Exhibit 10.1

 

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EXECUTION COPY

 

[Published CUSIP Number:                     ]

 

CREDIT AGREEMENT

 

Dated as of September 16, 2005

 

among

 

THE STRIDE RITE CORPORATION

 

as a Borrower,

 

THE OTHER BORROWERS PARTY HERETO,

 

BANK OF AMERICA, N.A.,

as Administrative Agent and Swing Line Lender,

 

THE OTHER LENDERS PARTY HERETO,

 

THE BANK OF NEW YORK and SUN TRUST BANK,

as Co-Syndications Agents,

 

and

 

CITIZENS BANK OF MASSACHUSETTS,

as Documentation Agent

 

with

 

BANC OF AMERICA SECURITIES LLC,

 

as

 

Sole Lead Arranger and Sole Book Manager

 

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TABLE OF CONTENTS

 

Section

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          Page

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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS    1

1.1

     Defined Terms    1

1.2

     Other Interpretive Provisions    22

1.3

     Accounting Terms    23

1.4

     Rounding    23

1.5

     Times of Day    23

1.6

     Letter of Credit Amounts    23 ARTICLE II COMMITMENTS AND CREDIT EXTENSIONS
   24

2.1

     Committed Loans    24

2.2

     Borrowings, Conversions and Continuations of Committed Loans    24

2.3

     Letters of Credit    25

2.4

     Swing Line Loans    34

2.5

     Prepayments    37

2.6

     Termination or Reduction of Commitments    37

2.7

     Repayment of Loans    38

2.8

     Interest    38

2.9

     Fees    39

2.10

     Computation of Interest and Fees    39

2.11

     Evidence of Debt    39

2.12

     Payments Generally; Administrative Agent’s Clawback    40

2.13

     Sharing of Payments by Lenders    42

2.14

     Increase in Commitments    42

2.15

     Collateral Security and Guaranties    44

2.16

     Additional Borrowers    44 ARTICLE III TAXES, YIELD PROTECTION AND
ILLEGALITY    44

3.1

     Taxes    44

3.2

     Illegality    46

3.3

     Inability to Determine Rates    47

3.4

     Increased Costs; Reserves on Eurodollar Rate Loans    47

3.5

     Compensation for Losses    49

3.6

     Mitigation Obligations; Replacement of Lenders    50

3.7

     Survival    50 ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS    50

4.1

     Conditions of Initial Credit Extension    50

4.2

     Conditions to all Credit Extensions    54 ARTICLE V REPRESENTATIONS AND
WARRANTIES    54

5.1

     Existence, Qualification and Power; Compliance with Laws    54

5.2

     Authorization; No Contravention    54

5.3

     Governmental Authorization; Other Consents    55

 

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(continued)

 

Section

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5.4

     Binding Effect    55

5.5

     Financial Statements; No Material Adverse Effect; No Internal Control Event
   55

5.6

     Litigation    56

5.7

     No Default    56

5.8

     Ownership of Property; Liens    56

5.9

     Environmental Compliance    56

5.10

     Insurance    56

5.11

     Taxes    57

5.12

     ERISA Compliance    57

5.13

     Subsidiaries; Equity Interests    57

5.14

     Margin Regulations; Investment Company Act; Public Utility Holding Company
Act    58

5.15

     Disclosure    58

5.16

     Compliance with Laws    58

5.17

     Intellectual Property; Licenses, Etc    59

5.18

     Use of Proceeds    59

5.19

     Solvency    59

5.20

     Perfection of Security Interest    59

5.21

     Absence of Financing Statements    60

5.22

     Fiscal Year    60

5.23

     Certain Transactions    60

5.24

     Federal Tax Identification Numbers    60 ARTICLE VI AFFIRMATIVE COVENANTS
   60

6.1

     Financial Statements    60

6.2

     Certificates; Other Information    61

6.3

     Notices    63

6.4

     Payment of Obligations    64

6.5

     Preservation of Existence, Etc    64

6.6

     Maintenance of Properties    64

6.7

     Maintenance of Insurance    65

6.8

     Compliance with Laws and Agreements    65

6.9

     Books and Records    65

6.10

     Inspection Rights    65

6.11

     Use of Proceeds    65

6.12

     Additional Guarantors    65

6.13

     Further Assurances    66

6.14

     Certificate of Merger    66

6.15

     Termination of Listing    66 ARTICLE VII NEGATIVE COVENANTS    66

7.1

     Liens    66

 

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(continued)

 

Section

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7.2

     Investments    67

7.3

     Indebtedness    69

7.4

     Fundamental Changes    70

7.5

     Dispositions    70

7.6

     Restricted Payments    71

7.7

     Change in Nature of Business    72

7.8

     Transactions with Affiliates    72

7.9

     Burdensome Agreements    72

7.10

     Use of Proceeds    72

7.11

     Change in Terms of Organizational Documents    73

7.12

     Change in Accounting and Reporting Policies    73

7.13

     Financial Covenants    73

7.14

     Capital Expenditures    73

7.15

     Subordinated Debt    73 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES    74

8.1

     Events of Default    74

8.2

     Remedies Upon Event of Default    76

8.3

     Application of Funds    77 ARTICLE IX ADMINISTRATIVE AGENT    78

9.1

     Appointment and Authority    78

9.2

     Rights as a Lender    78

9.3

     Exculpatory Provisions    78

9.4

     Reliance by Administrative Agent    79

9.5

     Delegation of Duties    79

9.6

     Resignation of Administrative Agent    80

9.7

     Non-Reliance on Administrative Agent and Other Lenders    81

9.8

     No Other Duties, Etc    81

9.9

     Administrative Agent May File Proofs of Claim    81

9.10

     Collateral and Guaranty Matters    82 ARTICLE X MISCELLANEOUS    82

10.1

     Amendments, Etc    82

10.2

     Notices; Effectiveness; Electronic Communication    84

10.3

     No Waiver; Cumulative Remedies    86

10.4

     Expenses; Indemnity; Damage Waiver    86

10.5

     Payments Set Aside    88

10.6

     Successors and Assigns    88

10.7

     Treatment of Certain Information; Confidentiality    93

10.8

     Right of Setoff    93

10.9

     Interest Rate Limitation    94

10.10

     Counterparts; Integration; Effectiveness    94

 

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Section

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10.11

     Survival of Representations and Warranties    94

10.12

     Severability    95

10.13

     Replacement of Lenders    95

10.14

     Governing Law; Jurisdiction; Etc    96

10.15

     Waiver of Jury Trial    97

10.16

     USA PATRIOT Act Notice    97

10.17

     Time of the Essence    97

10.18

     Joint and Several Liability of the Borrowers    97

 

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SCHEDULES

 

1.1

   Subsidiary Borrowers

2.1

   Commitments and Applicable Percentages

5.5

   Supplement to Interim Financial Statements

5.6

   Litigation

5.9

   Environmental Matters

5.13

   Subsidiaries; Other Equity Investments; Guarantors

5.17

   Intellectual Property Matters

5.24

   Identification and Organizational Numbers

7.1

   Existing Liens

7.3

   Existing Indebtedness

10.2

   Administrative Agent’s Office; Certain Addresses for Notices

10.6

   Processing and Recordation Fees EXHIBITS

Form of

    

A

   Committed Loan Notice

B

   Swing Line Loan Notice

C

   Note

D

   Compliance Certificate

E

   Assignment and Assumption

F

   Guaranty

G

   Joinder Agreement

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT (“Agreement”) is entered into as of September 16, 2005
among (a) THE STRIDE RITE CORPORATION, a Massachusetts corporation (“SRC”) and
each Subsidiary listed on Schedule 1.1 hereto (collectively, the “Borrowers” and
individually, a “Borrower”), (b) each lender from time to time party hereto
(collectively, the “Lenders” and individually, a “Lender”), and (c) BANK OF
AMERICA, N.A., as Administrative Agent and Swing Line Lender.

 

The Borrowers have requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.

 

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

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

1.1 Defined Terms. As used in this Agreement, the following terms shall have the
meanings set forth below:

 

“Acquisition” means the acquisition by SRC of the Target pursuant to the
Acquisition Documents.

 

“Acquisition Documents” means collectively, the (i) Merger Agreement and (ii)
all other schedules, exhibits and annexes thereto and all other documents,
agreements and instruments entered into in connection therewith.

 

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

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.2, or such other address or
account as the Administrative Agent may from time to time notify to the
Borrowers and the Lenders.

 

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

 

“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

 

“Aggregate Commitments” means the Commitments of all the Lenders.

 

“Agreement” means this Credit Agreement, including all exhibits and schedules
attached hereto.

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“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time. If the commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.2 or if the Aggregate
Commitments have expired, then the Applicable Percentage of each Lender shall be
determined based on the Applicable Percentage of such Lender most recently in
effect, giving effect to any subsequent assignments. The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on
Schedule 2.1 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.

 

“Applicable Rate” means the following percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to Section 6.2(b):

 

Applicable Margin

 

Pricing

Level

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Consolidated

Leverage

Ratio

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Commitment

Fee

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Eurodollar

Rate

Standby

Letters of

Credit

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Commercial

Letters of

Credit

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Base

Rate

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  1    >2.0:1.0    0.30 %   1.50 %   0.750 %   0 % 2    <2.0:1.0 and >1.5:1.0   
0.25 %   1.25 %   0.625 %   0 % 3    <1.5:1.0 and >1.0:1.0    0.20 %   1.00 %  
0.500 %   0 % 4    <1.0:1.0    0.15 %   0.75 %   0.375 %   0 %

 

Any increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant to
Section 6.2(b); provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section, then Pricing Level 1 shall
apply as of the first Business Day after the date on which such Compliance
Certificate was required to have been delivered until the first Business Day
immediately following the date that such Compliance Certificate is delivered.
Notwithstanding the foregoing, the Applicable Rate in effect from the Closing
Date through the first Business Day immediately following the date a Compliance
Certificate is delivered for FQ3 of FYE 2005, shall be as set forth in Pricing
Level 2.

 

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

 

“Arranger” means Banc of America Securities LLC, in its capacity as sole lead
arranger and sole book manager.

 

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

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.6(b), and accepted by the Administrative Agent, in
substantially the form of Exhibit E or any other form approved by the
Administrative Agent.

 

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

 

“Audited Financial Statements” means (a) the audited consolidated balance sheet
of the Borrowers and the Subsidiaries for FYE 2004 and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
Fiscal Year of the Borrowers and the Subsidiaries, including the notes thereto
and (b) the audited consolidated balance sheet of the Target for the fiscal year
of the Target ended December 31, 2004 and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal year
of the Target, including the notes thereto.

 

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.6, and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuer to make L/C Credit Extensions pursuant to Section 8.2.

 

“Bank of America” means Bank of America, N.A. and its successors.

 

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

 

“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.

 

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

 

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

 

“Borrower Materials” has the meaning specified in Section 6.2.

 

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

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.

 

“Capital Assets” means fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciate over a
useful life of 12 months or less in accordance with GAAP.

 

“Capital Expenditures” means amounts paid or Indebtedness incurred by any
Borrower or any Subsidiary in connection with (a) the purchase or lease by any
Borrower or any Subsidiary of Capital Assets that would be required to be
capitalized and shown on the balance sheet of such Person in accordance with
GAAP or (b) the lease of any assets by any Borrower or any Subsidiary as lessee
under any so-called synthetic, off-balance sheet or tax retention lease to the
extent that such assets would have been Capital Assets had such lease been
treated for accounting purposes as a Capitalized Lease.

 

“Capitalized Leases” means leases under which any Borrower or any Subsidiary is
the lessee or obligor, the discounted future rental payment obligations under
which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with GAAP.

 

“Cash Collateralize” has the meaning specified in Section 2.3(g).

 

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

 

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

 

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, but excluding any employee benefit plan
of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire (such right, an “option right”), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 30% or more of the equity securities of SRC entitled to vote for
members of the board of directors or equivalent governing body of SRC on a
fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right);

 

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(b) during any period of 12 consecutive months, a majority of the members of the
board of directors or other equivalent governing body of SRC cease to be
composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or
nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or

 

(c) any Person or two or more Persons acting in concert shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of SRC, or control over the equity securities of SRC
entitled to vote for members of the board of directors or equivalent governing
body of SRC on a fully-diluted basis (and taking into account all such
securities that such Person or group has the right to acquire pursuant to any
option right) representing 30% or more of the combined voting power of such
securities.

 

“Closing Date” means the first date all the conditions precedent in Section 4.1
are satisfied or waived in accordance with Section 10.1.

 

“Closing Material Adverse Effect” means a material adverse change in the
business, results of operations or financial condition of the Borrowers and the
Subsidiaries, taken as a whole, since June 1, 2005; provided, that with respect
to periods from and after June 1, 2005 up to and including the Closing Date, no
change, effect or circumstance will be deemed (either alone or in combination)
to constitute, nor will be taken into account in determining whether there has
been or would reasonably be expected to be, a Closing Material Adverse Effect to
the extent that it arises out of or relates to: (1) a general deterioration in
the United States economy or in the industry or segment in which the Borrowers
operate provided such change does not disproportionately affect the Borrowers as
compared to similarly situated companies in similar industries or segments, or
(2) any change in accounting requirements or principles imposed upon the
Borrowers or any change in applicable laws, rules or regulations or the
interpretation thereof provided such change does not disproportionately affect
the Borrowers as compared to similarly situated companies in similar industries
or segments.

 

“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all of the property, rights and interests of the Borrowers
and the Subsidiaries, that are or are intended to be subject to the Liens
created by the Security Documents.

