the date (which shall be a Business Day) such Letter of Credit is to be issued
(or amended, extended or renewed, as the case may be), the expiration date of
such Letter of Credit, the amount of such Letter of Credit, the name and address
of the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. In addition to the
satisfaction of the conditions in Article III, the issuance of such Letter of
Credit (or any amendment which increases the amount of such Letter of Credit)
will be subject to the further conditions that such Letter of Credit shall be in
such form and contain such terms as the Issuing Bank shall approve and that the
Borrower shall have executed and delivered any additional applications,
agreements and instruments relating to such Letter of Credit as the Issuing Bank
shall reasonably require; provided, that in the event of any conflict between
such applications, agreements or instruments and this Agreement, the terms of
this Agreement shall control.

(c) At least two (2) Business Days prior to the issuance of any Letter of
Credit, the Issuing Bank will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received such notice
and if not, the Issuing Bank will provide the Administrative Agent with a copy
thereof. Unless the Issuing Bank has received notice from the Administrative
Agent on or before the Business Day immediately preceding the date the Issuing
Bank is to issue the requested Letter of Credit directing the Issuing Bank not
to issue the Letter of Credit because such issuance is not then permitted
hereunder because of the limitations set forth in Section 2.22(a) or that one or
more conditions specified in Article III are not then satisfied, then, subject
to the terms and conditions hereof, the Issuing Bank shall, on the requested
date, issue such Letter of Credit in accordance with the Issuing Bank’s usual
and customary business practices.

(d) The Issuing Bank shall examine all documents purporting to represent a
demand for payment under a Letter of Credit promptly following its receipt
thereof. The Issuing Bank shall notify the Borrower and the Administrative Agent
of such demand for payment and whether the Issuing Bank has made or will make a
LC Disbursement thereunder; provided, that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to reimburse
the Issuing Bank and the Lenders with respect to such LC Disbursement. The
Borrower shall be irrevocably and unconditionally obligated to reimburse the
Issuing Bank for any LC Disbursements paid by the Issuing Bank in respect of
such drawing, without presentment, demand or other formalities of any kind.
Unless the Borrower shall have notified the Issuing Bank and the Administrative
Agent prior to 12:00 noon on the Business Day immediately prior to the date on
which such drawing is honored that the Borrower intends to reimburse the Issuing
Bank for the

 

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amount of such drawing in funds other than from the proceeds of Revolving Loans,
the Borrower shall be deemed to have timely given a Notice of Revolving
Borrowing to the Administrative Agent requesting the Lenders to make a Base Rate
Borrowing on the date on which such drawing is honored in an exact amount due to
the Issuing Bank; provided, that for purposes solely of such Borrowing, the
conditions precedents set forth in Section 3.2 hereof shall not be applicable.
The Administrative Agent shall notify the Lenders of such Borrowing in
accordance with Section 2.3, and each Lender shall make the proceeds of its Base
Rate Loan included in such Borrowing available to the Administrative Agent for
the account of the Issuing Bank in accordance with Section 2.6. The proceeds of
such Borrowing shall be applied directly by the Administrative Agent to
reimburse the Issuing Bank for such LC Disbursement.

(e) If for any reason a Base Rate Borrowing may not be (as determined in the
sole discretion of the Administrative Agent), or is not, made in accordance with
the foregoing provisions, then each Lender (other than the Issuing Bank) shall
be obligated to fund the participation that such Lender purchased pursuant to
subsection (a) in an amount equal to its Pro Rata Share of such LC Disbursement
on and as of the date which such Base Rate Borrowing should have occurred. Each
Lender’s obligation to fund its participation shall be absolute and
unconditional and shall not be affected by any circumstance, including without
limitation (i) any setoff, counterclaim, recoupment, defense or other right that
such Lender or any other Person may have against the Issuing Bank or any other
Person for any reason whatsoever, (ii) the existence of a Default or an Event of
Default (other than an Event of Default in existence at the time of the issuance
of any Letter of Credit by the Issuing Bank of which the Issuing Bank had actual
knowledge) or the termination of the Aggregate Revolving Commitments, (iii) any
adverse change in the condition (financial or otherwise) of the Borrower or any
of its Subsidiaries, (iv) any breach of this Agreement by the Borrower or any
other Lender, (v) any amendment, renewal or extension of any Letter of Credit or
(vi) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. On the date that such participation is required
to be funded, each Lender shall promptly transfer, in immediately available
funds, the amount of its participation to the Administrative Agent for the
account of the Issuing Bank. Whenever, at any time after the Issuing Bank has
received from any such Lender the funds for its participation in a LC
Disbursement, the Issuing Bank (or the Administrative Agent on its behalf)
receives any payment on account thereof, the Administrative Agent or the Issuing
Bank, as the case may be, will distribute to such Lender its Pro Rata Share of
such payment; provided, that if such payment is required to be returned for any
reason to the Borrower or to a trustee, receiver, liquidator, custodian or
similar official in any bankruptcy proceeding, such Lender will return to the
Administrative Agent or the Issuing Bank any portion thereof previously
distributed by the Administrative Agent or the Issuing Bank to it.

(f) To the extent that any Lender shall fail to pay any amount required to be
paid pursuant to paragraph (d) of this Section 2.22 on the due date therefor,
such Lender shall pay interest to the Issuing Bank (through the Administrative
Agent) on such amount from such due date to the date such payment is made at a
rate per annum equal to the Federal Funds Rate; provided, that if such Lender
shall fail to make such payment to the Issuing Bank within three (3) Business
Days of such due date, then, retroactively to the due date, such Lender shall be
obligated to pay Default Interest on such amount.

(g) If any Event of Default shall occur and be continuing, on the Business Day
that the Borrower receives notice from the Administrative Agent or the Required
Lenders demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders, an amount in
cash equal to the LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided, that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or notice of any kind, upon the occurrence of
any Event of Default with respect to the Borrower described in clause (g) or
(h) of Section 8.1. Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the

 

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obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. At the request of the Borrower, the
Administrative Agent shall hold such deposit in an interest-bearing money market
demand deposit account at the Borrower’s risk and expense; otherwise, such
deposit shall not bear interest. Interest and profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall
applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it had not been reimbursed and to the extent so applied,
shall be held for the satisfaction of the reimbursement obligations of the
Borrower for the LC Exposure at such time or, if the maturity of the Loans has
been accelerated, with the consent of the Required Lenders, be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not so applied as
aforesaid) shall be returned to the Borrower with three (3) Business Days after
all Events of Default have been cured or waived.

(h) Promptly following the end of each fiscal quarter, the Issuing Bank shall
deliver (through the Administrative Agent) to each Lender and the Borrower a
report describing the aggregate Letters of Credit outstanding at the end of such
fiscal quarter. Upon the request of any Lender from time to time, the Issuing
Bank shall deliver to such Lender any other information reasonably requested by
such Lender with respect to each Letter of Credit then outstanding.

(i) The Borrower’s obligation to reimburse LC Disbursements hereunder shall be
absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of this Agreement under all circumstances whatsoever
and irrespective of any of the following circumstances:

(i) Any lack of validity or enforceability of any Letter of Credit or this
Agreement;

(ii) The existence of any claim, set-off, defense or other right which the
Borrower or any Subsidiary or Affiliate of the Borrower may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any Persons
or entities for whom any such beneficiary or transferee may be acting), any
Lender (including the Issuing Bank) or any other Person, whether in connection
with this Agreement or the Letter of Credit or any document related hereto or
thereto or any unrelated transaction;

(iii) Any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect;

(iv) Payment by the Issuing Bank under a Letter of Credit against presentation
of a draft or other document to the Issuing Bank that does not comply with the
terms of such Letter of Credit;

(v) Any other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section 2.22,
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder; or

(vi) The existence of a Default or an Event of Default.

 

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Neither the Administrative Agent, the Issuing Bank, the Lenders nor any Related
Party of any of the foregoing shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to above), or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank;
provided, that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts or other documents presented under a Letter of Credit comply with
the terms thereof. The parties hereto expressly agree, that in the absence of
gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(j) (i) Each standby Letter of Credit shall be subject to the International
Standby Practices (ISP98 – International Chamber of Commerce Publication Number
590), as the same may be amended from time to time, and (ii) each commercial
Letter of Credit shall be subject to the rules of the Uniform Customs and
Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce at the time of issuance, and (iii) each Letter
of Credit, to the extent not inconsistent therewith, shall be subject to the
governing law of this Agreement set forth in Section 10.5.

(k) Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or
is for the account of, a Subsidiary Loan Party, the Borrower shall be obligated
to reimburse the Issuing Bank hereunder for any and all drawings under such
Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters
of Credit for the account of Subsidiaries inures to the benefit of the Borrower,
and that the Borrower’s business derives substantial benefits from the
businesses of such Subsidiary Loan Parties.

Section 2.23 Extension of Scheduled Commitment Termination Date.

(a) The Borrower may, by notice to the Administrative Agent (who shall promptly
notify the Lenders) not earlier than ninety (90) days and not later than
thirty-five (35) days prior to the first and/or second anniversaries of this
Agreement (each such anniversary being a “Modification Date”) request that each
Lender extend such Lender’s Scheduled Commitment Termination Date for an
additional year from the Scheduled Commitment Termination Date then in effect
hereunder (the “Existing Scheduled Commitment Termination Date”).

(b) Each Lender, acting in its sole and individual discretion, shall, by notice
to the Administrative Agent given not later than the date specified in the
notice from the Administrative Agent (the “Notice Date”), which date shall not
be earlier than ten (10) Business Days after the date of such notice and not
later than twenty (20) days prior to the applicable Modification Date, advise
the Administrative Agent whether or not such Lender agrees to such extension
(and each Lender that determines not to so extend its Maturity Date (a
“Non-Extending Lender”) shall notify the Administrative Agent of such fact
promptly after such determination (but in any event no later than the Notice
Date) and any Lender that does not so advise the Administrative Agent on or
before the Notice Date shall be deemed to be a Non-Extending Lender). The
election of any Lender to agree to such extension shall not obligate any other
Lender to so agree.