 

5

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“Commitment” means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrowers pursuant to Section 2.1, (b) purchase participations in
L/C Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.1 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.

 

“Committed Borrowing” means a borrowing consisting of simultaneous Committed
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Lenders pursuant to Section 2.1.

 

“Committed Loan” has the meaning specified in Section 2.1.

 

“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Eurodollar Rate Loans, pursuant to Section 2.2(a), which, if in writing,
shall be substantially in the form of Exhibit A.

 

“Consolidated Cash Interest Expense” means for any period, the aggregate amount
of interest required to be paid in cash by the Borrowers and the Subsidiaries
during such period on all Indebtedness of the Borrowers and the Subsidiaries
outstanding during all or any part of such period, including payments consisting
of interest in respect of any Capitalized Lease or any Synthetic Lease
Obligations.

 

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

 

“Consolidated EBIT” means (a) the consolidated earnings (or loss) from
operations (excluding all extraordinary and nonrecurring items of income (or
loss, but only to the extent not involving cash charges in the applicable period
or any future period)) of the Borrowers and the Subsidiaries for any period,
after all expenses and other proper charges but before payment or provision for
any income taxes or interest expense for such period, plus (b) in each case to
the extent deducted in the calculation of such Person’s consolidated earnings
and without duplication, (i) costs incurred during such period, in an aggregate
amount not to exceed $3,000,000, incurred in connection with the integration of
the Target with SRC, plus (ii) one-time noncash charges incurred during such
period, in an aggregate amount not to exceed $15,000,000, relating to the
portion of the purchase price for the Acquisition allocated to inventory, which
charges shall be incurred no later than May 31, 2006, in each case, as
determined in accordance with GAAP.

 

“Consolidated EBITDA” means (a) the consolidated earnings (or loss) from
operations (excluding all extraordinary and nonrecurring items of income (or
loss, but only to the extent not involving cash charges in the applicable period
or any future period)) of the Borrowers and the Subsidiaries for any period,
after all expenses and other proper charges but before payment or provision for
any income taxes or interest expense for such period, plus, (b) in each case to
the extent deducted in the calculation of such Person’s consolidated earnings
and without duplication, (i) depreciation, amortization and all other
nonrepetitive noncash charges (but only

 

6

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to the extent not involving cash charges in the applicable period or any future
period) for such period (including, without limitation, noncash charges relating
to the granting or repricing of stock options), plus (ii) costs incurred during
such period, in an aggregate amount not to exceed $3,000,000, incurred in
connection with the integration of the Target with SRC, plus (iii) one-time
non-cash charges incurred during such period, in an aggregate amount not to
exceed $15,000,000, relating to the portion of the purchase price for the
Acquisition allocated to inventory, which charges shall be incurred no later
than May 31, 2006, in each case, as determined in accordance with GAAP.

 

“Consolidated Fixed Charge Coverage Ratio” means, as of any date of
determination, the ratio of (a) Consolidated EBIT for the period of the four
Fiscal Quarters most recently ended plus Consolidated Rental Expense for such
period to (b) Consolidated Cash Interest Expense during such period plus
Consolidated Rental Expense for such period; provided that, Consolidated Fixed
Charge Coverage Ratio shall be calculated on a pro forma basis following the
Acquisition and any other acquisition or disposition permitted hereunder (as
though such acquisition or disposition occurred at the beginning of the four
Fiscal Quarter period most recently ended).

 

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Total Funded Indebtedness as of such date to (b)
Consolidated EBITDA for the period of the four Fiscal Quarters most recently
ended; provided that, Consolidated Leverage Ratio shall be calculated on a pro
forma basis following the Acquisition and any other acquisition or disposition
permitted hereunder (as though such acquisition or disposition occurred at the
beginning of the four Fiscal Quarter period most recently ended).

 

“Consolidated Net Income (or Deficit)” means the consolidated net income (or
deficit) of the Borrowers and the Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with GAAP, after
eliminating therefrom all extraordinary nonrecurring items of income.

 

“Consolidated Rental Expense” means, for any period, all obligations of the
Borrowers and the Subsidiaries under any rental agreements or leases of real or
personal property, other than obligations in respect of any Capitalized Leases.

 

“Consolidated Tangible Net Worth” means the excess of Consolidated Total Assets
over Consolidated Total Liabilities, and less the sum of:

 

(a) the total book value of all assets of the Borrowers and the Subsidiaries
properly classified as intangible assets under GAAP, including such items as
good will, the purchase price of acquired assets in excess of the fair market
value thereof, trademarks, trade names, service marks, brand names, copyrights,
patents and licenses, and rights with respect to the foregoing;

 

(b) all amounts representing any write-up in the book value of any assets of the
Borrowers or the Subsidiaries resulting from a revaluation thereof subsequent to
the end of FYE 2004 (excluding adjustments to translate foreign assets and
liabilities for changes in foreign exchange rates made in accordance with
Financial Accounting Standards Board Statement No. 52); and

 

7

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(c) to the extent otherwise includable in the computation of Consolidated
Tangible Net Worth, any subscriptions receivable.

 

“Consolidated Total Assets” means the sum of (a) all assets (“consolidated
balance sheet assets”) of the Borrowers and the Subsidiaries determined on a
consolidated basis in accordance with GAAP, plus (b) without duplication, all
assets leased by the Borrowers or any Subsidiary as lessee under any so-called
synthetic, off-balance sheet or tax retention lease to the extent that such
assets would have been consolidated balance sheet assets had such lease been
treated for accounting purposes as a Capitalized Lease, plus (c) without
duplication, all “sold receivables” to the extent that such receivables would
have been consolidated balance sheet assets had they not been sold. For purposes
of this definition, “sold receivables” shall mean all sales by the Borrowers or
any Subsidiary of (A) accounts or general intangibles for money due or to become
due, (B) chattel paper, instruments or documents creating or evidencing a right
to payment of money or (C) other receivables, whether pursuant to a purchase
facility or otherwise, other than in connection with the disposition of the
business operations of such Person relating thereto or a disposition of
defaulted receivables for collection and not as a financing arrangement.

 

“Consolidated Total Funded Indebtedness” means, as of any date of determination,
on a consolidated basis in accordance with GAAP, an amount equal to the sum of
(a) all Indebtedness of the Borrowers and the Subsidiaries relating to the
borrowing of money or the utilization of credit (including letters of credit,
other than (i) documentary letters of credit and (ii) standby letters of credit
to the extent the same support Indebtedness otherwise included in Consolidated
Total Funded Indebtedness), (b) all obligations of the Borrowers and the
Subsidiaries in respect of Capitalized Leases and (c) the aggregate amount of
outstanding Synthetic Lease Obligations.

 

“Consolidated Total Liabilities” means all liabilities of the Borrowers and the
Subsidiaries determined on a consolidated basis in accordance with GAAP and
classified as such on the consolidated balance sheet of the Borrowers and the
Subsidiaries.

 

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

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

 

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

 

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

 

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

 

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

 

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Committed Loans, participations in L/C Obligations or participations in
Swing Line Loans required to be funded by it hereunder within one Business Day
of the date required to be funded by it hereunder, (b) has otherwise failed to
pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (c) has been deemed
insolvent or become the subject of a bankruptcy or insolvency proceeding.

 

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

 

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

 

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
any political subdivision of the United States.

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent and the Swing Line Lender, and (ii) unless an
Event of Default has occurred and is continuing, the Borrowers (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include any
Borrower or any of the their respective Affiliates or Subsidiaries.

 

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

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure

 

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to any Hazardous Materials, (d) the release or threatened release of any
Hazardous Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

 

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

 

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

 

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

 

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

 

“Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar
Rate 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 “Eurodollar Rate” for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Rate 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

 

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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.

 

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

 

“Event of Default” has the meaning specified in Section 8.1.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the L/C Issuer or any other recipient of any payment to be made by or on account
of any obligation of any Borrower hereunder, (a) taxes imposed on or measured by
its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) 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 or any similar tax imposed by any other jurisdiction in which
any Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrowers under Section 10.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender’s failure or inability (other
than as a result of a Change in Law) to comply with Section 3.1(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 any Borrower with respect to such withholding tax
pursuant to Section 3.1(a).

 

“Existing Credit Agreements” means (a) that certain Revolving Credit Agreement,
as amended, dated as of January 19, 2000 among SRC, Fleet National Bank, as
agent, and a syndicate of lenders and (b) that certain Amended and Restated
Credit Agreement, as amended, dated as of August 30, 2002, among the Target,
HSBC Bank USA, as agent, and a syndicate of lenders.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

 

“Fee Letter” means the letter agreement, dated June 1, 2005 among SRC, the
Administrative Agent and the Arranger.

 

“Fiscal Quarter” has the meaning specified in Section 5.22.

 

“Fiscal Year” has the meaning specified in Section 5.22.

 

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“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrowers are 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.

 

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“FQ1, FQ2, FQ3, FQ4” means the first, second, third and fourth Fiscal Quarters
respectively, of a specified Fiscal Year.

 

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

 

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

 

“FYE” means a Fiscal Year of the Borrowers and the Subsidiaries ending on a
specified date or during a specified calendar month or calendar year.

 

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

 

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

 

“Granting Lender” has the meaning specified in Section 10.6(h).

 

“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to

 

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protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.

 

“Guarantors” means, collectively, (a) each Domestic Subsidiary that has executed
a Guaranty and (b) each Material Foreign Subsidiary that has executed a
Guaranty.

 

“Guaranty” means collectively or individually as the context may require, the
Guaranty, dated as of the Closing Date, made by the Guarantors in favor of the
Administrative Agent and the Lenders and each other Guaranty at any time
delivered by a Domestic Subsidiary or a Material Foreign Subsidiary, each
substantially in the form of Exhibit F.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

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

 

(a) all obligations of such Person for borrowed money (other than obligations in
respect of borrowings against the cash value of insurance policies owned by such
Person, provided that such obligations do not have enforcement recourse to other
assets of such Person) and all obligations of such Person evidenced by bonds,
debentures, notes, loan agreements or other similar instruments;

 

(b) all direct or contingent obligations of such Person arising under letters of
credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds and similar instruments;

 

(c) net obligations of such Person under any Swap Contract;

 

(d) all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business and, in each case, not past due for more than 60 days after the date
on which such trade account payable was created);

 

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse;

 

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(f) obligations with respect to capital leases and Synthetic Lease Obligations;

 

(g) all obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interest in such Person or
any other Person, valued, in the case of a redeemable preferred interest, at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and

 

(h) all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees” has the meaning specified in Section 10.4(b).

 

“Information” has the meaning specified in Section 10.7.

 

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

 

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

 

(a) any Interest Period that would otherwise end on a day that is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the next preceding Business Day;

 

(b) any Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period; and

 

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

 

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“Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, SRC’s internal
controls over financial reporting, in each case as described in the Securities
Laws.

 

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

 

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

 

“IRS” means the United States Internal Revenue Service.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).

 

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and any Borrower (or any Subsidiary) or in favor of the
L/C Issuer and relating to any such Letter of Credit.

 

“Joinder Agreement” means a joinder agreement substantially in the form of
Exhibit G.

 

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

 

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

 

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

 

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

 

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“L/C Issuer” means collectively or individually, as the context may require, (a)
Bank of America in its capacity as issuer of Letters of Credit hereunder, or any
successor issuer of Letters of Credit hereunder and (b) each other Lender that,
with the consent of the Administrative Agent (such consent not to be
unreasonably withheld), has agreed in a writing, delivered to the Borrowers and
the Administrative Agent, to issue Letters of Credit.

 

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

 

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

 

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

 

“Letter of Credit” means any letter of credit issued hereunder. A Letter of
Credit may be a commercial letter of credit or a standby letter of credit.

 

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.

 

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

 

“Letter of Credit Fee” has the meaning specified in Section 2.3(i).

 

“Letter of Credit Sublimit” means an amount equal to $75,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

 

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

 

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

 

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“Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee
Letter, the Guaranty, the Security Documents and any other document executed by
a Loan Party arising out of or in connection with this Agreement.

 

“Loan Parties” means, collectively, the Borrowers and each Guarantor.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual
or contingent), condition (financial or otherwise) or prospects of the Borrowers
or the Borrowers and the Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under any
Loan Document to which it is a party; (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party; or (d) a material adverse effect on
the priority or perfection of any of the Administrative Agent’s liens and
security interests provided for hereunder and under the other Loan Documents.

 

“Material Domestic Subsidiary” means any Domestic Subsidiary that is a Material
Subsidiary.

 

“Material Foreign Subsidiary” means any Foreign Subsidiary that is a Material
Subsidiary.

 

“Material Subsidiary” means any Subsidiary of SRC, (a) the book value of the
total assets of which, as of end of FQ2 of 2005 or of the last day of the most
recent fiscal period for which financial statements have been furnished pursuant
to Section 6.1 equals or exceeds $10,000,000 or (b) of which the Consolidated
EBIT attributable to such Subsidiary for the four Fiscal Quarter period then
ended equals or exceeds 5% of the Consolidated EBIT of the Borrowers and the
Subsidiaries.

 

“Maturity Date” means September 16, 2010.

 

“Merger” means the merger of OC, Inc., a wholly owned Subsidiary of SRC, with
and into the Target pursuant to which the Target shall be the surviving entity,
in accordance with the Merger Agreement and as a result of which the Target
shall become a wholly owned subsidiary of SRC.

 

“Merger Agreement” means the Plan of Merger, dated as of June 1, 2005, by and
among SRC, OC, Inc. and the Target.

 

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

 

“Non-Material Foreign Subsidiary” means any Foreign Subsidiary that is a
Non-Material Subsidiary.