 

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(c) The Administrative Agent shall notify the Borrower of each Lender’s
determination under this Section no later than the date fifteen (15) days prior
to the Modification Date (or, if such date is not a Business Day, on the next
preceding Business Day).

(d) The Borrower shall have the right (but not the obligation) on or before the
Modification Date to replace each Non-Extending Lender with, and add as
“Lenders” under this Agreement in place thereof, one or more Eligible Assignees
(each, an “Additional Commitment Lender”) as provided in Section 2.21, each of
which Additional Commitment Lenders shall have entered into an Assignment and
Assumption pursuant to which such Additional Commitment Lender shall, effective
as of the Modification Date, undertake a Commitment (and, if any such Additional
Commitment Lender is already a Lender, its Commitment shall be in addition to
such Lender’s Commitment hereunder on such date).

(e) If (and only if) the total of the Commitments of the Lenders that have
agreed to so extend their Scheduled Commitment Termination Date and the
additional Commitments of the Additional Commitment Lenders shall be more than
50% of the aggregate amount of the Commitments in effect immediately prior to
the Modification Date, then, effective as of the Modification Date, the
Scheduled Commitment Termination Date of each Extending Lender and of each
Additional Commitment Lender shall be extended to the date falling one year
after the Existing Scheduled Commitment Termination Date (except that, if such
date is not a Business Day, such Scheduled Commitment Termination Date as so
extended shall be the next preceding Business Day) and each Additional
Commitment Lender shall thereupon become a “Lender” for all purposes of this
Agreement.

(f) Notwithstanding the foregoing, the extension of the Scheduled Commitment
Termination Date pursuant to this Section shall not be effective with respect to
any Lender unless the Borrower shall deliver to the Administrative Agent a
certificate of each Loan Party dated as of the Modification Date signed by a
Responsible Officer of such Loan Party certifying:

(i) no Default shall have occurred and be continuing on the date of such
extension and after giving effect thereto;

(ii) the representations and warranties contained in this Agreement are true and
correct in all material respects on and as of the date of such extension and
after giving effect thereto, as though made on and as of such date (except to
the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct in all material respects
as of such earlier date); and

(iii) on the Scheduled Commitment Termination Date of each Non-Extending Lender,
the Borrower shall prepay any Loans outstanding on such date (and pay any
additional amounts required pursuant to Section 2.18) to the extent necessary to
keep outstanding Loans ratable with any revised Pro Rata Share of the respective
Lenders effective as of such date.

(g) This Section shall supersede any provisions in Section 2.20 or 10.2 to the
contrary.

 

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ARTICLE III

CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT

Section 3.1 Conditions To Effectiveness. The obligations of the Lenders
(including the Swingline Lender) initially to make Loans and the obligation of
the Issuing Bank initially to issue any Letter of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.2).

(a) The Administrative Agent shall have received all fees and other amounts due
and payable on or prior to the Closing Date, including reimbursement or payment
of all out-of-pocket expenses (including reasonable fees, charges and
disbursements of counsel to the Administrative Agent) required to be reimbursed
or paid by the Borrower hereunder, under any other Loan Document and under any
agreement with the Administrative Agent or Banc of America Securities, LLC, as
Arranger.

(b) The Administrative Agent (or its counsel) shall have received the following:

(i) a counterpart of this Agreement signed by or on behalf of each party thereto
or written evidence satisfactory to the Administrative Agent (which may include
telecopy transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement;

(ii) if requested by any Lender, duly executed Notes payable to such Lender;

(iii) a duly executed Subsidiary Guarantee Agreement and Indemnity and
Contribution Agreement;

(iv) a certificate of the Secretary or Assistant Secretary, or manager or
member, as applicable, of each Loan Party, attaching and certifying copies of
its bylaws and of the resolutions of its boards of directors, or partnership
agreement or limited liability company operating agreement, or comparable
organizational documents and authorizations, authorizing the execution, delivery
and performance of the Loan Documents to which it is a party and certifying the
name, title and true signature of each officer of such Loan Party executing the
Loan Documents to which it is a party;

(v) certified copies of the articles of incorporation or other charter documents
of each Loan Party, together with certificates of good standing or existence, as
may be available from the Secretary of State of the jurisdiction of
incorporation or organization of such Loan Party and each other jurisdiction
where such Loan Party is required to be qualified to do business as a foreign
corporation;

(vi) a favorable written opinion of Moore & Van Allen PLLC, counsel to the Loan
Parties, addressed to the Administrative Agent and each of the Lenders, and
covering such matters relating to the Loan Parties, the Loan Documents and the
transactions contemplated therein as the Administrative Agent or the Lenders
shall reasonably request;

(vii) a certificate in the form of Exhibit 3.1(b)(vii), dated the Closing Date
and signed by a Responsible Officer, confirming compliance with the conditions
set forth in paragraphs (a), (b) and (c) of Section 3.2 and, further,
demonstrating compliance with Sections 6.1 and 6.2 as of the most recent fiscal
quarter ended;

 

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(viii) a certificate dated the Closing Date and signed by a Responsible Officer
certifying (A) that since March 31, 2007 there has been no event or condition
which has had or could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect, and (B) as to the absence of any
action, suit, investigation or proceeding pending or, to the knowledge of the
Borrower, threatened in any court or before any arbitrator or governmental
authority that could reasonably be expected to have a Material Adverse Effect;

(ix) certified copies of all consents, approvals, authorizations, registrations
or filings required to be made or obtained by each Loan Party in connection with
the Loans and any transaction being financed with the proceeds of the Loans;

(x) duly executed payoff letters, in form and substance satisfactory to the
Administrative Agent, executed by each lender holding Indebtedness to be
refinanced at closing, including but not limited to Indebtedness under the
Borrower’s $100,000,000 Revolving Credit Agreement dated December 10, 2004,
together with evidence satisfactory to the Administrative Agent as to the
termination of the Commitments thereunder, the payment in full of all
obligations owing thereunder and the release of any and all liens and security
interests securing such obligations;

(xi) UCC, judgment and tax lien searches in the jurisdiction of the chief
executive office and jurisdiction of incorporation or organization of each Loan
Party, together with copies of all financing statements on file in such
jurisdictions (with all attachments) and evidence that no Liens exist on any
assets or properties of any such Loan Party (other than Liens permitted by
Section 7.2);

(xii) a certificate of insurance issued on behalf of insurers of each Loan
Party, describing in reasonable detail the types and amounts of insurance
(property and liability) maintained by such Loan Party, naming the
Administrative Agent as additional insured under all liability insurance;

(xiii) duly executed Notices of Borrowing, if applicable; and

(xiv) a duly executed funds disbursement agreement.

Section 3.2 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, and the agreement of any Lender to extend the
Stated Commitment Termination Date pursuant to Section 2.8 is, in each case
subject to the satisfaction of the following conditions:

(a) at the time of and immediately after giving effect to such Borrowing, the
issuance, amendment, renewal or extension of such Letter of Credit or the
extension of the Scheduled Commitment Termination Date, as applicable, no
Default or Event of Default shall exist;

(b) all representations and warranties of each Loan Party set forth in the Loan
Documents shall be true and correct in all material respects on and as of the
date of such Borrowing, the date of issuance, amendment, extension or renewal of
such Letter of Credit or the date of extension of the Scheduled Commitment
Termination Date, as applicable, in each case before and after giving effect
thereto;

 

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(c) since the date of the most recent financial statements of the Borrower
described in Section 5.1(a) (or as to Loans and issuances on the Closing Date,
since March 31, 2007), there shall have been no change which has had or could
reasonably be expected to have a Material Adverse Effect;

(d) the Borrower shall have paid all fees payable under this Agreement to the
extent then due and payable; and

(e) the Administrative Agent shall have received such other documents,
certificates, information or legal opinions as the Administrative Agent or the
Required Lenders may reasonably request, all in form and substance reasonably
satisfactory to the Administrative Agent or the Required Lenders.

Each Borrowing, each issuance, amendment, extension or renewal of any Letter of
Credit and any extension of the Scheduled Commitment Termination Date shall be
deemed to constitute a representation and warranty by the Borrower on the date
thereof as to the matters specified in paragraphs (a), (b) and (c) of this
Section 3.2.

Section 3.3 Delivery of Documents. All of the Loan Documents, certificates,
legal opinions and other documents and papers referred to in this Article III,
unless otherwise specified, shall be delivered to the Administrative Agent for
the account of each of the Lenders and, except for the Notes, in sufficient
counterparts or copies for each of the Lenders and shall be in form and
substance satisfactory in all respects to the Administrative Agent.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Administrative Agent and each Lender
as follows:

Section 4.1 Existence; Power. The Borrower and each of its Subsidiaries (i) is
duly organized, validly existing and in good standing as a corporation or other
legally organized entity under the laws of the jurisdiction of its organization,
(ii) has all requisite power and authority to carry on its business as now
conducted, and (iii) is duly qualified to do business, and is in good standing,
in each jurisdiction where such qualification is required, except where a
failure to be so qualified could not reasonably be expected to result in a
Material Adverse Effect.

Section 4.2 Organizational Power; Authorization. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is a party are
within such Loan Party’s organizational powers and have been duly authorized by
all necessary organizational, and if required, stockholder or other equity
owner, action. This Agreement has been duly executed and delivered by the
Borrower, and constitutes, and each other Loan Document to which any Loan Party
is a party, when executed and delivered by such Loan Party, will constitute,
valid and binding obligations of the Borrower or such Loan Party (as the case
may be), enforceable against it in accordance with their respective terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity.

Section 4.3 Governmental Approvals; No Conflicts. The execution, delivery and
performance by the Borrower of this Agreement, and by each Loan Party of the
other Loan Documents to which it is a party (a) do not require any consent or
approval of, registration or filing with, or any action by, any Governmental
Authority, except those as have been obtained or made and are in full

 

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force and effect or where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
(b) will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of its Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, material agreement or other material instrument binding on
the Borrower or any of its Subsidiaries or any of its assets (other than the
Prudential Shelf Agreement) or give rise to a right thereunder to require any
payment to be made by the Borrower or any of its Subsidiaries and (d) will not
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries, except Liens (if any) created under the Loan Documents.

Section 4.4 Financial Statements. The Borrower has furnished to each Lender the
audited consolidated balance sheet of the Borrower and its Subsidiaries as of
December 31, 2006 and the related consolidated statements of income,
shareholders’ equity and comprehensive income and cash flows for the fiscal year
then ended reported on by Grant Thornton LLP, independent certified public
accountants. Such financial statements fairly present the consolidated financial
condition of the Borrower and its Subsidiaries as of such date and the
consolidated results of operations for such period in conformity with GAAP
consistently applied. Since December 31, 2006, there have been no changes with
respect to the Borrower and its Subsidiaries which have had or could reasonably
be expected to have, singly or in the aggregate, a Material Adverse Effect.

Section 4.5 Litigation and Environmental Matters.

(a) Schedule 4.5(a) sets forth certain litigation which is pending against
Borrower as of the Closing Date (the “Pending Litigation”). No litigation
(including the Pending Litigation), investigation or proceeding of or before any
arbitrators or Governmental Authorities is pending against or, to the knowledge
of the Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination that could reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect or (ii) which in any manner draws
into question the validity or enforceability of this Loan Agreement or any other
Loan Document.

(b) Except for the matters set forth on Schedule 4.5(b), neither the Borrower
nor any of its Subsidiaries (i) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law that could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect, (ii) has
become subject to any Environmental Liability that could reasonably be expected
to have, either individually or in the aggregate, a Material Adverse Effect,
(iii) has received notice of any claim with respect to any Environmental
Liability that could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect or (iv) knows of any basis for any
Environmental Liability that could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

Section 4.6 Compliance with Laws and Agreements. The Borrower and each
Subsidiary is in compliance with (a) all applicable laws, rules, regulations and
orders of any Governmental Authority, and (b) all indentures, agreements or
other instruments binding upon it or its properties, except where
non-compliance, either singly or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

Section 4.7 Investment Company Act, Etc. Neither the Borrower nor any of its
Subsidiaries is (a) an “investment company”, as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, or
(b) otherwise subject to any other regulatory scheme limiting its ability to
incur debt.

 

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Section 4.8 Taxes. The Borrower and its Subsidiaries and each other Person for
whose taxes the Borrower or any Subsidiary could become liable have timely filed
or caused to be filed all Federal income tax returns and all other material tax
returns that are required to be filed by them, and have paid all taxes shown to
be due and payable on such returns or on any assessments made against it or its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority, except (i) to the extent the failure to
do so would not have a Material Adverse Effect or (ii) where the same are
currently being contested in good faith by appropriate proceedings and for which
the Borrower or such Subsidiary, as the case may be, has set aside on its books
adequate reserves. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of such taxes are adequate, and no tax
liabilities that could be materially in excess of the amount so provided are
anticipated.

Section 4.9 Margin Regulations. The Borrower is not 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) will be margin stock.

Section 4.10 ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.

Section 4.11 Ownership of Property.

(a) Each of the Borrower and its Subsidiaries has good title to, or valid
leasehold interests in, all of its real and personal property material to the
operation of its business.

(b) Each of the Borrower and its Subsidiaries owns, or is licensed, or otherwise
has the right, to use, all patents, trademarks, service marks, trade names,
copyrights and other intellectual property material to its business, and the use
thereof by the Borrower and its Subsidiaries does not infringe on the rights of
any other Person, except for any such infringements that, individually or in the
aggregate, would not have a Material Adverse Effect.

Section 4.12 Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments, and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. No documents, reports
(including without limitation all reports that the Borrower is required to file
with the Securities and Exchange Commission), financial statements, certificates
or other information furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation or
syndication of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by any other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, taken as a whole, in
light of the circumstances under which they were made, not misleading.

Section 4.13 Labor Relations. There are no strikes, lockouts or other material
labor disputes or grievances against the Borrower or any of its Subsidiaries,
or, to the Borrower’s knowledge, threatened against or affecting the Borrower or
any of its

 

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Subsidiaries, and no significant unfair labor practice, charges or grievances
are pending against the Borrower or any of its Subsidiaries, or to the
Borrower’s knowledge, threatened against any of them before any Governmental
Authority. All payments due from the Borrower or any of its Subsidiaries
pursuant to the provisions of any collective bargaining agreement have been paid
or accrued as a liability on the books of the Borrower or any such Subsidiary,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

Section 4.14 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.

Section 4.15 No Default. Neither any Loan Party nor any Subsidiary thereof is in
default under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.

Section 4.16 Solvency. Each of the Loan Parties is Solvent and, in executing the
Loan Documents and consummating the transactions contemplated thereby, none of
the Loan Parties intends to hinder, delay or defraud either present or future
creditors or other Persons to which one or more of the Loan Parties is or will
become indebted.

Section 4.17 Senior Debt. The Obligations constitute senior debt for purposes of
all subordinated debt facilities, if any.

Section 4.18 Principal Places of Business and Subsidiaries. Schedule 4.18 sets
forth the name of, the chief executive office of, the principal place of
business of, the ownership interest of the Borrower in, the jurisdiction of
organization of, and the type of, each Subsidiary, in each case as of the
Closing Date, and the chief executive office and principal place of business of
the Borrower.

Section 4.19 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 (after giving effect to any self-insurance
compatible with the following standards), 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.

ARTICLE V

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that so long as any Lender has a Commitment
hereunder or the principal of and interest on any Loan or any fee or any LC
Disbursement remains unpaid or any Letter of Credit remains outstanding:

Section 5.1 Financial Statements and Other Information. The Borrower will
deliver to the Administrative Agent:

 

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(a) as soon as available and in any event within seventy-five (75) days after
the end of each fiscal year of Borrower, a copy of the annual audited report for
such fiscal year for the Borrower and its Subsidiaries, containing a
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income,
stockholders’ equity and cash flows (together with all footnotes thereto) of the
Borrower and its Subsidiaries for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, all in reasonable
detail and reported on by independent public accountants of nationally
recognized standing (without a “going concern” or like qualification or
exception, and without any qualification or exception not acceptable to Lenders
in their sole discretion) to the effect that such financial statements present
fairly in all material respects the financial condition and the results of
operations of the Borrower and its Subsidiaries for such fiscal year on a
consolidated basis in accordance with GAAP and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards;

(b) as soon as available and in any event within forty (40) days after the end
of each of the first three (3) fiscal quarters of each fiscal year of the
Borrower, an unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal quarter and the related unaudited
consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal quarter and the then elapsed portion of such fiscal
year, setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of Borrower’s previous
fiscal year, all certified by the chief financial officer or treasurer of the
Borrower as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP, subject to normal year-end audit adjustments and
the absence of footnotes;

(c) concurrently with the delivery of the financial statements referred to in
clauses (a) and (b) above, (i) a certificate of a Responsible Officer,
(A) certifying as to whether there exists a Default or Event of Default on the
date of such certificate, and if a Default or an Event of Default then exists,
specifying the details thereof and the action which the Borrower has taken or
proposes to take with respect thereto and (B) stating whether any change in GAAP
or the application thereof has occurred since the date of the Borrower’s audited
financial statements referred to in Section 4.4 and, if any change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate, and (ii) a certificate of a Responsible Officer in the form of
Exhibit 5.1(c) (the “Compliance Certificate”) setting forth in reasonable detail
calculations demonstrating compliance with Article VI;

(d) promptly following any request therefor, copies of all periodic and other
reports, proxy statements and other materials filed with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or all
functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be;
and

(e) promptly following any request therefor, such other information regarding
the results of operations, business affairs and financial condition of the
Borrower or any Subsidiary as the Administrative Agent or any Lender may
reasonably request.

Documents required to be delivered pursuant to Section 5.1(a) or (b) or
Section 5.2(d) (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 in Section 10.1; 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);

 

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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 5.1(c) 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 referred to
above, and in any event shall have no responsibility to monitor compliance by
the Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders and the Issuing Bank materials
and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on
IntraLinks or another similar electronic system (the “Platform”) and (b) certain
of the Lenders (each, a “Public Lender”) may have personnel who do not wish to
receive material non-public information with respect to the Borrower or its
Affiliates, or the respective securities of any of the foregoing, and who may be
engaged in investment and other market-related activities with respect to such
Persons’ securities. 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 Arranger, the Issuing Bank and the Lenders to treat
such Borrower Materials as not containing any material non-public information
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 10.11); (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor”;
and (z) the Administrative Agent and the Arranger shall be entitled to treat any
Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor”.

Section 5.2 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

(a) the occurrence of any Default or Event of Default;

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or, to the knowledge of the
Borrower, affecting the Borrower or any Subsidiary which, if adversely
determined, could reasonably be expected to result in a Material Adverse Effect;

(c) the occurrence of any event or any other development by which the Borrower
or any of its Subsidiaries (i) fails to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any Environmental
Liability, or (iv) becomes aware of any basis for any Environmental Liability
and in each of the preceding clauses (i) through (iv), which individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect;

 

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(d) the occurrence of any ERISA Event that alone, or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$1,000,000;

(e) any change in the fiscal year of the Borrower or any Subsidiary, except to
change the fiscal year of a Subsidiary to conform its fiscal year to that of the
Borrower; and

(f) any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section 5.2 shall be accompanied by a written
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

Section 5.3 Existence; Conduct of Business. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and maintain in full force and effect its legal existence and
its respective rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business
and will continue to engage in the same business as presently conducted or such
other businesses that are reasonably related thereto; provided, that nothing in
this Section 5.3 shall prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 7.3.