 

“Non-Material Subsidiary” means any Subsidiary that is not a Material
Subsidiary.

 

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

 

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising (i) under any Loan Document,
(ii) under any Swap Contract of any Borrower or any Subsidiary to which a Lender
or any Affiliate of a Lender is a party, (iii) in respect of any treasury or
cash management services provided to any Borrower or any Subsidiary by a Lender
or any Affiliate of a Lender, or (iv) otherwise with respect to any Loan or
Letter of Credit, in each case, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against any Loan Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.

 

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

 

“Other Taxes” means 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 under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.

 

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

 

“Participant” has the meaning specified in Section 10.6(d).

 

“Permitted Acquisition” has the meaning specified in Section 7.4(c).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA

 

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and is sponsored or maintained by any Borrower or any ERISA Affiliate or to
which any Borrower or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership (whether limited or
general), Governmental Authority, unincorporated organization or other entity.

 

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

 

“Platform” has the meaning specified in Section 6.2.

 

“Pledge Agreement” means collectively or individually as the context may
require, the Pledge Agreements, dated as of the Closing Date, executed by each
of the Loan Parties and each other Pledge Agreement at any time delivered by a
Loan Party.

 

“Register” has the meaning specified in Section 10.6(c).

 

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

 

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

 

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

 

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

 

“Required Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.2, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

 

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of a Loan Party. Any
document delivered hereunder that

 

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is signed by a Responsible Officer of a Loan Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Loan Party and such Responsible Officer shall
be conclusively presumed to have acted on behalf of such Loan Party.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of any Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such capital stock or other Equity Interest, or on account of
any return of capital to any Borrower’s stockholders, partners or members (or
the equivalent Person thereof).

 

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

 

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

 

“Securities Laws” means the Securities Act of 1933, the Securities Exchange Act
of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the Public Company Accounting Oversight Board, as each of the foregoing may
be amended and in effect on any applicable date hereunder.

 

“Security Documents” means the Guaranty, the Pledge Agreement and all other
instruments and documents, including, without limitation, Uniform Commercial
Code financing statements, required to be executed or delivered pursuant to any
Security Document.

 

“SPC” has the meaning specified in Section 10.6(h).

 

“Subordinated Debt” has the meaning specified in Section 7.3(j).

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
any Borrower, including, without limitation, the Target.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any

 

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combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.

 

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

 

“Swing Line” means the revolving credit facility made available by the Swing
Line Lender pursuant to Section 2.4.

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.4.

 

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

 

“Swing Line Loan” has the meaning specified in Section 2.4(a).

 

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.4(b), which, if in writing, shall be substantially in the form of
Exhibit B.

 

“Swing Line Sublimit” means an amount equal to the lesser of (a) $15,000,000 and
(b) the Aggregate Commitments. The Swing Line Sublimit is part of, and not in
addition to, the Aggregate Commitments.

 

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

 

“Target” means Saucony, Inc., a Massachusetts corporation, and its Subsidiaries.

 

“Target Material Adverse Effect” means a Company Material Adverse Effect (as
defined in the Merger Agreement).

 

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

 

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

 

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

 

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

 

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

 

“Unreimbursed Amount” has the meaning specified in Section 2.3(c)(i).

 

1.2 Other Interpretive Provisions. With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

 

(a) The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
“include,” “includes” and “including” shall be deemed to be followed by the
phrase “without limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires otherwise,
(i) any definition of or reference to any agreement, instrument or other
document (including any Organization Document) shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall
be construed to refer to such Loan Document in its entirety and not to any
particular provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing or
interpreting such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended, modified or
supplemented from time to time, and (vi) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

(b) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including;” the words “to” and
“until” each mean “to but excluding;” and the word “through” means “to and
including.”

 

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(c) Section headings herein and in the other Loan Documents are included for
convenience of reference only and shall not affect the interpretation of this
Agreement or any other Loan Document.

 

1.3 Accounting Terms. (a) Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.

 

(b) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrowers or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrowers shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Borrowers shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

 

(c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of the Borrowers and the Subsidiaries or to
the determination of any amount for the Borrowers and the Subsidiaries on a
consolidated basis or any similar reference shall, in each case, be deemed to
include each variable interest entity that any Borrower is required to
consolidate pursuant to FASB Interpretation No. 46 – Consolidation of Variable
Interest Entities: an interpretation of ARB No. 51 (January 2003) as if such
variable interest entity were a Subsidiary as defined herein.

 

1.4 Rounding. Any financial ratios required to be maintained by the Borrowers
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

 

1.5 Times of Day. Unless otherwise specified, all references herein to times of
day shall be references to Eastern time (daylight or standard, as applicable).

 

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

 

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ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.1 Committed Loans. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a “Committed Loan”) to
the Borrowers from time to time, on any Business Day during the Availability
Period, in an aggregate amount not to exceed at any time outstanding the amount
of such Lender’s Commitment; provided, however, that after giving effect to any
Committed Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Committed Loans of
any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all L/C Obligations, plus such Lender’s Applicable Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Commitment. Within the limits of each Lender’s Commitment, and subject to the
other terms and conditions hereof, the Borrowers may borrow under this Section
2.1, prepay under Section 2.5, and reborrow under this Section 2.1. Committed
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.

 

2.2 Borrowings, Conversions and Continuations of Committed Loans.

 

(a) Each Committed Borrowing, each conversion of Committed Loans from one Type
to the other, and each continuation of Eurodollar Rate Loans shall be made upon
the Borrowers’ irrevocable notice to the Administrative Agent, which may be
given by telephone. Each such notice must be received by the Administrative
Agent not later than 11:00 a.m. (i) three Business Days prior to the requested
date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans
or of any conversion of Eurodollar Rate Loans to Base Rate Committed Loans, and
(ii) on the requested date of any Borrowing of Base Rate Committed Loans. Each
telephonic notice by the Borrowers pursuant to this Section 2.2(a) must be
confirmed promptly by delivery to the Administrative Agent of a written
Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrowers. Each Borrowing of, conversion to or continuation of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.3(c)
and 2.4(c), each Borrowing of or conversion to Base Rate Committed Loans shall
be in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each Committed Loan Notice (whether telephonic or written) shall
specify (i) whether the Borrowers are requesting a Committed Borrowing, a
conversion of Committed Loans from one Type to the other, or a continuation of
Eurodollar Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Committed Loans to be borrowed, converted or continued, (iv)
the Type of Committed Loans to be borrowed or to which existing Committed Loans
are to be converted, and (v) if applicable, the duration of the Interest Period
with respect thereto. If the Borrowers fail to specify a Type of Committed Loan
in a Committed Loan Notice or if the Borrowers fail to give a timely notice
requesting a conversion or continuation, then the applicable Committed Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable Eurodollar Rate
Loans. If the Borrowers request a Borrowing of, conversion to, or continuation
of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify
an Interest Period, it will be deemed to have specified an Interest Period of
one month.

 

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(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Applicable Percentage of the
applicable Committed Loans, and if no timely notice of a conversion or
continuation is provided by the Borrowers, the Administrative Agent shall notify
each Lender of the details of any automatic conversion to Base Rate Loans
described in the preceding subsection. In the case of a Committed Borrowing,
each Lender shall make the amount of its Committed Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent’s Office not later than 1:00 p.m. on the Business Day specified in the
applicable Committed Loan Notice. Upon satisfaction of the applicable conditions
set forth in Section 4.2 (and, if such Borrowing is the initial Credit
Extension, Section 4.1), the Administrative Agent shall make all funds so
received available to the Borrowers in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrowers on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrowers; provided,
however, that if, on the date the Committed Loan Notice with respect to such
Borrowing is given by the Borrowers, there are L/C Borrowings outstanding, then
the proceeds of such Borrowing, first, shall be applied to the payment in full
of any such L/C Borrowings, and second, shall be made available to the Borrowers
as provided above.

 

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

 

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

 

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

 

2.3 Letters of Credit.

 

(a) The Letter of Credit Commitment.

 

(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer
agrees, in reliance upon the agreements of the Lenders set forth in this Section
2.3, (1) from time to time on any Business Day during the period from the
Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Borrowers or the Subsidiaries, and to amend or
extend Letters of Credit previously issued by it, in accordance with subsection
(b) below, and (2) to honor drawings under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrowers or the Subsidiaries and any drawings thereunder;
provided that after giving effect to any L/C Credit Extension with respect to
any Letter of

 

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Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments,
(y) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount
of all Swing Line Loans shall not exceed such Lender’s Commitment, and (z) the
Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit
Sublimit. Each request by the Borrowers for the issuance or amendment of a
Letter of Credit shall be deemed to be a representation by the Borrowers that
the L/C Credit Extension so requested complies with the conditions set forth in
the proviso to the preceding sentence. Within the foregoing limits, and subject
to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrowers may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed.

 

(ii) The L/C Issuer shall not issue any Letter of Credit, if:

 

(A) subject to Section 2.3(b)(iii), the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of issuance or last
extension, unless the Required Lenders have approved such expiry date; or

 

(B) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such
expiry date; provided that one or more Letters of Credit may contain an
expiration date beyond the Letter of Credit Expiration Date so long as the
Borrowers Cash Collateralize such Letters of Credit pursuant to Section
2.3(g)(ii).

 

(iii) The L/C Issuer shall not be under any obligation to issue any Letter of
Credit if:

 

(A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing
such Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters of credit generally or such
Letter of Credit in particular or shall impose upon the L/C Issuer with respect
to such Letter of Credit any restriction, reserve or capital requirement (for
which the L/C Issuer is not otherwise compensated hereunder) not in effect on
the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which the L/C
Issuer in good faith deems material to it;

 

(B) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer;

 

(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer,
such Letter of Credit is in an initial stated amount less than $50,000, in the
case of a commercial Letter of Credit, or $125,000, in the case of a standby
Letter of Credit;

 

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

 

(E) such Letter of Credit contains any provisions for automatic reinstatement of
the stated amount after any drawing thereunder; or

 

(F) a default of any Lender’s obligations to fund under Section 2.3(c) exists or
any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer
has entered into satisfactory arrangements with the Borrowers or such Lender to
eliminate the L/C Issuer’s risk with respect to such Lender.

 

(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would
not be permitted at such time to issue such Letter of Credit in its amended form
under the terms hereof.

 

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

 

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

 

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

 

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon
the request of the Borrowers delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of the Borrowers.
Such Letter of Credit Application must be received by the L/C Issuer and the
Administrative Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as the Administrative Agent and the L/C Issuer may
agree in a particular instance in their sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name
and address of the

 

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beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter
of Credit to be amended; (B) the proposed date of amendment thereof (which shall
be a Business Day); (C) the nature of the proposed amendment; and (D) such other
matters as the L/C Issuer may require. Additionally, the Borrowers shall furnish
to the L/C Issuer and the Administrative Agent such other documents and
information pertaining to such requested Letter of Credit issuance or amendment,
including any Issuer Documents, as the L/C Issuer or the Administrative Agent
may require.

 

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer
will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrowers and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof. Unless the L/C Issuer has received written notice
from any Lender, the Administrative Agent or any Loan Party, at least one
Business Day prior to the requested date of issuance or amendment of the
applicable Letter of Credit, that one or more applicable conditions contained in
Article IV shall not then be satisfied, then, subject to the terms and
conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter
of Credit for the account of the Borrowers (or the applicable Subsidiary) or
enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer a risk participation in such Letter of Credit in an amount equal
to the product of such Lender’s Applicable Percentage times the amount of such
Letter of Credit.

 

(iii) If the Borrowers so request in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic extension provisions (each, an
“Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter
of Credit must permit the L/C Issuer to prevent any such extension at least once
in each twelve-month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Non-Extension Notice Date”) in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued. Unless otherwise
directed by the L/C Issuer, the Borrowers shall not be required to make a
specific request to the L/C Issuer for any such extension. Once an
Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to
have authorized (but may not require) the L/C Issuer to permit the extension of
such Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date (or a later date if permitted pursuant to clause (ii)(B)
of Section 2.3(a)) ; provided, however, that the L/C Issuer shall not permit any
such extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of
Credit in its revised form (as extended) under the terms hereof (by reason of
the provisions of clause

 

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(ii) or (iii) of Section 2.3(a) or otherwise), or (B) it has received notice
(which may be by telephone or in writing) on or before the day that is five
Business Days before the Non-Extension Notice Date (1) from the Administrative
Agent that the Required Lenders have elected not to permit such extension or (2)
from the Administrative Agent, any Lender or the Borrowers that one or more of
the applicable conditions specified in Section 4.2 is not then satisfied, and in
each such case directing the L/C Issuer not to permit such extension.

 

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a
Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Borrowers and the
Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

 

(c) Drawings and Reimbursements; Funding of Participations.

 

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a
drawing under such Letter of Credit, the L/C Issuer shall notify the Borrowers
and the Administrative Agent thereof. Not later than 11:00 a.m. on the date of
any payment by the L/C Issuer under a Letter of Credit (each such date, an
“Honor Date”), the Borrowers shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing. If the
Borrowers fail to so reimburse the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Lender’s Applicable Percentage thereof. In such event, the Borrowers shall be
deemed to have requested a Committed Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.2 for the
principal amount of Base Rate Loans, but subject to the amount of the unutilized
portion of the Aggregate Commitments and the conditions set forth in Section 4.2
(other than the delivery of a Committed Loan Notice). Any notice given by the
L/C Issuer or the Administrative Agent pursuant to this Section 2.3(c)(i) may be
given by telephone if immediately confirmed in writing; provided that the lack
of such an immediate confirmation shall not affect the conclusiveness or binding
effect of such notice.