Section 5.4 Compliance with Laws, Etc. The Borrower will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and requirements
of any Governmental Authority applicable to its properties, except where the
failure to do so, either individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.

Section 5.5 Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, pay and discharge at or before maturity, all of its
obligations and liabilities (including without limitation all tax liabilities
and claims that could result in a statutory Lien) before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP and (c) the failure to make payment pending such
contest could not reasonably be expected to result in a Material Adverse Effect.

Section 5.6 Books and Records. The Borrower will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in relation to
its business and activities to the extent necessary to prepare the consolidated
financial statements of Borrower in conformity with GAAP.

Section 5.7 Visitation, Inspection, Etc. The Borrower will, and will cause each
of its Subsidiaries to, permit any representative of the Administrative Agent or
any Lender, to visit and inspect its properties, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with any of its officers and with its independent
certified public accountants, all at such reasonable times and as often as the
Administrative Agent or any Lender may reasonably request after reasonable prior
notice to the Borrower.

Section 5.8 Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear except where the failure to do so, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect and (b) maintain with financially sound and reputable insurance
companies, insurance with respect to its properties

 

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and business, and the properties and business of its Subsidiaries, in amounts
and against loss or damage of the kinds customarily insured against by companies
in the same or similar businesses operating in the same or similar locations, in
each instance, reasonably acceptable to the Administrative Agent.

Section 5.9 Use of Proceeds and Letters of Credit. The Borrower will use the
proceeds of all Loans to refinance existing Indebtedness on the Closing Date and
thereafter to finance working capital needs, Capital Expenditures, acquisitions
and for other general corporate purposes of the Borrower and its Subsidiaries.
No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that would violate any rule or regulation of the
Board of Governors of the Federal Reserve System, including Regulations T, U or
X. All Letters of Credit will be used for general corporate purposes.

Section 5.10 Additional Subsidiaries. Except as to any Subsidiary formed by the
Borrower after the Closing Date and having assets with a total value of less
than $500,000, if any additional Subsidiary is acquired or formed by the
Borrower after the Closing Date, the Borrower will, within thirty (30) Business
Days after such Subsidiary is acquired or formed or acquires or maintains assets
with a total value of $500,000 or more, notify the Administrative Agent and the
Lenders thereof and will cause such Subsidiary to become a Subsidiary Loan Party
by executing agreements in the form of Annex I to Exhibit D and Annex I to
Exhibit E in form and substance satisfactory to the Administrative Agent and the
Required Lenders and will cause such Subsidiary to deliver simultaneously
therewith similar documents applicable to such Subsidiary required under
Section 3.1(b)(iv), (v), (vi), (viii), (xi) and (xii) as reasonably requested by
the Administrative Agent.

Section 5.11 Environmental Laws.

(a) The Borrower shall, and shall cause each of its Subsidiaries to, conduct its
operations and keep and maintain its property in compliance in all material
respects with all Environmental Laws, except to the extent that the failure to
comply therewith could not reasonably be expected to have a Material Adverse
Effect.

(b) Upon written request of the Administrative Agent or any Lender, the Borrower
shall submit and cause each of its Subsidiaries to submit, to the Administrative
Agent and such Lender, at the Borrower’s sole cost and expense and at reasonable
intervals, a report providing an update of the status any environmental, health
or safety compliance obligation, remedial obligation or liability, that could,
individually or in the aggregate, result in liability in excess of $5,000,000.

Section 5.12 Gemaire Caribe. If after the Closing Date, Gemaire Caribe
(a) obtains assets, (b) commences business operations, or (c) receives any
Investment from the Borrower or any other Subsidiary, such that if Gemaire
Caribe were a newly formed or acquired Subsidiary it would be required to become
a Subsidiary Loan Party pursuant to Section 5.10, the Borrower will, within
thirty (30) Business Days after the occurrence of any event described in clauses
(a), (b) or (c) above, notify the Administrative Agent and the Lenders thereof
and will cause Gemaire Caribe to become a Subsidiary Loan Party by executing
agreements in the form of Annex I to Exhibit D and Annex I to Exhibit E in form
and substance satisfactory to the Administrative Agent and the Required Lenders
and will cause Gemaire Caribe to deliver simultaneously therewith similar
documents applicable to Gemaire Caribe required under Section 3.1(b)(iv), (v),
(vi), (viii), (xi) and (xii) as reasonably requested by the Administrative
Agent.

 

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ARTICLE VI

FINANCIAL COVENANTS

The Borrower covenants and agrees that so long as any Lender has a Commitment
hereunder or the principal of or interest on or any Loan remains unpaid or any
fee or any LC Disbursement remains unpaid or any Letter of Credit remains
outstanding:

Section 6.1 Leverage Ratio. The Borrower and its Subsidiaries will have, as of
the end of each fiscal quarter of the Borrower, commencing with the fiscal
quarter ended June 30, 2007, a Leverage Ratio of not greater than 3.50:1.00,
calculated on a rolling four-quarter basis.

Section 6.2 Interest Coverage Ratio. The Borrower and it Subsidiaries will have,
as of the end of each fiscal quarter of the Borrower, commencing with the fiscal
quarter ended June 30, 2007, an Interest Coverage Ratio of not less than
3.00:1.00, calculated on a rolling four-quarter basis.

ARTICLE VII

NEGATIVE COVENANTS

The Borrower covenants and agrees that so long as any Lender has a Commitment
hereunder or the principal of or interest on any Loan remains unpaid or any fee
or any LC Disbursement remains unpaid or any Letter of Credit remains
outstanding:

Section 7.1 Indebtedness. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness,
except:

(a) Indebtedness created pursuant to the Loan Documents;

(b) Indebtedness existing on the date hereof and set forth on Schedule 7.1 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof (immediately prior to giving
effect to such extension, renewal or replacement) or shorten the maturity or the
weighted average life thereof;

(c) Indebtedness of the Borrower owing to any Subsidiary Loan Party and of any
Subsidiary Loan Party owing to the Borrower or any other Subsidiary Loan Party;

(d) Private Placement Debt or other Indebtedness incurred after the date hereof
in an aggregate principal amount not to exceed $200,000,000 at any time
outstanding; provided, however, that no Indebtedness may be incurred under the
Prudential Shelf Agreement until such agreement has been amended to the
Administrative Agent’s satisfaction to eliminate any negative covenants in
conflict with or more restrictive than those contained herein;

(e) Indebtedness in respect of obligations under Hedging Agreements permitted by
Section 7.10; and

(f) Indebtedness in respect of any Securitization Transaction permitted by
Section 7.6(c).

 

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Section 7.2 Negative Pledge. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien on any of
its assets or property now owned or hereafter acquired, except:

(a) Liens, if any, created in favor of the Administrative Agent for the benefit
of the Lenders pursuant to the Loan Documents;

(b) Permitted Encumbrances;

(c) any Liens on any property or asset of the Borrower or any Subsidiary
existing on the Closing Date set forth on Schedule 7.2; provided, that such Lien
shall not apply to any other property or asset of the Borrower or any
Subsidiary;

(d) purchase money Liens upon or in any fixed or capital assets to secure the
purchase price or the cost of construction or improvement of such fixed or
capital assets or to secure Indebtedness incurred solely for the purpose of
financing the acquisition, construction or improvement of such fixed or capital
assets (including Liens securing any Capital Lease Obligations); provided, that
(i) the principal amount of the Indebtedness secured by such Liens does not
exceed $20,000,000 in the aggregate at any time outstanding, (ii) such Liens
attach to such assets concurrently or within ninety (90) days after the
acquisition, improvement or completion of the construction thereof; (iii) such
Liens do not extend to any other assets; and (iv) the Indebtedness secured
thereby does not exceed the cost of acquiring, constructing or improving such
fixed or capital assets;

(e) any Lien (i) existing on any asset of any Person at the time such Person
becomes a Subsidiary of the Borrower, (ii) existing on any asset of any Person
at the time such Person is merged with or into the Borrower or any Subsidiary of
the Borrower or (iii) existing on any asset prior to the acquisition thereof by
the Borrower or any Subsidiary of the Borrower; provided, that any such Lien was
not created in the contemplation of any of the foregoing and any such Lien
secures only those obligations which it secures on the date that such Person
becomes a Subsidiary or the date of such merger or the date of such acquisition;

(f) any Lien arising out of any Securitization Transaction permitted by
Section 7.6(c);

(g) extensions, renewals, or replacements of any Lien referred to in paragraphs
(a) through (f) of this Section 7.2; provided, that the principal amount of the
Indebtedness secured thereby is not increased and that any such extension,
renewal or replacement is limited to the assets originally encumbered thereby;
and

(h) other Liens arising in the ordinary course of business of the Borrower or
any Subsidiary of the Borrower, as applicable; provided, that the principal
amount of the Indebtedness secured by such Liens shall not exceed $20,000,000 in
the aggregate at any time outstanding.

For purposes of this Section, the entry by the Borrower or any of its
Subsidiaries into a true lease or true bailment arrangement which contains a
provision purporting to grant a lien in the event that such arrangement is
determined not to constitute a true lease or true bailment and the filing of a
precautionary UCC financing statement in connection therewith shall not
constitute the creation, incurrence, assumption or sufference of a Lien unless,
under applicable law, such arrangement is determined not to constitute a true
lease or true bailment arrangement and a security interest or other interest in
or lien on property or assets of the Borrower or its Subsidiaries has in fact
been granted or deemed to have been granted.

 

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Section 7.3 Fundamental Changes.

(a) The Borrower will not, and will not permit any Subsidiary to, merge into or
consolidate into any other Person, or permit any other Person to merge into or
consolidate with it, or sell, lease, transfer or otherwise dispose of (in a
single transaction or a series of transactions) all or substantially all of its
assets (in each case, whether now owned or hereafter acquired) or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired) or liquidate or dissolve; provided, that if at
the time thereof and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing (i) the Borrower or any
Subsidiary may merge with a Person if the Borrower (or such Subsidiary if the
Borrower is not a party to such merger) is the surviving Person (provided that
in the case of an Acquisition permitted by Section 7.4 by a Subsidiary Loan
Party, the acquired company may be the surviving Person so long as such acquired
company becomes a Subsidiary Loan Party as required by Section 5.10), (ii) any
Subsidiary may merge into another Subsidiary; provided, that (A) if any party to
such merger is a Subsidiary Loan Party, the Subsidiary Loan Party shall be the
surviving Person (and if the non-surviving Subsidiary was also a Subsidiary Loan
Party, the Administrative Agent, upon such event and at the request and expense
of the Borrower and/or the surviving Subsidiary Loan Party, will execute such
documents as shall be acceptable to the Administrative Agent and its counsel
releasing the non-surviving Subsidiary Loan Party from its obligations under the
Subsidiary Guarantee Agreement) or (B) if any party to such merger is not a
Subsidiary Loan Party, the surviving Person shall execute and deliver to the
Administrative Agent an agreement guaranteeing payment of the Obligations in
form and substance satisfactory to the Administrative Agent and the Required
Lenders, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of
all or substantially all of its assets to the Borrower or to a Subsidiary Loan
Party, and (iv) any Subsidiary (other than a Subsidiary Loan Party) may
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; provided, that any such merger
involving a Person that is not a wholly-owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 7.4.

(b) The Borrower will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Borrower and its Subsidiaries on the date hereof and businesses
reasonably related thereto.

Section 7.4 Investments, Loans, Capital Expenditures, Etc.

(a) The Borrower will not, and will not permit any of its Subsidiaries to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a wholly-owned Subsidiary prior to such merger), any common stock,
evidence of indebtedness or other securities (including any option, warrant, or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person (all of the foregoing
being collectively called “Investments”), or purchase or otherwise acquire (in
one transaction or a series of transactions) any assets of any other Person that
constitute a business unit, except:

(i) Investments (other than Permitted Investments) existing on the date hereof
and set forth on Schedule 7.4 (including Investments in Subsidiaries);

(ii) Permitted Investments;

(iii) Guarantees constituting Indebtedness permitted by Section 7.1;

 

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(iv) Investments in Subsidiary Loan Parties and in repurchases of the capital
stock of the Borrower to the extent otherwise permitted hereunder;

(v) Loans or advances to employees, officers or directors of the Borrower or any
Subsidiary in the ordinary course of business for travel, relocation and related
expenses;

(vi) Hedging Agreements permitted by Section 7.10;

(vii) the purchase or other acquisition of a controlling equity interest in
another Person (including the purchase of an option, warrant, convertible or
similar type security to acquire such a controlling interest at the time it
becomes exercisable by the holder thereof), whether by purchase of such equity
interest or upon exercise of an option or warrant for, or conversions of
securities into, such equity interest, or the purchase or other acquisition (in
one transaction or a series of transactions) of any assets of any other Person
that constitute a business unit (each, an “Acquisition”), provided, that:
(i) the Person to be (or whose assets are to be) so purchased or acquired does
not oppose such Acquisition, (ii) the line or lines of business of the Person to
be (or whose assets are to be) so purchased or acquired are substantially the
same as the Major Subsidiaries and their lines of business, (iii) prior to and
immediately after giving effect to such Acquisition, no Default or Event of
Default shall have occurred and be continuing, (iv) if the costs of such
Acquisition exceed $50,000,000, the Borrower shall have furnished to the
Administrative Agent pro forma historical financial statements as of the end of
the most recently completed fiscal period of the Borrower (whether quarterly or
year end) giving effect to such Acquisition and assuming that any Indebtedness
incurred to effect such Acquisition shall be deemed to have been outstanding
during the four full consecutive fiscal quarter period of the Borrower preceding
such Acquisition and to have borne a rate of interest during such period equal
to that rate in existence at the date of determination, together with a
certificate of a Responsible Officer, in the form of Exhibit 5.1(c), prepared on
a historical pro forma basis giving effect to such Acquisition as of the most
recent fiscal quarter of the Borrower then ended, which certificate shall
demonstrate that no Default or Event of Default would exist immediately after
giving effect thereto, and (vi) the Person acquired shall be a Subsidiary, or be
merged into or with the Borrower or one of its Subsidiaries, immediately upon
consummation of the Acquisition (or if assets are being purchased or acquired,
the acquirer shall be the Borrower or one of its Subsidiaries);

(viii) Investments of any Person acquired in an Acquisition permitted under
Section 7.4(a)(viii); and

(ix) additional Investments in other Persons, provided, that (i) the aggregate
costs incurred in making such Investments (reduced by cash dividends or other
cash payments received on or in consideration of such Investments) shall not
exceed $100,000,000 in the aggregate at any time and (ii) prior to and
immediately after giving effect to such Investment, no Default or Event of
Default shall have occurred and be continuing.

(b) The Borrower will not, and will not permit any of its Subsidiaries to, make
Capital Expenditures in the aggregate in excess of $60,000,000 during any fiscal
year of the Borrower.

 

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Section 7.5 Restricted Payments. The Borrower will not, and will not permit its
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any dividend on any class of its stock, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, retirement, defeasance or other acquisition of, any shares
of common stock or Indebtedness subordinated to the Obligations of the Borrower
or any options, warrants, or other rights to purchase such common stock or such
Indebtedness, whether now or hereafter outstanding (each, a “Restricted
Payment”), except:

(a) the Borrower and its Subsidiaries may make Restricted Payments, if (i) both
before and after giving effect to such Restricted Payment no Default shall have
occurred or be continuing and (ii) after giving pro forma effect to such
Restricted Payment, the Borrower’s Leverage Ratio is less than 2.00 to 1.00;

(b) if after giving pro forma effect to a Restricted Payment, the Borrower’s
Leverage Ratio is greater than or equal to 2.00 to 1.00, the Borrower and its
Subsidiaries may make the following Restricted Payments: (1) dividends payable
by the Borrower solely in shares of any class of its common stock,
(2) Restricted Payments made by any Subsidiary to the Borrower or to another
Subsidiary Loan Party, (3) dividends paid by any Subsidiary to Borrower or to
another Subsidiary that is its direct parent and (4) cash dividends paid on, and
cash redemptions of, the common stock of the Borrower provided, that (i) no
Default or Event of Default has occurred and is continuing at the time such
dividend is paid or redemption is made, and (ii) the aggregate amount of all
such Restricted Payments does not exceed the sum of (A) $100,000,000 plus
(B) fifty percent (50%) of Consolidated Net Income (if greater than $0) earned
year to date as of the most recently ended fiscal quarter (except that in the
case of the third and fourth fiscal quarters of 2007, such calculation of
Consolidated Net Income shall run from July 1, 2007 rather than the prior year
end), and further, provided, if such Restricted Payments in any fiscal year are
less than hereby permitted for such fiscal year, the excess permitted amount for
such fiscal year may be carried forward to any succeeding fiscal period.

Section 7.6 Sale of Assets. The Borrower will not, and will not permit any of
its Subsidiaries to, convey, sell, lease, assign, transfer or otherwise dispose
of, any of its assets, business or property, whether now owned or hereafter
acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary’s common stock to any Person other than the Borrower or a Subsidiary
Loan Party (or to qualify directors if required by applicable law), except:

(a) the sale or other disposition for fair market value of obsolete or worn out
property or other property not necessary for the principal business operations
disposed of in the ordinary course of business;

(b) the sale of inventory and Permitted Investments in the ordinary course of
business;

(c) the sale or other disposition of such assets in connection with any
Securitization Transaction in an aggregate amount not to exceed $100,000,000 at
any time during the term of this Agreement;

(d) [Reserved];

(e) the sale, without recourse, other than for misrepresentation, by any
Subsidiary of the Borrower of accounts receivable having a value, net of all
allowances and discounts, not to exceed during any fiscal year of the Borrower
an aggregate Dollar value of $25,000,000 for all such sales, which receivables
shall be payable by Persons who are not United States citizens or organized and
existing under the laws of the United States or a state or territory thereof;
and

 

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(f) the sale or other disposition of such assets in an aggregate amount not to
exceed $50,000,000 in any fiscal year of the Borrower.

Section 7.7 Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Borrower and Subsidiary Loan Parties not
involving any other Affiliates, and (c) any Restricted Payment permitted by
Section 7.5.

Section 7.8 Restrictive Agreements. The Borrower will not, and will not permit
any Subsidiary to, directly or indirectly, enter into, incur or permit to exist
any agreement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Subsidiary to create, incur or permit any Lien
upon any of its assets or properties, whether now owned or hereafter acquired,
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to its common stock, to make or repay loans or advances to the
Borrower or any other Subsidiary, to Guarantee Indebtedness of the Borrower or
any other Subsidiary or to transfer any of its property or assets to the
Borrower or any Subsidiary of the Borrower; provided, that (i) the foregoing
shall not apply to restrictions or conditions imposed (A) by law, (B) by this
Agreement or any other Loan Document, (C) by the documents governing the Private
Placement Debt, (D) by documents listed on Schedule 7.8 hereto or (E) by any
documents creating a Permitted Lien, (ii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is sold and such sale is permitted
hereunder, (iii) clause (a) shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions and conditions apply only to the property or
assets securing such Indebtedness, and (iv) clause (a) shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.

Section 7.9 Sale and Leaseback Transactions. The Borrower will not, and will not
permit any of the Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred, except for the sale and leaseback of properties in an aggregate
amount not to exceed $30,000,000 in any fiscal year of the Borrower.