 

(ii) Each Lender shall upon any notice pursuant to Section 2.3(c)(i) make funds
available to the Administrative Agent for the account of the L/C Issuer at the
Administrative Agent’s Office in an amount equal to its Applicable Percentage of
the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified
in such notice by the Administrative Agent, whereupon, subject to the provisions
of Section 2.3(c)(iii), each Lender that so makes funds available shall be
deemed to have made a Base Rate Committed Loan to the Borrowers in such amount.
The Administrative Agent shall remit the funds so received to the L/C Issuer.

 

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Committed Borrowing of Base Rate Loans because the conditions set forth in
Section 4.2 cannot be satisfied or for any other reason, the Borrowers shall be
deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of
the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be
due and payable on

 

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demand (together with interest) and shall bear interest at the Default Rate. In
such event, each Lender’s payment to the Administrative Agent for the account of
the L/C Issuer pursuant to Section 2.3(c)(ii) shall be deemed payment in respect
of its participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under this
Section 2.3.

 

(iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this
Section 2.3(c) to reimburse the L/C Issuer for any amount drawn under any Letter
of Credit, interest in respect of such Lender’s Applicable Percentage of such
amount shall be solely for the account of the L/C Issuer.

 

(v) Each Lender’s obligation to make Committed Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.3(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may have
against the L/C Issuer, any Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Committed Loans
pursuant to this Section 2.3(c) is subject to the conditions set forth in
Section 4.2 (other than delivery by the Borrowers of a Committed Loan Notice).
No such making of an L/C Advance shall relieve or otherwise impair the
obligation of any Borrower to reimburse the L/C Issuer for the amount of any
payment made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.

 

(vi) If any Lender fails to make available to the Administrative Agent for the
account of the L/C Issuer any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.3(c) by the time specified in
Section 2.3(c)(ii), the L/C Issuer shall be entitled to recover from such Lender
(acting through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on
which such payment is immediately available to the L/C Issuer at a rate per
annum equal to the greater of the Federal Funds Rate and a rate determined by
the L/C Issuer in accordance with banking industry rules on interbank
compensation. A certificate of the L/C Issuer submitted to any Lender (through
the Administrative Agent) with respect to any amounts owing under this clause
(vi) shall be conclusive absent manifest error.

 

(d) Repayment of Participations.

 

(i) At any time after the L/C Issuer has made a payment under any Letter of
Credit and has received from any Lender such Lender’s L/C Advance in respect of
such payment in accordance with Section 2.3(c), if the Administrative Agent
receives for the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from any Borrower or
otherwise, including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to such Lender
its Applicable Percentage thereof (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s L/C
Advance was outstanding) in the same funds as those received by the
Administrative Agent.

 

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(ii) If any payment received by the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.3(c)(i) is required to be returned under any of
the circumstances described in Section 10.5 (including pursuant to any
settlement entered into by the L/C Issuer in its discretion), each Lender shall
pay to the Administrative Agent for the account of the L/C Issuer its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such Lender,
at a rate per annum equal to the Federal Funds Rate from time to time in effect.
The obligations of the Lenders under this clause shall survive the payment in
full of the Obligations and the termination of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

Each Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with any

 

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Borrower’s instructions or other irregularity, such Borrower will immediately
notify the L/C Issuer. Each Borrower shall be conclusively deemed to have waived
any such claim against the L/C Issuer and its correspondents unless such notice
is given as aforesaid.

 

(f) Role of L/C Issuer. Each Lender and each Borrower agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable; (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. Each Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude such Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of the L/C Issuer shall
be liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.3(e); provided, however, that anything in such clauses to the
contrary notwithstanding, any Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to such Borrower, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary, damages
suffered by such Borrower which such Borrower proves were caused by the L/C
Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.

 

(g) Cash Collateral. Upon the request of the Administrative Agent, (i) (A) if
the L/C Issuer has honored any full or partial drawing request under any Letter
of Credit and such drawing has resulted in an L/C Borrowing, or (B) if, as of
the Letter of Credit Expiration Date, any L/C Obligation for any reason remains
outstanding, the Borrowers shall, in each case, immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations and (ii) if, ten days prior
to the Maturity Date, any L/C Obligation remains outstanding with respect to any
Letter of Credit stated to expire beyond the Letter of Credit Expiration Date,
the Borrowers shall immediately Cash Collateralize the then Outstanding Amount
of all such L/C Obligations. Sections 2.5 and 8.2(c) set forth certain
additional requirements to deliver Cash Collateral hereunder. For purposes of
this Section 2.3, Section 2.5 and Section 8.2(c), “Cash Collateralize” means to
pledge and deposit with or deliver to the Administrative Agent, for the benefit
of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash
or deposit account

 

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balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. Each Borrower hereby
grants to the Administrative Agent, for the benefit of the L/C Issuer and the
Lenders, a security interest in all such cash, deposit accounts and all balances
therein and all proceeds of the foregoing. Cash Collateral shall be maintained
in blocked, non-interest bearing deposit accounts at Bank of America.

 

(h) Applicability of ISP and UCP. Unless otherwise expressly agreed by the L/C
Issuer and the Borrowers when a Letter of Credit is issued, (i) the rules of the
ISP shall apply to each standby Letter of Credit, and (ii) 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 shall apply to
each commercial Letter of Credit.

 

(i) Letter of Credit Fees. The Borrowers shall pay to the Administrative Agent
for the account of each Lender in accordance with its Applicable Percentage a
Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit
equal to the relevant (i.e., for standby Letters of Credit or commercial Letters
of Credit) Applicable Rate times the daily amount available to be drawn under
such Letter of Credit. For purposes of computing the daily amount available to
be drawn under any Letter of Credit, the amount of such Letter of Credit shall
be determined in accordance with Section 1.6. Letter of Credit Fees shall be (i)
computed on a quarterly basis in arrears and (ii) due and payable on the fourth
Business Day of each April, July, October and January, commencing with the first
such date to occur after the issuance of such Letter of Credit, on the Letter of
Credit Expiration Date and thereafter on demand. If there is any change in the
Applicable Rate during any quarter, the daily amount available to be drawn under
each Letter of Credit shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in
effect. Notwithstanding anything to the contrary contained herein, upon the
request of the Required Lenders, while any Event of Default exists, all Letter
of Credit Fees shall accrue at the Default Rate.

 

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.
The Borrowers shall pay directly to the L/C Issuer for its own account a
fronting fee (i) with respect to each commercial Letter of Credit, at a rate
separately agreed between the Borrowers and the L/C Issuer, and (ii) with
respect to each standby Letter of Credit, in an amount equal to 0.125% per
annum, computed on the daily amount available to be drawn under such Letter of
Credit on a quarterly basis in arrears. Such fronting fees shall be due and
payable on the tenth Business Day after the end of each March, June, September
and December in respect of the most recently-ended quarterly period (or portion
thereof, in the case of the first payment), commencing with the first such date
to occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. For purposes of computing the daily
amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.6. In
addition, the Borrowers shall pay directly to the L/C Issuer for its own account
the customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the L/C Issuer relating to letters of
credit as from time to time in effect. Such customary fees and standard costs
and charges are due and payable on demand and are nonrefundable.

 

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

 

(l) 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, the Borrowers shall be obligated to
reimburse the L/C Issuer hereunder for any and all drawings under such Letter of
Credit. Each Borrower hereby acknowledges that the issuance of Letters of Credit
for the account of Subsidiaries inures to the benefit of the Borrowers, and that
the Borrowers’ business derives substantial benefits from the businesses of such
Subsidiaries.

 

2.4 Swing Line Loans.

 

(a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Lenders
set forth in this Section 2.4, to make loans (each such loan, a “Swing Line
Loan”) to the Borrowers from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Applicable Percentage of the Outstanding
Amount of Committed Loans and L/C Obligations of the Lender acting as Swing Line
Lender, may exceed the amount of such Lender’s Commitment; provided, however,
that after giving effect to any Swing Line Loan, (i) the Total Outstandings
shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender’s Commitment, and provided, further, that no Borrower
shall use the proceeds of any Swing Line Loan to refinance any outstanding Swing
Line Loan. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrowers may borrow under this Section 2.4, prepay under
Section 2.5, and reborrow under this Section 2.4. Each Swing Line Loan shall be
a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Swing Line Lender a risk participation in such Swing Line Loan
in an amount equal to the product of such Lender’s Applicable Percentage times
the amount of such Swing Line Loan.

 

(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrowers’ irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $1,000,000, and (ii) the requested borrowing date, which
shall be a Business Day. Each such telephonic notice must be confirmed promptly
by delivery to the Swing Line Lender and the Administrative Agent of a written
Swing Line Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrowers. Promptly after receipt by the Swing Line Lender of any
telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has also received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of

 

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the contents thereof. Unless the Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the request
of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line
Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan
as a result of the limitations set forth in the proviso to the first sentence of
Section 2.4(a), or (B) that one or more of the applicable conditions specified
in Article IV is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Borrowers at its office by crediting the account of the
Borrowers on the books of the Swing Line Lender in immediately available funds.

 

(c) Refinancing of Swing Line Loans.

 

(i) The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of the Borrowers (which hereby irrevocably authorizes the
Swing Line Lender to so request on its behalf), that each Lender make a Base
Rate Committed Loan in an amount equal to such Lender’s Applicable Percentage of
the amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Committed Loan Notice for
purposes hereof) and in accordance with the requirements of Section 2.2, without
regard to the minimum and multiples specified therein for the principal amount
of Base Rate Loans, but subject to the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.2. The Swing Line Lender
shall furnish the Borrowers with a copy of the applicable Committed Loan Notice
promptly after delivering such notice to the Administrative Agent. Each Lender
shall make an amount equal to its Applicable Percentage of the amount specified
in such Committed Loan Notice available to the Administrative Agent in
immediately available funds for the account of the Swing Line Lender at the
Administrative Agent’s Office not later than 1:00 p.m. on the day specified in
such Committed Loan Notice, whereupon, subject to Section 2.4(c)(ii)), each
Lender that so makes funds available shall be deemed to have made a Base Rate
Committed Loan to the Borrowers in such amount. The Administrative Agent shall
remit the funds so received to the Swing Line Lender.

 

(ii) If for any reason any Swing Line Loan cannot be refinanced by such a
Committed Borrowing in accordance with Section 2.4(c)(i), the request for Base
Rate Committed Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Lenders fund its risk participation in the relevant Swing Line Loan and each
Lender’s payment to the Administrative Agent for the account of the Swing Line
Lender pursuant to Section 2.4(c)(i) shall be deemed payment in respect of such
participation.

 

(iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.4(c) by the time
specified in Section 2.4(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment

 

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is immediately available to the Swing Line Lender at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by the Swing Line
Lender in accordance with banking industry rules on interbank compensation. A
certificate of the Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (iii)
shall be conclusive absent manifest error.

 

(iv) Each Lender’s obligation to make Committed Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.4(c) shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender, any Borrower or any other
Person for any reason whatsoever, (B) the occurrence or continuance of a
Default, or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing; provided, however, that each Lender’s obligation to
make Committed Loans pursuant to this Section 2.4(c) is subject to the
conditions set forth in Section 4.2. No such funding of risk participations
shall relieve or otherwise impair the obligation of any Borrower to repay Swing
Line Loans, together with interest as provided herein.

 

(d) Repayment of Participations.

 

(i) At any time after any Lender has purchased and funded a risk participation
in a Swing Line Loan, if the Swing Line Lender receives any payment on account
of such Swing Line Loan, the Swing Line Lender will distribute to such Lender
its Applicable Percentage of such payment (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
risk participation was funded) in the same funds as those received by the Swing
Line Lender.

 

(ii) If any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.5 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate. The Administrative Agent will make such
demand upon the request of the Swing Line Lender. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be
responsible for invoicing the Borrowers for interest on the Swing Line Loans.
Until each Lender funds its Base Rate Committed Loan or risk participation
pursuant to this Section 2.4 to refinance such Lender’s Applicable Percentage of
any Swing Line Loan, interest in respect of such Applicable Percentage shall be
solely for the account of the Swing Line Lender.

 

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

 

2.5 Prepayments.

 

(a) The Borrowers may, upon notice to the Administrative Agent, at any time or
from time to time voluntarily prepay Committed Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 11:00 a.m. (A) three Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Committed Loans; (ii) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed
Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Committed Loans to be prepaid. The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and
of the amount of such Lender’s Applicable Percentage of such prepayment. If such
notice is given by the Borrowers, the Borrowers shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied
by all accrued interest on the amount prepaid, together with any additional
amounts required pursuant to Section 3.5. Each such prepayment shall be applied
to the Committed Loans of the Lenders in accordance with their respective
Applicable Percentages.

 

(b) The Borrowers may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the date of the prepayment, and (ii) any such
prepayment shall be in a minimum principal amount of $100,000. Each such notice
shall specify the date and amount of such prepayment. If such notice is given by
the Borrowers, the Borrowers shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.

 

(c) If for any reason the Total Outstandings at any time exceed the Aggregate
Commitments then in effect, the Borrowers shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided, however, that the Borrowers shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section 2.5(c) unless after
the prepayment in full of the Loans the Total Outstandings exceed the Aggregate
Commitments then in effect.

 

2.6 Termination or Reduction of Commitments. The Borrowers may, upon notice to
the Administrative Agent, terminate the Aggregate Commitments, or from time to
time permanently reduce the Aggregate Commitments; provided that (i) any such
notice shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $10,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall

 

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not terminate or reduce the Aggregate Commitments if, after giving effect
thereto and to any concurrent prepayments hereunder, the Total Outstandings
would exceed the Aggregate Commitments, and (iv) if, after giving effect to any
reduction of the Aggregate Commitments, the Letter of Credit Sublimit or the
Swing Line Sublimit exceeds the amount of the Aggregate Commitments, such
Sublimit shall be automatically reduced by the amount of such excess. The
Administrative Agent will promptly notify the Lenders of any such notice of
termination or reduction of the Aggregate Commitments. Any reduction of the
Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Applicable Percentage. All fees accrued until the effective
date of any termination of the Aggregate Commitments shall be paid on the
effective date of such termination.

 

2.7 Repayment of Loans.

 

(a) The Borrowers shall repay to the Lenders on the Maturity Date the aggregate
principal amount of Committed Loans outstanding on such date.

 

(b) The Borrowers shall repay each Swing Line Loan on the earlier to occur of
(i) the date ten (10) Business Days after such Loan is made and (ii) the
Maturity Date.

 

2.8 Interest.

 

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

 

(b) (i) If any amount payable by any Borrower under any Loan Document is not
paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

 

(ii) While any Event of Default exists, the Borrowers shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws.

 

(iii) Accrued and unpaid interest on past due amounts (including interest on
past due interest) shall be due and payable upon demand.

 

(c) Interest on each Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified
herein. Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

 

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2.9 Fees. In addition to certain fees described in subsections (i) and (j) of
Section 2.3:

 

(a) Commitment Fee. The Borrowers shall pay to the Administrative Agent for the
account of each Lender in accordance with its Applicable Percentage, a
commitment fee equal to the Applicable Rate times the actual daily amount by
which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of
Committed Loans and (ii) the Outstanding Amount of L/C Obligations. The
commitment fee shall accrue at all times during the Availability Period,
including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date or any
earlier date on which the Aggregate Commitments shall terminate. The commitment
fee shall be calculated quarterly in arrears, and if there is any change in the
Applicable Rate during any quarter, the actual daily amount shall be computed
and multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.

 

(b) Other Fees. (i) The Borrowers shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.

 

(ii) The Borrowers shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.

 

2.10 Computation of Interest and Fees. All computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on
the basis of a 365-day year). Interest shall accrue on each Loan for the day on
which the Loan is made, and shall not accrue on a Loan, or any portion thereof,
for the day on which the Loan or such portion is paid, provided that any Loan
that is repaid on the same day on which it is made shall, subject to Section
2.12(a), bear interest for one day. Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.

 

2.11 Evidence of Debt.

 

(a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrowers and
the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of any
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict

 

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between the accounts and records maintained by any Lender and the accounts and
records of the Administrative Agent in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error. Upon the request of any Lender made through the Administrative Agent, the
Borrowers shall execute and deliver to such Lender (through the Administrative
Agent) a Note, which shall evidence such Lender’s Loans in addition to such
accounts or records. Each Lender may attach schedules to its Note and endorse
thereon the date, Type (if applicable), amount and maturity of its Loans and
payments with respect thereto.

 

(b) In addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans. In the event of any
conflict between the accounts and records maintained by the Administrative Agent
and the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the absence of
manifest error.

 

2.12 Payments Generally; Administrative Agent’s Clawback.

 

(a) General. All payments to be made by any Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by any Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent’s
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender’s Lending Office. All payments received by the Administrative Agent after
2:00 p.m. shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue. If any payment to be made
by any Borrower shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.

 

(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Committed Borrowing of Eurodollar Rate Loans (or, in the
case of any Committed Borrowing of Base Rate Loans, prior to 12:00 noon on the
date of such Committed Borrowing) that such Lender will not make available to
the Administrative Agent such Lender’s share of such Committed Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.2 (or, in the case of a Committed
Borrowing of Base Rate Loans, that such Lender has made such share available in
accordance with and at the time required by Section 2.2) and may, in reliance
upon such assumption, make available to the Borrowers a corresponding amount. In
such event, if a Lender has not in fact made its share of the applicable
Committed Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrowers severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount in immediately available funds
with interest thereon, for each day from and including the date such amount is
made available to the

 

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Borrowers to but excluding the date of payment to the Administrative Agent, at
(A) in the case of a payment to be made by such Lender, the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation and (B) in the
case of a payment to be made by the Borrowers, the interest rate applicable to
Base Rate Loans. If the Borrowers and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to the Borrowers the amount of such interest paid by
the Borrowers for such period. If such Lender pays its share of the applicable
Committed Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Committed Loan included in such Committed Borrowing.
Any payment by any Borrower shall be without prejudice to any claim such
Borrower may have against a Lender that shall have failed to make such payment
to the Administrative Agent.

 

(ii) Payments by Borrowers; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrowers prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the L/C Issuer hereunder that the Borrowers will not make such
payment, the Administrative Agent may assume that the Borrowers have made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the
amount due. In such event, if the Borrowers have not in fact made such payment,
then each of the Lenders or the L/C Issuer, as the case may be, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or the L/C Issuer, in immediately available funds
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.

 

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

 

(c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as
provided in the foregoing provisions of this Article II, and such funds are not
made available to the Borrowers by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Article IV are not
satisfied or waived in accordance with the terms hereof, the Administrative
Agent shall return such funds (in like funds as received from such Lender) to
such Lender, without interest.

 

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Committed Loans, to fund participations in Letters of Credit and Swing Line
Loans and to make payments pursuant to Section 10.4(c) are several and not
joint. The failure of any Lender to make any Committed Loan, to fund any such
participation or to make any payment under Section 10.4(c) on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Committed Loan, to purchase its participation or to
make its payment under Section 10.4(c).

 

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(e) Funding Source. Nothing herein shall be deemed to obligate any Lender to
obtain the funds for any Loan in any particular place or manner or to constitute
a representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

 

2.13 Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Committed Loans made by it, or the
participations in L/C Obligations or in Swing Line Loans held by it resulting in
such Lender’s receiving payment of a proportion of the aggregate amount of such
Committed Loans or participations and accrued interest thereon greater than its
pro rata share thereof as provided herein, then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Committed Loans and
subparticipations in L/C Obligations and Swing Line Loans of the other Lenders,
or make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Committed Loans and other amounts owing them, provided that:

 

(i) if any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and

 

(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by any Borrower pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Committed Loans
or subparticipations in L/C Obligations or Swing Line Loans to any assignee or
participant, other than to any Borrower or any Subsidiary thereof (as to which
the provisions of this Section shall apply).

 

Each Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of such Borrower in the amount of
such participation.

 

2.14 Increase in Commitments.

 

(a) Request for Increase. Provided there exists no Default, upon written notice
to the Administrative Agent and the Lenders, the Borrowers may from time to
time, request an increase in the Aggregate Commitments by an amount (for all
such requests) not exceeding $75,000,000;

 

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provided that (i) any such request for an increase shall be in a minimum amount
of $5,000,000, and (ii) the Borrowers may make a maximum of five such requests.
At the time of sending such notice, the Borrowers (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than ten Business Days
from the date of delivery of such notice to the Lenders).

 

(b) Lender Elections to Increase. Each Lender shall notify the Administrative
Agent in writing within such time period whether or not it agrees to increase
its Commitment and, if so, whether by an amount equal to, greater than, or less
than its Applicable Percentage of such requested increase. Any Lender not
responding within such time period shall be deemed to have declined to increase
its Commitment.

 

(c) Notification by Administrative Agent; Additional Lenders. The Administrative
Agent shall notify the Borrowers and each Lender of the Lenders’ responses to
each request made hereunder. In the event that the Lenders do not express
willingness to increase their Commitments in an amount equal to the amount
requested by the Borrowers, to achieve the full amount of a requested increase
and subject to the approval of the Administrative Agent and the L/C Issuer
(which approvals shall not be unreasonably withheld), the Borrowers may also
invite additional Eligible Assignees to become Lenders pursuant to a joinder
agreement in form and substance satisfactory to the Administrative Agent and its
counsel.

 

(d) Effective Date and Allocations. If the Aggregate Commitments are increased
in accordance with this Section, the Administrative Agent and the Borrowers
shall determine the effective date (the “Increase Effective Date”) and the final
allocation of such increase. The Administrative Agent shall promptly notify the
Borrowers and the Lenders of the final allocation of such increase and the
Increase Effective Date.

 

(e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, (i) the Borrowers shall deliver to the Administrative Agent a
certificate of each Loan Party dated as of the Increase Effective Date (in
sufficient copies for each Lender) signed by a Responsible Officer of such Loan
Party (A) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase, and (B) in the case of the Borrowers,
certifying that, before and after giving effect to such increase, (1) the
representations and warranties contained in Article V and the other Loan
Documents are true and correct on and as of the Increase Effective Date, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Section 2.14, the representations and
warranties contained in subsections (a) and (b) of Section 5.5 shall be deemed
to refer to the most recent statements furnished pursuant to clauses (a) and
(b), respectively, of Section 6.1, and (2) no Default exists, (ii) counsel for
the Borrowers shall have provided to the Administrative Agent a supplemental
opinion in form and substance reasonably satisfactory to the Administrative
Agent and (iii) the Borrowers, the Lenders and any such additional Eligible
Assignees shall otherwise have executed and delivered such other instruments and
documents as the Administrative Agent shall have reasonably requested in
connection with such increase. The Borrowers shall prepay any Committed Loans
outstanding on the Increase Effective Date (and pay any additional amounts
required pursuant to Section 3.5) to the extent necessary to keep the
outstanding Committed Loans ratable with any revised Applicable Percentages
arising from any nonratable increase in the Commitments under this Section.

 

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(f) Conflicting Provisions. This Section shall supersede any provisions in
Sections 2.13 or 10.1 to the contrary.

 

2.15 Collateral Security and Guaranties.

 

(a) The Obligations shall be secured by a perfected first priority security
interest (subject only to Liens permitted by Section 7.1 entitled to priority
under applicable law) in all present and future Equity Interests of each
Borrower’s present and future Domestic Subsidiaries and Material Foreign
Subsidiaries (limited, in the case of each Material Foreign Subsidiary that is a
“controlled foreign corporation” under Section 957 of the Internal Revenue Code,
to a pledge of 66% of the Equity Interests of each such first-tier Material
Foreign Subsidiary to the extent the pledge of any greater percentage would
result in material adverse tax consequences to the Borrowers), whether now owned
or hereafter acquired and all proceeds and products thereof pursuant to the
terms of the Security Documents to which such Borrower is a party.

 

(b) The Obligations shall also be guaranteed pursuant to the terms of the
Guaranty executed by each Domestic Subsidiary, and to the extent no material
adverse tax consequences would result, each Material Foreign Subsidiary. The
Obligations of each of the now existing and future Guarantors under its
respective Guaranty shall be in turn secured by a perfected first priority
security interest (subject only to Liens permitted by Section 7.1 entitled to
priority under applicable law) in all present and future Equity Interests of
each Guarantor’s present and future Domestic Subsidiaries and Material Foreign
Subsidiaries (limited, in the case of each Material Foreign Subsidiary that is a
“controlled foreign corporation” under Section 957 of the Internal Revenue Code,
to a pledge of 66% of the Equity Interests of each such first-tier Material
Foreign Subsidiary to the extent the pledge of any greater percentage would
result in material adverse tax consequences to such Guarantor), whether now
owned or hereafter acquired and all proceeds and products thereof pursuant to
the terms of the Security Documents to which such Guarantor is a party.

 

2.16 Additional Borrowers. At SRC’s option, any Material Domestic Subsidiary
that is a Guarantor may become a Borrower hereunder and a party to the Security
Documents by executing and delivering to the Administrative Agent a counterpart
of a Joinder Agreement, signing allonges to the Notes, and providing such other
documentation as Administrative Agent shall deem appropriate. In such event, the
Administrative Agent is hereby authorized by the parties hereto to amend
Schedule 1.1 to include each such Material Domestic Subsidiary.

 

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.1 Taxes.

 

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of any Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if such Borrower shall be required by
applicable law to deduct any Indemnified

 

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Taxes (including any Other Taxes) from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Borrower shall make such deductions and (iii) the Borrowers shall
timely pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

 

(b) Payment of Other Taxes by the Borrowers. Without limiting the provisions of
subsection (a) above, the Borrowers shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

 

(c) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent, each Lender and the L/C Issuer, within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the L/C Issuer, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrowers by a Lender
or the L/C Issuer (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender or the L/C
Issuer, shall be conclusive absent manifest error.

 

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

 

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which any
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to the Borrowers (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law or reasonably requested by the
Borrowers or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any
Lender, if requested by the Borrowers or the Administrative Agent, shall deliver
such other documentation prescribed by applicable law or reasonably requested by
the Borrowers or the Administrative Agent as will enable the Borrowers or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

 

Without limiting the generality of the foregoing, in the event that any Borrower
is resident for tax purposes in the United States, any Foreign Lender shall
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be

 

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

 

(i) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a
party,

 

(ii) duly completed copies of Internal Revenue Service Form W-8ECI,

 

(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower
within the meaning of section 881(c)(3)(B) of the Code, or (C) a “controlled
foreign corporation” described in section 881(c)(3)(C) of the Code and (y) duly
completed copies of Internal Revenue Service Form W-8BEN, or

 

(iv) any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit the Borrowers to determine the withholding or deduction
required to be made.