Section 7.10 Hedging Agreements. The Borrower will not, and will not permit any
of the Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements which are non-speculative in purpose and nature and are entered into
in the ordinary course of business to hedge or mitigate risks to which the
Borrower or any Subsidiary is exposed in the conduct of its business or the
management of its liabilities. Solely for the avoidance of doubt, the Borrower
acknowledges that a Hedging Agreement entered into for speculative purposes or
of a speculative nature (which shall be deemed to include any Hedging Agreement
under which the Borrower or any of the Subsidiaries is or may become obliged to
make any payment (i) in connection with the purchase by any third party of any
common stock or any Indebtedness or (ii) as a result of changes in the market
value of any common stock or any Indebtedness) is not a Hedging Agreement
entered into in the ordinary course of business to hedge or mitigate risks.

 

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Section 7.11 Amendment to Material Documents. The Borrower will not, and will
not permit any Subsidiary to, amend, modify or waive any of its rights under
(a) its certificate of incorporation, bylaws or other organizational documents
in a manner materially adverse to the Lenders or (b) any Material Agreement in a
manner that results in, or could reasonably be expected to result in, a Material
Adverse Effect.

Section 7.12 Accounting Changes. The Borrower will not, and will not permit any
Subsidiary to, make any significant change in accounting treatment or reporting
practices, except as required or, with the approval of the Required Lenders, as
permitted, by GAAP, or change the fiscal year of the Borrower or any Subsidiary,
except to change the fiscal year of a Subsidiary to conform its fiscal year to
that of the Borrower.

Section 7.13 [Reserved].

Section 7.14 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, other than
the purchase of the capital stock of ACR Group, Inc. pursuant to the Borrower’s
tender offer made on July 9, 2007.

Section 7.15 Prepayments. Except in connection with payment of the Obligations
in accordance with the Loan Documents, make any prepayment, redemption,
defeasance, purchase, acquisition or other payment in violation of any
subordination terms of any Indebtedness which is subject to an intercreditor
and/or subordination agreement.

Section 7.16 Amendments to Material Indebtedness Agreements. Enter into or
suffer to exist any amendment or modification (a) to the amortization schedule
or prepayment provisions (excluding the waiver of any prepayment premium or
penalty) of the Indebtedness created under the Material Indebtedness Agreements
or (b) to any other terms or conditions contained in the Material Indebtedness
Agreements if such modification (i) would conflict with or be more restrictive
than the terms or provisions of this Agreement in any material respect,
(ii) would provide for collateral security for such Indebtedness in excess of
that provided under such agreements as of the Closing Date, (iii) would expand
any negative pledge provision provided for therein, or (iv) would alter any
provision of the events of default under those agreements.

ARTICLE VIII

EVENTS OF DEFAULT

Section 8.1 Events of Default. If any of the following events (each an “Event of
Default”) shall occur:

(a) the Borrower shall fail to pay any principal of any Loan or of any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment or otherwise; or

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount payable under clause (a) of this Article
VIII) payable under this Agreement or any other Loan Document, when and as the
same shall become due and payable, and such failure shall continue unremedied
for a period of three (3) Business Days; or

 

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(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any Subsidiary in or in connection with this Agreement or any other
Loan Document (including the Schedules attached thereto) and any amendments or
modifications hereof or waivers hereunder, or in any certificate, report,
financial statement or other document submitted to the Administrative Agent or
the Lenders by any Loan Party or any representative of any Loan Party pursuant
to or in connection with this Agreement or any other Loan Document shall prove
to be incorrect in any material respect when made or deemed made or submitted;
or

(d) the Borrower shall fail to observe or perform any covenant or agreement
contained in Sections 5.1(a), (b), (c), (d), and (e), 5.2, 5.3 (with respect to
the Borrower’s legal existence unless, in the case of any involuntary
administrative dissolution of the Borrower, such failure to preserve, renew or
maintain its legal existence is remedied within ten (10) days after the earlier
of (i) any Responsible Officer of the Borrower becomes aware of such failure, or
(ii) notice thereof shall have been given to the Borrower by the Administrative
Agent or any Lender, provided, that until the Borrower’s legal existence is
lawfully reinstated by the appropriate Governmental Authority, the Lenders or
the Issuing Bank, as applicable, may withhold any further Borrowing or issuance
of any additional Letter of Credit), 5.7, 5.9, 5.10, 5.11 or Articles VI or VII;
or

(e) any Loan Party shall fail to observe or perform any covenant or agreement
contained in this Agreement (other than those referred to in clauses (a),
(b) and (d) above), and such failure shall remain unremedied for thirty
(30) days after the earlier of (i) any Responsible Officer of the Borrower
becomes aware of such failure, or (ii) notice thereof shall have been given to
the Borrower by the Administrative Agent or any Lender;

(f) the Borrower or any of its Subsidiaries shall default in the performance or
observance of any term, condition or provision of any Material Agreement that
results in, or could reasonably be expected to result in, a Material Adverse
Effect; or

(g) the Borrower or any Subsidiary (whether as primary obligor or as guarantor
or other surety) shall fail to pay any principal of or premium or interest on
any Material Indebtedness that is outstanding, when and as the same shall become
due and payable (whether at scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
evidencing such Indebtedness; or any other event shall occur or condition shall
exist under any agreement or instrument relating to such Indebtedness and shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such event or condition is to accelerate, or
permit the acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall be declared to be due and payable, required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or any offer to prepay, redeem, purchase or
defease such Indebtedness shall be required to be made, in each case prior to
the stated maturity thereof; or

(h) the Borrower or any Subsidiary shall (i) commence a voluntary case or other
proceeding or file any petition seeking liquidation, reorganization or other
relief under any federal, state or foreign bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
custodian, trustee, receiver, liquidator or other similar official of it or any
substantial part of its property, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (i) of this Section 8.1(h), (iii) apply for or consent to the
appointment of a custodian, trustee, receiver, liquidator or other similar
official for the Borrower or any such Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, or (vi) take any action for the purpose of effecting any
of the foregoing; or

 

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(i) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary or its debts, or any substantial part
of its assets, under any federal, state or foreign bankruptcy, insolvency or
other similar law now or hereafter in effect or (ii) the appointment of a
custodian, trustee, receiver, liquidator or other similar official for the
Borrower or any Subsidiary or for a substantial part of its assets, and in any
such case, such proceeding or petition shall remain undismissed for a period of
sixty (60) days or an order or decree approving or ordering any of the foregoing
shall be entered; or

(j) the Borrower or any Subsidiary shall become unable to pay, shall admit in
writing its inability to pay, or shall fail to pay, its debts as they become
due; or

(k) an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with other ERISA Events that have occurred, could
reasonably be expected to result in liability to the Borrower and the
Subsidiaries in an aggregate amount exceeding $1,000,000; or

(l) any judgment or order for the payment of money where the amount not covered
by insurance exceeds $5,000,000 individually or in the aggregate shall be
rendered against the Borrower or any Subsidiary, and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be a period of thirty (30) consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or

(m) any non-monetary judgment or order shall be rendered against the Borrower or
any Subsidiary that could reasonably be expected to have a Material Adverse
Effect, and there shall be a period of thirty (30) consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending appeal
or otherwise, shall not be in effect; or

(n) a Change in Control shall occur or exist; or

(o) any provision of any Subsidiary Guarantee Agreement shall for any reason
cease to be valid and binding on, or enforceable against, any Subsidiary Loan
Party, or any Subsidiary Loan Party shall so state in writing, or any Subsidiary
Loan Party shall seek to terminate its Subsidiary Guarantee Agreement; or

(p) any provision of any other 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 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

(q) an event of default shall have occurred under any other Loan Document;

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section 8.1) and at any time thereafter
during the continuance of such event, the Administrative Agent may, and upon the
written request of the Required Lenders shall, by notice to the Borrower, take
any or all of the following actions, at the same or different times:
(i) terminate the Commitments, whereupon the Commitment of each Lender shall
terminate immediately; (ii) declare the principal of and any accrued interest on
the Loans, and all other Obligations (except obligations in respect of any
interest rate Hedging Agreement to which a Lender is a counterparty and such
Lender has requested otherwise in writing to the Administrative Agent) owing
hereunder, to be, whereupon the same shall become, due and payable immediately,
without presentment, demand, protest or other notice of any kind,

 

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all of which are hereby waived by the Borrower and (iii) exercise all remedies
contained in any other Loan Document; and that, if an Event of Default specified
in either clause (h) or (i) shall occur, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon, and all fees, and all other Obligations shall automatically
become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower.

ARTICLE IX

THE ADMINISTRATIVE AGENT

Section 9.1 Appointment and Authority. Each of the Lenders and the Issuing Bank
hereby irrevocably appoints Bank of America 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 and the Issuing Bank, and the Borrower shall
not have rights as a third party beneficiary of any of such provisions.

Section 9.2 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.

Section 9.3 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
and the Issuing Bank acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the Issuing Bank also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

Section 9.4 Exculpatory Provisions. Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing;

(b) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that the Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and

 

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(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 10.2 and 8.1) 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 the Borrower, a
Lender or the Issuing 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 III or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

Section 9.5 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 the Issuing Bank, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Bank unless the Administrative Agent shall have received
notice to the contrary from such Lender or the Issuing 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 the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

Section 9.6 The Administrative Agent in its Individual Capacity. 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.

 

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Section 9.7 Resignation of Administrative Agent. Administrative Agent may at any
time give notice of its resignation to the Lenders, the Issuing Bank and the
Borrower. 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 and the Issuing Bank, appoint a successor Administrative Agent meeting
the qualifications set forth above; provided that if the Administrative Agent
shall notify the Borrower 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 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 and the Issuing 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 10.3 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 Bank of America as Administrative Agent pursuant to this
Section shall also constitute its resignation as Issuing Bank and Swingline
Lender. Upon the acceptance of a successor’s appointment as Administrative Agent
hereunder, (a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring Issuing Bank and Swingline
Lender, (b) the retiring Issuing Bank and Swingline Lender shall be discharged
from all of their respective duties and obligations hereunder or under the other
Loan Documents, and (c) the successor Issuing Bank 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 Issuing
Bank to effectively assume the obligations of the retiring Issuing Bank with
respect to such Letters of Credit.