 

(f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or the
L/C Issuer determines, in its sole discretion, that it has received a refund of
any Taxes or Other Taxes as to which it has been indemnified by any Borrower or
with respect to which any Borrower has paid additional amounts pursuant to this
Section, it shall pay to such Borrower an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by such
Borrower under this Section with respect to the Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses of the Administrative Agent,
such Lender or the L/C Issuer, as the case may be, and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund), provided that the Borrowers, upon the request of the
Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount
paid over to any Borrower (plus any penalties, interest or other charges imposed
by the relevant Governmental Authority) to the Administrative Agent, such Lender
or the L/C Issuer in the event the Administrative Agent, such Lender or the L/C
Issuer is required to repay such refund to such Governmental Authority. This
subsection shall not be construed to require the Administrative Agent, any
Lender or the L/C Issuer to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to any Borrower or
any other Person.

 

3.2 Illegality. If any Lender determines that any Law has made it unlawful, or
that any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Eurodollar Rate
Loans, or to determine or charge interest rates based upon the Eurodollar Rate,
or any Governmental Authority has imposed

 

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material restrictions on the authority of such Lender to purchase or sell, or to
take deposits of, Dollars in the London interbank market, then, on notice
thereof by such Lender to the Borrowers through the Administrative Agent, any
obligation of such Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Committed Loans to Eurodollar Rate Loans shall be suspended
until such Lender notifies the Administrative Agent and the Borrowers that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, the Borrowers shall, upon demand from such Lender (with a copy to
the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Borrowers shall also pay accrued interest on the
amount so prepaid or converted.

 

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

 

3.4 Increased Costs; Reserves on Eurodollar Rate Loans.

 

(a) Increased Costs Generally. If any Change in Law shall:

 

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except any reserve requirement contemplated by Section 3.4(e)) or the L/C
Issuer;

 

(ii) subject any Lender or the L/C Issuer to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter
of Credit or any Eurodollar Rate Loan made by it, or change the basis of
taxation of payments to such Lender or the L/C Issuer in respect thereof (except
for Indemnified Taxes or Other Taxes covered by Section 3.1 and the imposition
of, or any change in the rate of, any Excluded Tax payable by such Lender or the
L/C Issuer); or

 

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

 

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

 

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

 

(c) Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer
setting forth the amount or amounts necessary to compensate such Lender or the
L/C Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrowers shall be
conclusive absent manifest error. The Borrowers shall pay such Lender or the L/C
Issuer, as the case may be, the amount shown as due on any such certificate
within 10 days after receipt thereof.

 

(d) Delay in Requests. Failure or delay on the part of any Lender or the L/C
Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation, provided that the Borrowers shall not be required
to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more than
nine months prior to the date that such Lender or the L/C Issuer, as the case
may be, notifies the Borrowers of the Change in Law giving rise to such
increased costs or reductions and of such

 

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Lender’s or the L/C Issuer’s intention to claim compensation therefor (except
that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the nine-month period referred to above shall be extended to
include the period of retroactive effect thereof).

 

(e) Reserves on Eurodollar Rate Loans. The Borrowers shall pay to each Lender,
as long as such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as “Eurocurrency liabilities”), additional interest on the
unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs
of such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be
due and payable on each date on which interest is payable on such Loan, provided
the Borrowers shall have received at least 10 days’ prior notice (with a copy to
the Administrative Agent) of such additional interest from such Lender. If a
Lender fails to give notice 10 days prior to the relevant Interest Payment Date,
such additional interest shall be due and payable 10 days from receipt of such
notice.

 

3.5 Compensation for Losses. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrowers shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

 

(a) any continuation, conversion, payment or prepayment of any Loan other than a
Base Rate Loan on a day other than the last day of the Interest Period for such
Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);

 

(b) any failure by any Borrower (for a reason other than the failure of such
Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by such Borrower; or

 

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

 

including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrowers shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrowers to the Lenders
under this Section 3.5, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the London interbank eurodollar market
for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.

 

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3.6 Mitigation Obligations; Replacement of Lenders.

 

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.4, or any Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 3.1, or if any Lender gives a notice pursuant to
Section 3.2, then such Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 3.1 or 3.4, as
the case may be, in the future, or eliminate the need for the notice pursuant to
Section 3.2, as applicable, and (ii) in each case, would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The Borrowers hereby agree to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

 

(b) Replacement of Lenders. If any Lender requests compensation under Section
3.4, or if any Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
3.1, the Borrowers may replace such Lender in accordance with Section 10.13.

 

3.7 Survival. Each Borrower’s obligations under this Article III shall survive
termination of the Aggregate Commitments and repayment of all other Obligations
hereunder.

 

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.1 Conditions of Initial Credit Extension. The obligation of the L/C Issuer and
each Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

 

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

 

(i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and each Borrower;

 

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

 

(iii) executed counterparts of each of the other Loan Documents;

 

(iv) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and capacity
of each Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to which such
Loan Party is a party and attaching thereto certified copies of the Organization
Documents of each Loan Party;

 

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(v) such documents and certifications as the Administrative Agent may reasonably
require to evidence that each Loan Party is duly organized or formed, and that
each Loan Party is validly existing, in good standing and qualified to engage in
business in each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, except to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;

 

(vi) a favorable opinion of (A) Goodwin Procter LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender and (B) Cassels
Brock & Blackwell LLP, counsel to Saucony Canada, Inc., in each case, in form
and substance satisfactory to the Administrative Agent;

 

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

 

(viii) a certificate signed by a Responsible Officer of the Borrowers certifying
(A) that the conditions specified in Sections 4.2(a) and (b) have been satisfied
and (B) certifying as to the calculation of Consolidated EBITDA specified in
clause (xvi) below;

 

(ix) a duly completed Compliance Certificate as of the last day of the last
fiscal quarter ended for each of SRC and Target, with the Consolidated Leverage
Ratio and Consolidated Tangible Net Worth therein to be calculated on a pro
forma basis giving effect to the Acquisition, signed by a Responsible Officer of
the Borrowers;

 

(x) (A) evidence that all insurance required to be maintained pursuant to the
Loan Documents has been obtained and is in effect and (B) certificates of
insurance from an independent insurance broker dated as of the Closing Date,
identifying insurers, types of insurance, insurance limits, and policy terms,
and otherwise describing the insurance obtained in accordance with this
Agreement;

 

(xi) payoff letters evidencing that the Existing Credit Agreements have been or
concurrently with the Closing Date are being terminated and all Liens securing
obligations under the Existing Credit Agreements have been or concurrently with
the Closing Date are being released;

 

(xii) a certificate signed by a Responsible Officer of the Borrowers attaching
true and complete copies of the Acquisition Documents;

 

(xiii) the Audited Financial Statements, the unaudited pro forma financial
statements and the forecasts, each referred to in Section 5.5;

 

(xiv) an officer’s certificate signed by the treasurer of SRC and dated as of
the Closing Date as to the solvency of SRC and the Subsidiaries following the
consummation of the Acquisition and the other transactions contemplated hereby;

 

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(xv) results of UCC searches (and the equivalent thereof in all foreign
jurisdictions) with respect to the Collateral, indicating no Liens other than
Liens permitted under Section 7.1 and otherwise in form and substance
satisfactory to the Administrative Agent;

 

(xvi) satisfactory evidence that Consolidated EBITDA (calculated on a pro forma
basis after giving effect to the Acquisition and the other transactions
contemplated hereby) for the twelve months ended as of the last day of the last
fiscal quarter ended for each of SRC and Target, was not less than $62,000,000;

 

(xvii) all stock certificates and related instruments of transfer with respect
to the Equity Interests of each Subsidiary pledged to the Administrative Agent
pursuant to the Pledge Agreement;

 

(xviii) (A) a certificate signed by a Responsible Officer of the Borrowers
certifying (x) the value of SRC and the Subsidiaries of SRC existing immediately
prior to the Acquisition and (y) the value of the Target and (B) a duly
completed Federal Reserve Form U-1; and

 

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

 

(b) The Security Documents shall be effective to create in favor of the
Administrative Agent a legal, valid and enforceable first (except for Liens
permitted by Section 7.1 entitled to priority under applicable law) security
interest in and Lien upon the Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of the
Administrative Agent to protect and preserve such security interests shall have
been duly effected. The Administrative Agent shall have received evidence
thereof in form and substance satisfactory to the Administrative Agent.

 

(c) The Acquisition shall have been consummated in accordance with the terms of
the Acquisition Documents (as amended or modified with the consent of the
Lenders as required below) and in compliance with applicable law and regulatory
approvals and the terms and conditions of the Acquisition Documents shall not
have been altered, amended or otherwise changed or supplemented or any condition
therein waived without the prior written consent of the Lenders.

 

(d) All applicable waiting periods without any action being taken by any
authority that could restrain, prevent or impose any material adverse conditions
on the Borrowers and the Subsidiaries in connection with the Acquisition and the
other transactions contemplated hereby or that could seek or threaten any of the
foregoing shall have expired.

 

(e) No event or circumstance since June 1, 2005 shall have occurred that has had
or could be reasonably expected to have, either individually or in the
aggregate, a Closing Material Adverse Effect or a Target Material Adverse
Effect.

 

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(f) No changes or developments shall have occurred, and no new or additional
information, shall have been received or discovered by the Administrative Agent
or the Lenders regarding any Borrower, the Target and/or their respective
Subsidiaries or the Acquisition after June 1, 2005 that purports to materially
and adversely affect the Acquisition or the other transactions contemplated
hereby.

 

(g) The Lenders shall have received satisfactory evidence of the absence of any
action, suit, investigation or proceeding pending or, to the knowledge of the
Borrowers, threatened in any court or before any arbitrator or governmental
authority that would reasonably be expected to have a Material Adverse Effect.

 

(h) The Lenders shall have received satisfactory evidence that all loans made by
the Lenders to the Borrowers or any of its affiliates shall be in full
compliance with the Federal Reserve’s margin regulations.

 

(i) The Lenders shall be satisfied that (i) each Borrower, the Target and their
respective Subsidiaries will be able to meet its obligations under all Plans,
(ii) the Plans are, in all material respects, funded in accordance with the
minimum statutory requirements, and (iii) no ERISA Event has occurred.

 

(j) Any fees required to be paid on or before the Closing Date shall have been
paid.

 

(k) Unless waived by the Administrative Agent, the Borrowers shall have paid all
fees, charges and disbursements of counsel to the Administrative Agent to the
extent invoiced prior to or on the Closing Date, plus such additional amounts of
such fees, charges and disbursements as shall constitute its reasonable estimate
of such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrowers and the
Administrative Agent).

 

(l) The Closing Date shall have occurred on or before November 30, 2005.

 

Without limiting the generality of the provisions of Section 9.4, for purposes
of determining compliance with the conditions specified in this Section 4.1,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

 

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

 

(a) The representations and warranties of each Borrower contained in Article V
or any other Loan Document, or which are contained in any document furnished at
any time under or in connection herewith or therewith, shall be true and correct
on and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that for
purposes of this Section 4.2, the representations and warranties contained in
subsections (a) and (b) of Section 5.5 shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.1.

 

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

 

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

 

Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Committed Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by any Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.2(a) and
(b) have been satisfied on and as of the date of the applicable Credit
Extension.

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

Each Borrower represents and warrants to the Administrative Agent and the
Lenders that:

 

5.1 Existence, Qualification and Power; Compliance with Laws. Each Loan Party
(a) is duly organized or formed, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own or lease its assets and carry
on its business and (ii) execute, deliver and perform its obligations under the
Loan Documents to which it is a party, (c) is duly qualified and is licensed and
in good standing under the Laws of each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.

 

5.2 Authorization; No Contravention. The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to
be made under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its
Subsidiaries or (ii) any order, injunction,

 

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writ or decree of any Governmental Authority or any arbitral award to which such
Person or its property is subject; or (c) violate any Law. Each Loan Party is in
compliance with all Contractual Obligations referred to in clause (b)(i), except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

5.3 Governmental Authorization; Other Consents. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.

 

5.4 Binding Effect. This Agreement has been, and each other Loan Document, when
delivered hereunder, will have been, duly executed and delivered by each Loan
Party that is party thereto. This Agreement constitutes, and each other Loan
Document when so delivered will constitute, a legal, valid and binding
obligation of such Loan Party, enforceable against each Loan Party that is party
thereto in accordance with its terms.

 

5.5 Financial Statements; No Material Adverse Effect; No Internal Control Event.

 

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of the
Borrowers and the Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Borrowers and the Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and Indebtedness.

 

(b) The unaudited consolidated balance sheets of the Borrowers and the
Subsidiaries and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for the twelve month period ended March 4,
2005 giving pro forma effect to the Acquisition and the other transactions
contemplated hereby (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, and (ii) fairly present the pro forma financial condition of the
Borrowers and the Subsidiaries as of the date thereof and their pro forma
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments. Schedule 5.5 sets forth all material indebtedness and other
liabilities, direct or contingent, of the Borrowers and the Subsidiaries as of
the date of such financial statements, including liabilities for taxes, material
commitments and Indebtedness.

 

(c) (a) On and as of the Closing Date, since June 1, 2005, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Closing Material Adverse Effect or a
Target Material Adverse Effect and (b) from and after the Closing Date, no event
or circumstance shall have occurred, either individually or in the aggregate,
that has had or could reasonably be expected to have a Material Adverse Effect.

 

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(d) Since the date of the Audited Financial Statements, no Internal Control
Event has occurred that has had or could reasonably be expected to have a
Material Adverse Effect.

 

(e) The consolidated forecasted balance sheet and statements of income and cash
flows of the Borrowers and the Subsidiaries, dated June 2005, delivered to the
Administrative Agent and the Lenders and each subsequent consolidated forecasted
balance sheet and statements of income and cash flows of the Borrowers and the
Subsidiaries delivered pursuant to Section 6.1(c) were prepared in good faith on
the basis of the assumptions stated therein, which assumptions were reasonable
in light of the conditions existing at the time of delivery of such forecasts.

 

5.6 Litigation. There are no actions, suits, proceedings, claims or disputes
pending or, to the knowledge of any Borrower after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against any Borrower or any Subsidiary
or against any of their properties or revenues that (a) purport to affect or
pertain to this Agreement or any other Loan Document, or any of the transactions
contemplated hereby, or (b) except as specifically disclosed in Schedule 5.6,
either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect, and there has been no
adverse change in the status, or financial effect on any Loan Party or any
Subsidiary thereof, of the matters described on Schedule 5.6, that has had or
could reasonably be expected to have a Material Adverse Effect.

 

5.7 No Default. No Borrower nor any Subsidiary is in default under or with
respect to any Contractual Obligation that could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. No Default
has occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.

 

5.8 Ownership of Property; Liens. Each Borrower and each Subsidiary has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary to the conduct of its business, except for such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The property of the Borrowers and
the Subsidiaries is subject to no Liens, other than Liens permitted by Section
7.1.

 

5.9 Environmental Compliance. Each Borrower and the Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental
Laws and claims alleging potential liability or responsibility for violation of
any Environmental Law on their respective businesses, operations and properties,
and as a result thereof each Borrower has reasonably concluded that, except as
specifically disclosed in Schedule 5.9, such Environmental Laws and claims could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

5.10 Insurance. The properties of each Borrower and the Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of any
Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where such Borrower or the applicable
Subsidiary operates.

 

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5.11 Taxes. Each Borrower and the Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against any Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect. Neither any Loan Party nor any Subsidiary thereof is
party to any tax sharing agreement.

 

5.12 ERISA Compliance.

 

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

 

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

 

(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) no Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) no Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) no Borrower nor any ERISA Affiliate has
engaged in a transaction that could be subject to Sections 4069 or 4212(c) of
ERISA.

 

5.13 Subsidiaries; Equity Interests. After giving effect to the Acquisition and
the other transactions contemplated hereby, no Borrower has any Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13 (as such
schedule may be amended with the consent of the Administrative Agent), and all
of the outstanding Equity Interests in such Subsidiaries have been validly
issued, are fully paid and nonassessable and are owned by a Loan Party or a
Subsidiary in the amounts specified on Part (a) of Schedule 5.13 free and clear
of all Liens. No Loan Party or Subsidiary has any equity investments in any
other corporation or

 

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entity other than those specifically disclosed in Part (b) of Schedule 5.13 (as
such schedule may be amended with the consent of the Administrative Agent). Part
(c) of Schedule 5.13 lists all Guarantors. All of the outstanding Equity
Interests in SRC have been validly issued and are fully paid and nonassessable.

 

5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company
Act.

 

(a) No Borrower is engaged or will 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 Borrowers only or of the
Borrowers and the Subsidiaries on a consolidated basis) subject to the
provisions of Section 7.1 or Section 7.5 or subject to any restriction contained
in any agreement or instrument between any Borrower and any Lender or any
Affiliate of any Lender relating to Indebtedness and within the scope of Section
8.1(e) will be margin stock.

 

(b) None of the Borrowers, any Person Controlling any Borrower, or any
Subsidiary (i) is a “holding company,” or a “subsidiary company” of a “holding
company,” or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company,” within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an “investment
company” under the Investment Company Act of 1940.

 

5.15 Disclosure. The Borrowers have disclosed to the Administrative Agent and
the Lenders all agreements, instruments and corporate or other restrictions to
which it or any Subsidiary is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any Loan
Party to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrowers represent only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

 

5.16 Compliance with Laws. Each Borrower and each Subsidiary is in compliance in
all material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its properties, except in such
instances in which (a) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

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5.17 Intellectual Property; Licenses, Etc. Each Borrower and the Subsidiaries
own, or possess the right to use, all of the trademarks, service marks, trade
names, copyrights, patents, patent rights, franchises, licenses and other
intellectual property rights (collectively, “IP Rights”) that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person. To the best knowledge of the Borrowers, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any Borrower
or any Subsidiary infringes upon any rights held by any other Person. Except as
specifically disclosed in Schedule 5.17, no claim or litigation regarding any of
the foregoing is pending or, to the best knowledge of the Borrowers, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.

 

5.18 Use of Proceeds. The proceeds of Loans shall be used to (i) finance in part
the Acquisition, (ii) pay fees and expenses incurred in connection with the
Acquisition and the other transactions contemplated hereby and (iii) provide
ongoing working capital and for other general corporate purposes of the
Borrowers and the Subsidiaries.

 

5.19 Solvency. As of the Closing Date and after giving effect to Acquisition,
the initial Loans hereunder and the other transactions contemplated hereby:

 

(a) the aggregate value of all properties of the Borrowers and the Subsidiaries
at their present fair saleable value exceed the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities) of the Borrowers and the Subsidiaries as they become absolute and
mature;

 

(b) the present fair saleable value of the assets of the Borrowers and the
Subsidiaries, on a consolidated basis is not less than the amount that will be
required to pay the probable liability on their debts as they become absolute
and mature;

 

(c) the Borrowers and the Subsidiaries will not, on a consolidated basis, have a
unreasonably small capital with which to conduct their business operations as
heretofore conducted; and

 

(d) the Borrowers and the Subsidiaries will not, on a consolidated basis, incur
debts or liabilities beyond their ability to pay such debts and liabilities as
they mature.

 

5.20 Perfection of Security Interest. All filings, assignments, pledges and
deposits of documents or instruments have been made and all other actions have
been taken that are necessary or advisable, under applicable law, to establish
and perfect the Administrative Agent’s security interest in the Collateral,
unless the Administrative Agent has agreed not to make such filings,
assignments, pledges and deposits of documents or instruments. The Collateral
and the Administrative Agent’s rights with respect to the Collateral are not
subject to any setoff, claims, withholdings or other defenses. A Borrower, or a
Subsidiary party to one of the Security Documents, is the owner of the
Collateral free from any Lien, except for Liens permitted by Section 7.1. No
consents, approvals, authorizations or permit is required in connection with the
granting of the Liens and security interests in the Collateral as contemplated
herein and in the other Loan Documents, or for the perfection or enforcement of
any such Liens or security interests.

 

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5.21 Absence of Financing Statements. Except with respect to Liens permitted by
Section 7.1, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future Lien on any assets or property
of any Borrower or any Subsidiary or any rights relating thereto.

 

5.22 Fiscal Year. Each Borrower and the Subsidiaries have a fiscal year which
ends on the Friday nearest November 30 of each calendar year (each, a “Fiscal
Year”), with fiscal quarters consisting of four (4) thirteen (13) week periods
(each, a “Fiscal Quarter”); provided that once every five Fiscal Years, the last
fiscal quarter of the Borrower and the Subsidiaries consists of fourteen (14)
weeks.

 

5.23 Certain Transactions. Except for arm’s length transactions pursuant to
which any Borrower or any Subsidiary makes payments in the ordinary course of
business upon terms no less favorable than such Borrower or such Subsidiary
could obtain from third parties, none of the officers, directors, or employees
of any Borrower or any Subsidiary is presently a party to any transaction with
any Borrower or any Subsidiary (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.

 

5.24 Federal Tax Identification Numbers. Schedule 5.24 sets forth the federal
tax identification number and state organizational identification number of each
Loan Party.

 

ARTICLE VI

AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, each Borrower shall, and shall (except in the case of
the covenants set forth in Sections 6.1, 6.2, and 6.3) cause each Subsidiary to:

 

6.1 Financial Statements. Deliver to the Administrative Agent and each Lender,
in form and detail satisfactory to the Administrative Agent and the Required
Lenders:

 

(a) as soon as available, but in any event within 90 days after the end of each
Fiscal Year of SRC, a consolidated balance sheet of the SRC and the Subsidiaries
as at the end of such Fiscal Year, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
Fiscal Year, all in reasonable detail and prepared in accordance with GAAP,
audited and accompanied by (i) a report and opinion of a Registered Public
Accounting Firm of nationally recognized standing reasonably acceptable to the
Required Lenders, which

 

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report and opinion shall be prepared in accordance with generally accepted
auditing standards and applicable Securities Laws and shall not be subject to
any “going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit and (ii) an attestation report of such
Registered Public Accounting Firm as to the SRC’s internal controls pursuant to
Section 404 of Sarbanes-Oxley expressing a conclusion to which the Required
Lenders do not object;

 

(b) as soon as available, but in any event within 45 days after the end of each
of the first three Fiscal Quarters of each Fiscal Year of SRC, a consolidated
balance sheet of SRC and the Subsidiaries as at the end of such Fiscal Quarter,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such Fiscal Quarter and for the portion of the SRC’s
Fiscal Year then ended, setting forth in each case in comparative form the
figures for the corresponding Fiscal Quarter of the previous Fiscal Year and the
corresponding portion of the previous Fiscal Year, all in reasonable detail,
certified by a Responsible Officer of SRC as fairly presenting the financial
condition, results of operations, shareholders’ equity and cash flows of the SRC
and the Subsidiaries in accordance with GAAP, subject only to normal year-end
audit adjustments and the absence of footnotes; and

 

(c) concurrently with the delivery of the financial statements referred to in
Section 6.1(a), forecasts prepared by management of SRC, in form satisfactory to
the Administrative Agent and the Required Lenders, of consolidated balance
sheets and statements of income or operations and cash flows of SRC and the
Subsidiaries on an annual basis for the immediately following Fiscal Year
(including the Fiscal Year in which the Maturity Date occurs).

 

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

 

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

 

(a) concurrently with the delivery of the financial statements referred to in
Section 6.1(a), a certificate of its independent certified public accountants
certifying such financial statements and stating that in making the examination
necessary therefor no knowledge was obtained of any Default or, if any such
Default shall exist, stating the nature and status of such event;

 

(b) concurrently with the delivery of the financial statements referred to in
Sections 6.1(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Borrowers;

 

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

 

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(d) promptly after the same are available, copies of each annual report, proxy
or financial statement or other report or communication sent to the stockholders
of any Borrower, and copies of all annual, regular, periodic and special reports
and registration statements which any Borrower may file or be required to file
with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,
and not otherwise required to be delivered to the Administrative Agent pursuant
hereto;

 

(e) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of any Loan Party or any Subsidiary
thereof pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Lenders pursuant to
Section 6.1 or any other clause of this Section 6.2;

 

(f) promptly, and in any event within five Business Days after receipt thereof
by any Loan Party or any Subsidiary thereof, copies of each notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation or
other inquiry by such agency regarding financial or other operational results of
any Loan Party or any Subsidiary thereof; and

 

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

 

Documents required to be delivered pursuant to Section 6.1(a)or (b) or Section
6.2(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 Borrowers post
such documents, or provides a link thereto on the Borrowers’ website on the
Internet at the website address listed on Schedule 10.2; or (ii) on which such
documents are posted on the Borrowers’ behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided that: (i) the Borrowers shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrowers to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrowers shall notify the Administrative Agent and each Lender (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. Notwithstanding anything contained herein, in every
instance the Borrowers shall be required to provide paper copies of the
Compliance Certificates required by Section 6.2(b) 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 any 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.

 

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Each Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders and the L/C Issuer materials and/or
information provided by or on behalf of such 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 may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to any Borrower or its securities) (each, a
“Public Lender”). Each 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,” such Borrower shall be deemed to have authorized
the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat
such Borrower Materials as not containing any material non-public information
with respect to such 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 10.7); (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.”

 

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

 

(a) of the occurrence of any Default;

 

(b) of any matter that has resulted or could reasonably be expected to result in
a Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of any Borrower or any Subsidiary; (ii)
any dispute, litigation, investigation, proceeding or suspension between any
Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting any Borrower or any Subsidiary, including pursuant to any applicable
Environmental Laws;

 

(c) of the occurrence of any ERISA Event;

 

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

 

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(e) of the occurrence of any Internal Control Event;

 

(f) of any setoff, claims, withholdings or other defenses to which any of the
Collateral, or the Administrative Agent’s rights with respect to the Collateral,
are subject; and

 

(g) with respect to each Loan Party, of any change in (i) such Loan Party’s
corporate or company name, (ii) such Loan Party’s jurisdiction of organization
and/or (ii) such Loan Party’s state organizational number (to the extent
applicable); provided that no Loan Party will effect or permit any change
referred to in (i)-(iii) unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Administrative
Agent to continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral.

 

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrowers setting forth details of the occurrence
referred to therein and stating what action the Borrowers have taken and
proposes to take with respect thereto. Each notice pursuant to Section 6.3(a)
shall describe with particularity any and all provisions of this Agreement and
any other Loan Document that have been breached.

 

6.4 Payment of Obligations. Pay and discharge as the same shall become due and
payable, all its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by such Borrower or such Subsidiary; (b) all lawful claims
which, if unpaid, would by law become a Lien upon its property; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.

 

6.5 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full
force and effect its legal existence and good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by Section
7.4 or 7.5; (b) take all reasonable action to maintain all rights, privileges,
permits, licenses and franchises necessary or desirable in the normal conduct of
its business, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (c) preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

 

6.6 Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in
good working order and condition, ordinary wear and tear excepted; (b) make all
necessary repairs thereto and renewals and replacements thereof except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.

 

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6.7 Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of any Borrower, insurance with respect to
its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar circumstances
by such other Persons.

 

6.8 Compliance with Laws and Agreements. Comply in all material respects with
the requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property and all agreements and
instruments which it or any of its properties may be bound, except in such
instances in which (a) such requirement of Law or order, writ, injunction or
decree is being contested in good faith by appropriate proceedings diligently
conducted; or (b) the failure to comply therewith could not reasonably be
expected to have a Material Adverse Effect.