Section 9.8 No Other Duties, etc. Anything herein to the contrary
notwithstanding, the Sole Book Manager, Sole Lead Arranger or [other titles as
necessary] 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 the Administrative Agent, a Lender or the
Issuing Bank hereunder.

ARTICLE X

MISCELLANEOUS

Section 10.1 Notices; Electronic Communications.

(a) Except in the case of notices and other communications expressly permitted
to be given by telephone, all notices and other communications to any party
herein to be effective shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

 

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To the Borrower:    Watsco, Inc.    2665 South Bayshore Drive, Suite 901   
Coconut Grove, Florida 33133    Attention: Ana M. Menendez   

        Chief Financial Officer

   Facsimile: (305) 858-6898    Website: www.watsco.com With a copy to:    Moore
& Van Allen PLLC    100 North Tryon Street, Suite 4700    Charlotte, North
Carolina 28202    Attention: Stephen Hope, Esquire    Facsimile: (704) 378-2036

 

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To the Administrative Agent or the Swingline Bank:    Bank of America, N.A.   
100 N. Tryon Street    Mail Code: NC1-001-04-39    Charlotte, North Carolina
28255    Attention: Sabrina D. Miles    Telephone: (704) 388-1043    Facsimile:
(704) 719-8762    Email: sabrina.d.miles@bankofamerica.com
With a copy in each case to:    Bank of America, N.A.    Agency Management   
100 Federal Street    Mail Code: MA5-100-12-02    Boston, Massachusetts 02110   
Attention: Tamisha Eason    Telephone: (617) 434-9205    Facsimile: (617)
790-1284    Email: tamisha.eason@bankofamerica.com To the Issuing Bank:    Bank
of America, N.A.    Trade Operations    1 Fleet Way    Mail Code: PA6-580-02-30
   Scranton, Pennsylvania    Attention: Alfonso Malave    Telephone: (570)
330-4212    Facsimile: (570) 330-4186    Email: alfonso.malave@bankofamerica.com
To any other Lender:    the address set forth in the Administrative
Questionnaire

Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All such notices
and other communications shall, when transmitted by overnight delivery, or
faxed, be effective when delivered for overnight (next-day) delivery, or
transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the fifth Business Day after the date deposited into the mails or if
delivered, upon delivery; provided, that notices delivered to the Administrative
Agent, the Issuing Bank or the Swingline Bank shall not be effective until
actually received by such Person at its address specified in this Section 10.1.

(b) Any agreement of the Administrative Agent and the Lenders herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Borrower. The Administrative Agent and the Lenders shall be
entitled to rely on the authority of any Person purporting to be a Person
authorized by the Borrower to give such notice and the Administrative Agent and
Lenders shall not have any liability to the Borrower or other Person on account
of any action taken or not taken by the Administrative Agent or the Lenders in
reliance upon such telephonic or facsimile notice. The obligation of the
Borrower to repay the Loans and all other Obligations hereunder shall not be
affected in any way or to any extent by any failure of the Administrative Agent
and the Lenders to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Administrative Agent and the Lenders of a
confirmation which is at variance with the terms understood by the
Administrative Agent and the Lenders to be contained in any such telephonic or
facsimile notice.

 

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(c) Electronic Communications. Notices and other communications to the Lenders
and the Issuing Bank 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 Issuing Bank pursuant to Article
II if such Lender or the Issuing Bank, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.

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

(d) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrower, any Lender, the Issuing
Bank or any other Person for losses, claims, damages, liabilities or expenses of
any kind (whether in tort, contract or otherwise) arising out of the Borrower’s
or the Administrative Agent’s transmission of Borrower Materials through the
Internet, except to the extent that such losses, claims, damages, liabilities or
expenses are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Agent Party; provided, however, that in no event shall any
Agent Party have any liability to the Borrower, any Lender, the Issuing Bank or
any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

Section 10.2 Waiver; Amendments.

(a) No failure or delay by the Administrative Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or any other Loan Document,
and no course of dealing between the Borrower and the Administrative Agent or
any Lender, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power hereunder or thereunder. The
rights and remedies of the Administrative Agent, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies provided by law. No waiver of

 

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any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section 10.2, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan or the issuance of a Letter of Credit shall not be construed as
a waiver of any Default or Event of Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default or Event of Default at the time.

No amendment or waiver of any provision of this Agreement or the other Loan
Documents, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Borrower and the Required Lenders or the Borrower and the Administrative Agent
with the consent of the Required Lenders (and, if the Administrative Agent
executes and delivers any such amendment, waiver or consent which states that it
is being provided by the Administrative Agent in its capacity as such with the
consent of the Required Lenders, the Borrower shall be entitled to rely thereon)
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, that no amendment or
waiver shall: (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the date fixed for any payment of any principal of, or interest
on, any Loan or LC Disbursement or interest thereon or any fees hereunder or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date for the termination or reduction of any Commitment, without the
written consent of each Lender affected thereby, (iv) change Section 2.20(b) or
(c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section 10.2 or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders which are
required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the consent of each
Lender; (vi) release any guarantor or limit the liability of any such guarantor
under any guaranty agreement; (vii) release all or substantially all of the
collateral (if any) securing any of the Obligations; (viii) waive any condition
set forth in Section 3.2(a); provided further, that no such agreement shall
amend, modify or otherwise affect the rights, duties or obligations of the
Administrative Agent, the Swingline Bank or the Issuing Bank without the prior
written consent of such Person.

Section 10.3 Expenses; Indemnification.

(a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses
of the Administrative Agent and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent and its
Affiliates, in connection with the syndication of the credit facilities provided
for herein, the preparation and administration of the Loan Documents and any
amendments, modifications or waivers thereof (whether or not the transactions
contemplated in this Agreement or any other Loan Document shall be consummated),
(ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all out-of-pocket costs
and expenses (including, without limitation, the reasonable fees, charges and
disbursements of outside counsel and the allocated cost of inside counsel)
incurred by the Administrative Agent, the Issuing Bank or any Lender in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section 10.3, or in connection
with the Loans made or any 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.

 

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(b) The Borrower shall indemnify the Administrative Agent, the Issuing Bank and
each Lender, and each Related Party of any of the foregoing (each, an
“Indemnitee”) against, and hold each of them harmless from, any and all costs,
losses, liabilities, claims, damages and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, which may be
incurred by or asserted against any Indemnitee arising out of, in connection
with or as a result of (i) the execution or delivery of this Agreement or any
other agreement or instrument contemplated hereby, the performance by the
parties hereto of their respective obligations hereunder or the consummation of
any of the transactions contemplated hereby, (ii) any Loan or Letter of Credit
or any actual or proposed use of the proceeds therefrom (including any refusal
by the Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned by the Borrower
or any Subsidiary or any Environmental Liability related in any way to the
Borrower or any Subsidiary, (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto or (v) any civil penalty or fine assessed by OFAC against any
Lender, the Issuing Bank or the Administrative Agent and all reasonable costs
and expenses (including counsel fees and disbursements) incurred in connection
with defense thereof, as a result of the funding of Loans, the issuance of
Letters of Credit, or the acceptance of payments under the Loan Documents;
provided, that the Borrower shall not be obligated to indemnify any Indemnitee
for any of the foregoing arising out of such Indemnitee’s gross negligence or
willful misconduct as determined by a court of competent jurisdiction in a final
and nonappealable judgment.

(c) The Borrower shall pay, and hold the Administrative Agent and each of the
Lenders harmless from and against, any and all present and future stamp,
documentary, and other similar taxes with respect to this Agreement and any
other Loan Documents, any collateral described therein, or any payments due
thereunder, and save the Administrative Agent and each Lender harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission to pay such taxes.

(d) To the extent that the Borrower fails to pay any amount required to be paid
to the Administrative Agent, the Issuing Bank or the Swingline Lender under
clauses (a), (b) or (c) hereof, each Lender severally agrees to pay to the
Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may
be, such Lender’s Pro Rata Share (determined as of the time that the
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided, that the unreimbursed expense or indemnified payment, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Issuing Bank or the Swingline Lender in
its capacity as such.

(e) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to actual
or direct damages) arising out of, in connection with or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the transactions
contemplated therein, any Loan or any Letter of Credit or the use of proceeds
thereof. No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any information or
other materials distributed to such unintended recipients by such Indemnitee
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence of willful misconduct of such
Indemnitee as determined by a final and nonappealable judgment of a court of
competent jurisdiction.

 

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(f) All amounts due under this Section 10.3 shall be payable promptly after
written demand therefor.

(g) The agreements in this Section shall survive the resignation of the
Administrative Agent, the Issuing Bank and the Swingline Lender, the replacement
of any Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.

Section 10.4 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Borrower nor
any other 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 Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in LC Exposure and in Swingline
Loans) at the time owing to it); provided that any such assignment shall be
subject to the following conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

(B) in any case not described in subsection (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the 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); provided, however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an Assignee Group to a
single Eligible Assignee (or to an Eligible Assignee and members of its Assignee
Group) will be treated as a single assignment for purposes of determining
whether such minimum amount has been met.

 

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(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, except that this clause (ii) shall not apply to the Swingline Lender’s
rights and obligations in respect of Swingline Loans.

(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 (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) 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 if such assignment is to be a Person that
is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to
such Lender;

(C) the consent of the Issuing Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding); and

(D) the consent of the Swingline Lender (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee in the amount of $3,500; provided, however,
that the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

(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 2.17, 2.18, 2.19, and 10.3 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. 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.

 

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(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and LC Exposure owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any 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
participations in LC Exposure and/or Swingline Loans) owing to it); provided
that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Borrower, the Administrative
Agent, the Lenders and the Issuing Bank 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, waiver or other modification described in the first proviso to
Section 10.2 that affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.17, 2.18 and 2.19 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.7 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.20 as though it were a
Lender.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 2.17 or 2.19 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.19 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.19(e) as though it were a Lender.

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of

 

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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 Issuing Bank or Swingline Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Commitment and Loans pursuant to subsection
(b) above, Bank of America may, (i) upon 30 days’ notice to the Borrower and the
Lenders, resign as Issuing Bank and/or (ii) upon 30 days’ notice to the
Borrower, resign as Swingline Lender. In the event of any such resignation as
Issuing Bank or Swingline Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor Issuing Bank or Swingline Lender hereunder;
provided, however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as Issuing Bank or Swingline
Lender, as the case may be. If Bank of America resigns as Issuing Bank, it shall
retain all the rights, powers, privileges and duties of the Issuing Bank
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as Issuing Bank and all LC Exposure with respect
thereto. If Bank of America resigns as Swingline Lender, it shall retain all the
rights of the Swingline Lender provided for hereunder with respect to Swingline
Loans made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swingline Loans pursuant to Section 2.5. Upon the
appointment of a successor Issuing Bank and/or Swingline Lender, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring Issuing Bank or Swingline Lender, as the
case may be, and (b) the successor Issuing Bank shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
successor or make other arrangements satisfactory to Bank of America to
effectively assume the obligations of Bank of America with respect to such
Letters of Credit.

Section 10.5 Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and the other Loan Documents shall be construed in accordance
with and be governed by the law (without giving effect to the conflict of law
principles thereof) of the State of North Carolina.

(b) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the non-exclusive jurisdiction of the United States District
Court of the Western District of North Carolina, and of any state court of the
State of North Carolina sitting in Mecklenburg County 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 the transactions contemplated hereby or
thereby, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
North Carolina state court or, to the extent permitted by applicable law, 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 any other Loan Document shall affect any right that
the Administrative Agent, the Issuing Bank or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against the Borrower or its properties in the courts of any
jurisdiction.

(c) The Borrower irrevocably and unconditionally waives any objection which it
may now or hereafter have to the laying of venue of any such suit, action or
proceeding described in paragraph (b) of this Section 10.5 and brought in any
court referred to in paragraph (b) of this Section 10.5. Each of the parties
hereto 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) Each party to this Agreement irrevocably consents to the service of process
in the manner provided for notices in Section 10.1. Nothing in this Agreement or
in any other Loan Document will affect the right of any party hereto to serve
process in any other manner permitted by law.

Section 10.6 Waiver of Jury Trial. EACH PARTY HERETO 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 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 PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.6.

Section 10.7 Right of Setoff. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, each
Lender and the Issuing Bank shall have the right, at any time or from time to
time upon the occurrence and during the continuance of an Event of Default,
without prior notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by applicable law, to set off and apply
against all deposits (general or special, time or demand, provisional or final)
of the Borrower at any time held or other obligations at any time owing by such
Lender and the Issuing Bank to or for the credit or the account of the Borrower
against any and all Obligations held by such Lender or the Issuing Bank, as the
case may be, irrespective of whether such Lender or the Issuing Bank shall have
made demand hereunder and although such Obligations may be unmatured. Each
Lender and the Issuing Bank agree promptly to notify the Administrative Agent
and the Borrower after any such set-off and any application made by such Lender
and the Issuing Bank, as the case may be; provided, that the failure to give
such notice shall not affect the validity of such set-off and application.

Section 10.8 Counterparts; Effectiveness of Agreement; Integration. This
Agreement may be executed by one or more of the parties to this Agreement in any
number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Notwithstanding execution of this Agreement by the Borrower and each
of the Lenders party hereto and satisfaction (or waiver) of each of the
conditions set forth in Section 3.1, this Agreement shall not be or become
effective and binding upon the parties until executed and accepted by the
Administrative Agent in its capacity as such on behalf of the Lenders. This
Agreement, the other Loan Documents, and any separate letter agreement(s)
relating to any fees payable to the Administrative Agent constitute the entire
agreement among the parties hereto and thereto regarding the subject matters
hereof and thereof and supersede all prior agreements and understandings, oral
or written, regarding such subject matters.

Section 10.9 Survival. All covenants, agreements, representations and warranties
made by the Borrower herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding

 

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that the Administrative Agent, the Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
or any Letter of Credit is outstanding and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.17, 2.18, 2.19, and 10.3 and
Article IX shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof. All
representations and warranties made herein, in the certificates, reports,
notices, and other documents delivered pursuant to this Agreement shall survive
the execution and delivery of this Agreement and the other Loan Documents, and
the making of the Loans and the issuance of the Letters of Credit.

Section 10.10 Severability. Any provision of this Agreement or any other Loan
Document held to be illegal, invalid or unenforceable in any jurisdiction,
shall, as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without affecting the legality, validity or
enforceability of the remaining provisions hereof or thereof; and the
illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

Section 10.11 Confidentiality. Each of the Administrative Agent, the Issuing
Bank and each Lender agrees to take normal and reasonable precautions to
maintain the confidentiality of any information designated in writing as
confidential and provided to it by the Borrower or any Subsidiary, except that,
subject to taking such normal and reasonable precautions to maintain the
confidentiality thereof, such information may be disclosed by the Administrative
Agent, the Issuing Bank and any Lender (i) to any Related Party of the
Administrative Agent, the Issuing Bank or any such Lender, including without
limitation accountants, legal counsel and other advisors, provided, that such
Related Party agrees to be bound by the provisions of this Section 10.11,
(ii) to the extent required by applicable laws or regulations or by any subpoena
or similar legal process, (iii) to the extent requested by any regulatory agency
or authority, (iv) to the extent that such information becomes publicly
available other than as a result of a breach of this Section 10.11, or which
becomes available to the Administrative Agent, the Issuing Bank, any Lender or
any Related Party of any of the foregoing on a nonconfidential basis from a
source other than the Borrower, (v) in connection with the exercise of any
remedy hereunder or any suit, action or proceeding relating to this Agreement or
the enforcement of rights hereunder, and (vi) subject to provisions
substantially similar to this Section 10.11, to any actual or prospective
assignee or Participant, or (vii) with the consent of the Borrower. Any Person
required to maintain the confidentiality of any information as provided for in
this Section 10.11 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 its own
confidential information.

Section 10.12 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which may be treated as interest on such
Loan under applicable law (collectively, the “Charges”), shall exceed the
maximum lawful rate of interest (the “Maximum Rate”) which may be contracted
for, charged, taken, received or reserved by a Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section 10.12 shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or periods
shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Rate to
the date of repayment, shall have been received by such Lender.

 

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Section 10.13 PATRIOT Act Notice. Each Lender subject to the Act hereby notifies
the Borrower that pursuant to the requirements of the Act, it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the Act.

Section 10.14 No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower acknowledges and agrees, and acknowledges its
Affiliates’ understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent and the Arranger,
are arm’s-length commercial transactions between the Borrower and its
Affiliates, on the one hand, and the Administrative Agent and the Arranger, on
the other hand, (B) the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and (C) the
Borrower is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Administrative Agent and the Arranger each is and has
been acting solely as a principal and, except as expressly agreed in writing by
the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Borrower or any of its Affiliates or any
other Person and (B) neither the Administrative Agent nor the Arranger has any
obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents and (iii) the Administrative Agent and
the Arranger and their respective Affiliates may be engaged in a board range of
transactions that involve interests that differ from those of the Borrower and
its Affiliates, and neither the Administrative Agent nor the Arranger has any
obligation to disclose any of such interests to the Borrower or its Affiliates.
To the fullest extent permitted by law, the Borrower hereby waives and releases
any claims that it may have against the Administrative Agent and the Arranger
with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed under seal in the case of the Borrower by their respective authorized
officers as of the day and year first above written.

 

WATSCO, INC.

By:

 

/s/ Ana M. Menendez

Name:

  Ana M. Menendez

Title:

 

Vice President

 

1

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BANK OF AMERICA, N.A., as Administrative Agent

By:

 

/s/ Tamisha U. Eason

Name:

  Tamisha U. Eason

Title:

  Vice President

 

2

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BANK OF AMERICA, N.A., as Issuing Bank, as Swingline Lender and as a Lender

By:

 

/s/ Adam Kaplan

Name:

 

Adam Kaplan

Title:

 

Senior Vice President

Revolving Commitment: $60,000,000 Swingline Commitment: $25,000,000

 

3

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JPMORGAN CHASE BANK, N.A.

By:

 

/s/ Robert P. Carswell

Name:

 

Robert P. Carswell

Title:

 

Vice President

Revolving Commitment: $45,000,000

 

4

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WELLS FARGO BANK, NATIONAL ASSOCIATION

By:

 

/s/ David S. Matter

Name:

 

David S. Matter

Title:

 

Regional Vice President

Revolving Commitment: $40,000,000

 

5

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SUNTRUST BANK By:  

/s/ Robert Maddox

Name:  

Robert Maddox

Title:  

Vice President

Revolving Commitment: $40,000,000

 

6

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MIZUHO CORPORATE BANK (USA)

By:

 

/s/ Robert Gallagher

Name:

 

Robert Gallagher

Title:

 

Senior Vice President

Revolving Commitment: $40,000,000

 

7

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COMERICA BANK

By:

 

/s/ Gerald R. Finney, Jr.

Name:

 

Gerald R. Finney, Jr.

Title:

 

Vice President

Revolving Commitment: $25,000,000

 

8

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THE NORTHERN TRUST COMPANY

By:

 

/s/ Rick J. Gomez

Name:

 

Rick J. Gomez

Title:

 

Commercial Banking Officer

Revolving Commitment: $25,000,000

 

9

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U.S. BANK NATIONAL ASSOCIATION

By:

 

/s/ Frances W. Josephic

Name:

 

Frances W. Josephic

Title:

 

Vice President

Revolving Commitment: $25,000,000

 

10