 

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

 

6.10 Inspection Rights. Permit representatives and independent contractors of
the Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at the expense of the Borrowers and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Borrowers; provided, however, that when an Event of
Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrowers at any time during normal business
hours and without advance notice.

 

6.11 Use of Proceeds. Use the proceeds of the Credit Extensions not in
contravention of any Law or any Loan Document and solely for purposes set forth
in Section 5.18.

 

6.12 Additional Guarantors. Notify the Administrative Agent at the time that any
Person becomes a Subsidiary, and promptly thereafter (and in any event within 30
days), cause such Person to (a) become a Guarantor by executing and delivering
to the Administrative Agent a counterpart of the Guaranty or such other document
as the Administrative Agent shall deem appropriate for such purpose (unless such
Subsidiary is (i) a Non-Material Foreign Subsidiary or (ii) a Material Foreign
Subsidiary and such Guaranty would result in material adverse tax consequences
for the Borrowers), (b) deliver to the Administrative Agent documents of the
types referred to in clauses (iv) and (v) of Section 4.1(a) and favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to in clause (a)), all in form, content and scope reasonably
satisfactory to the Administrative Agent, (c) take all steps as may be necessary
or advisable in the opinion of the Administrative Agent to pledge to the
Administrative Agent, for

 

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the benefit of the Lenders and the Administrative Agent, on a perfected,
first-priority basis, all of the Equity Interests of such Subsidiary (unless
such Subsidiary is a Non-Material Foreign Subsidiary) pursuant to a pledge
agreement in form and substance satisfactory to the Administrative Agent
(limited, in the case of each Material Foreign Subsidiary that is a “controlled
foreign corporation” under Section 957 of the Internal Revenue Code, to a pledge
of 66% of the Equity Interests of each such first-tier Material Foreign
Subsidiary to the extent the pledge of any greater percentage would result in
material adverse tax consequences to the Borrowers), and (d) deliver to the
Administrative Agent an amended Schedule 5.13, in form and substance
satisfactory to the Administrative Agent.

 

6.13 Further Assurances. Each Borrower will, and will cause each Subsidiary to,
cooperate with the Administrative Agent and execute such further instruments and
documents as the Administrative Agent shall reasonably request to carry out to
the Administrative Agent’s reasonable satisfaction the transactions contemplated
by this Agreement and the other Loan Documents.

 

6.14 Certificate of Merger. On the Closing Date, the Borrowers will deliver to
the Administrative Agent a Certificate of Merger acknowledged by the Secretary
of State of the Commonwealth of Massachusetts evidencing the Merger.

 

6.15 Termination of Listing. Promptly following the Acquisition, but in any
event no later than the close of the business day on the Closing Date, the
listing of the shares of the Target on NASDAQ shall be terminated.

 

ARTICLE VII

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, no Borrower shall, nor shall it permit any Subsidiary
to, directly or indirectly:

 

7.1 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:

 

(a) Liens pursuant to any Loan Document;

 

(b) Liens existing on the date hereof and listed on Schedule 7.1 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed, (ii) the amount secured or benefited thereby is not increased,
(iii) the direct or any contingent obligor with respect thereto is not changed,
and (iv) any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.3(b);

 

(c) Liens for taxes, assessments or other governmental charges not yet due or
which are being contested in good faith and by appropriate proceedings
diligently conducted, if adequate reserves with respect thereto are maintained
on the books of the applicable Person in accordance with GAAP;

 

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(d) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;

 

(e) pledges or deposits in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;

 

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

 

(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;

 

(h) Liens securing judgments for the payment of money not constituting an Event
of Default under Section 8.1(h);

 

(i) Liens securing Indebtedness permitted under Section 7.3(e); provided that
(i) such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being
acquired on the date of acquisition;

 

(j) Liens on properties to secure claims for labor, material or supplies in
respect of obligations not overdue;

 

(k) Liens in favor of any Borrower on all or part of the assets of the
Subsidiaries securing Indebtedness owing by Subsidiaries to such Borrower;

 

(l) Liens securing Indebtedness permitted under Section 7.3(k); and

 

(m) Liens on documents of title and the property covered thereby securing
Indebtedness that is (i) permitted under Section 7.3(h) and (ii) in respect of
commercial letters of credit.

 

7.2 Investments. Make any Investments, except:

 

(a) marketable direct or guaranteed obligations of the United States of America
that mature within one (1) year from the date of purchase by such Borrower;

 

(b) demand deposits, certificates of deposit, bankers acceptances and time
deposits of United States banks having total assets in excess of $1,000,000,000;

 

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(c) securities commonly known as “ commercial paper” issued by a corporation
organized and existing under the laws of the United States of America, any state
thereof or any country which is a member of the Organization for Economic
Cooperation and Development that at the time of purchase have been rated and the
ratings for which are not less than “P 1” if rated by Moody’s Investors Service,
Inc., or not less than “A 1” if rated by Standard and Poor’s Rating Group;

 

(d) shares of any so-called money market fund which is registered under the
Investment Company Act of 1940, as amended, is in compliance with Rule 2a-7
thereunder and has net assets of at least $250,000,000;

 

(e) marketable direct or guaranteed obligations of a state of the United States
of America or political subdivision thereof that at the time of purchase, if
short-term, have been rated and the ratings for which are not less than “SP 1”
or “A 1” if rated by Standard and Poor’s Rating Group or not less than “MIG 1”
or “VMIG 1” if rated by Moody’s Investors Service, Inc. or, if long-term, have
been rated and the ratings for which are not less than “A” if rated by Standard
and Poor’s Rating Group or not less than A2 if rated by Moody’s Investors
Service, Inc.;

 

(f) shares of so-called “auction rate securities” which have been rated and the
ratings for which are not less than “A” if rated by Standard and Poor’s Rating
Group or not less than A2 if rated by Moody’s Investors Service, Inc.;

 

(g) Investments consisting of Swap Contracts;

 

(h) Investments consisting of promissory notes received as proceeds of
Dispositions permitted by Section 7.5;

 

(i) Investments in Permitted Acquisitions pursuant to Section 7.4(c);

 

(j) advances to officers, directors and employees of any Borrower and any
Subsidiary in an aggregate amount not to exceed $5,000,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;

 

(k) Investments of any Borrower in any Guarantor and Investments of any
Guarantor in any Borrower or in another Guarantor;

 

(l) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss;

 

(m) Guarantees permitted by Section 7.3

 

(n) Investments with respect to Indebtedness permitted by Section 7.3(i) so long
as such entities remain Guarantors; and

 

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(o) other Investments; provided that the amount of all such Investments made
pursuant to this clause (p) from and after the Closing Date shall not, at any
time, exceed $20,000,000.

 

7.3 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

 

(a) Indebtedness under the Loan Documents;

 

(b) Indebtedness outstanding on the date hereof and listed on Schedule 7.3 and
any refinancings, refundings, renewals or extensions thereof; provided that (i)
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and (ii) the terms relating to
principal amount, amortization, maturity, collateral (if any) and subordination
(if any), and other material terms taken as a whole, of any such refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into
and of any instrument issued in connection therewith, are no less favorable in
any material respect to the Loan Parties or the Lenders than the terms of any
agreement or instrument governing the Indebtedness being refinanced, refunded,
renewed or extended and the interest rate applicable to any such refinancing,
refunding, renewing or extending Indebtedness does not exceed the then
applicable market interest rate;

 

(c) Guarantees of any Borrower or any Guarantor in respect of Indebtedness
otherwise permitted hereunder of any Borrower or any other Guarantor;

 

(d) obligations (contingent or otherwise) of any Borrower or any Subsidiary
existing or arising under any Swap Contract, provided that (i) such obligations
are (or were) entered into by such Person in the ordinary course of business for
the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by
such Person, or changes in the value of securities issued by such Person, and
not for purposes of speculation or taking a “market view;” and (ii) such Swap
Contract does not contain any provision exonerating the non-defaulting party
from its obligation to make payments on outstanding transactions to the
defaulting party;

 

(e) Indebtedness in respect of Capitalized Leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.1(i); provided, however, that the aggregate
amount of all such Indebtedness at any one time outstanding shall not exceed
$10,000,000;

 

(f) endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of business;

 

(g) Indebtedness in respect of guaranties of dealer store leases, provided that
the maximum aggregate guaranty obligation in respect thereof shall not exceed
$2,000,000 at any time;

 

(h) Indebtedness in respect of reimbursement obligations under letters of credit
and bankers’ acceptances incurred in the ordinary course of business, provided
that the aggregate maximum amount available for drawing by the beneficiaries of
such letters of credit and banker’s acceptances outstanding at any time shall
not exceed $75,000,000;

 

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(i) Indebtedness of a Guarantor to any Borrower or to another Guarantor;

 

(j) unsecured Indebtedness that by its terms is made subordinate and junior in
right of payment to the Loans and the other Obligations by provisions in form
and substance satisfactory to the Administrative Agent (“Subordinated Debt”) so
long as, (i) after giving effect on a pro forma basis to the incurrence of such
Indebtedness, the Borrowers shall be in compliance with the financial covenants
contained in Section 7.13 (calculated as of the most recently ended Fiscal
Quarter) and (ii) the maturity date with respect to such Indebtedness shall be
no earlier than thirty days after the Maturity Date; and

 

(k) Indebtedness in an aggregate principal amount not to exceed $10,000,000 at
any time outstanding.

 

7.4 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into
another Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, or agree to effect any asset
acquisition or stock acquisition (other than the acquisition of assets in the
ordinary course of business), except that, so long as no Default exists or would
result therefrom:

 

(a) any Subsidiary may merge with (i) any Borrower, provided that such Borrower
shall be the continuing or surviving Person, or (ii) any one or more other
Subsidiaries, provided that when any Guarantor is merging with another
Subsidiary, the Guarantor shall be the continuing or surviving Person;

 

(b) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to any Borrower or to another Subsidiary;
provided that if the transferor in such a transaction is a Guarantor, then the
transferee must either be a Borrower or a Guarantor; and

 

(c) any Borrower or any Subsidiary may effect any asset acquisition or stock
acquisition of a business (a “Permitted Acquisition”) so long as (i) such
business is engaged in substantially the same line of business as the Borrowers,
(ii) after giving effect to such acquisition, the Borrowers and the Subsidiaries
shall have, on a consolidated basis, no less than $100,000,000 in unrestricted
cash and cash equivalents and/or availability under the Aggregate Commitments,
(iii) after giving effect to such acquisition, the Borrowers shall be in
compliance with the financial covenants contained in Sections 7.13 and 7.14
determined on a pro forma basis giving effect to such acquisition as of the most
recently ended Fiscal Quarter and (iv) with respect to any acquisition, the
purchase price of which is greater than $20,000,000, not less than ten days
prior to such acquisition, the Borrowers shall have delivered to the
Administrative Agent a Compliance Certificate certifying as to the matters set
forth in clause (iii) of this clause (c).

 

7.5 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:

 

(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;

 

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(b) Dispositions of inventory in the ordinary course of business;

 

(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

 

(d) Dispositions of property by any Subsidiary to any Borrower or to a
wholly-owned Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be a Borrower or a Guarantor;

 

(e) Dispositions permitted by Section 7.4;

 

(f) non-exclusive licenses of IP Rights in the ordinary course of business and
substantially consistent with past practice; and

 

(g) Dispositions by any Borrower and the Subsidiaries not otherwise permitted
under this Section 7.5; provided that (i) at the time of such Disposition, no
Default shall exist or result from such Disposition and (ii) the aggregate fair
market value of all property Disposed of in reliance on this clause (g) during
any Fiscal Year shall not exceed 10% of Consolidated Total Assets as of the end
of the prior Fiscal Year.

 

provided, however, that any Disposition pursuant to clauses (a) through (g)
shall be for fair market value.

 

7.6 Restricted Payments. Declare or make, directly or indirectly, any Restricted
Payment, or incur any obligation (contingent or otherwise) to do so, except
that, so long as no Default shall have occurred and be continuing at the time of
any action described below or would result therefrom:

 

(a) each Subsidiary may make Restricted Payments to any Borrower, the Guarantors
and any other Person that owns an Equity Interest in such Subsidiary, ratably
according to their respective holdings of the type of Equity Interest in respect
of which such Restricted Payment is being made;

 

(b) each Borrower and each Subsidiary may declare and make dividend payments or
other distributions payable solely in the common stock or other common Equity
Interests of such Person;

 

(c) each Borrower and each Subsidiary may purchase, redeem or otherwise acquire
Equity Interests issued by it with the proceeds received from the substantially
concurrent issue of new shares of its common stock or other common Equity
Interests; and

 

(d) SRC may make other Restricted Payments; provided that, unless the
Consolidated Leverage Ratio, determined on a pro forma basis after giving effect
to the making of such

 

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Restricted Payment and any borrowings related therewith, calculated as of the
most recently ended Fiscal Quarter, is less than 2.0:1.0, the aggregate amount
of all such Restricted Payments made in any Fiscal Year shall not exceed
$25,000,000; and provided further that SRC shall not be permitted to make any
Restricted Payment hereunder unless (i) the Borrowers shall be in compliance
with the financial covenants contained in Section 7.13, determined on a pro
forma basis giving effect to such Restricted Payment as of the most recently
ended Fiscal Quarter and (ii) with respect to any Restricted Payment or series
of related Restricted Payments in an amount greater than $25,000,000, not less
than ten days prior to such Restricted Payment, the Borrowers shall have
delivered to the Administrative Agent a Compliance Certificate certifying as to
the matters set forth in clause (i) of this clause (d).

 

7.7 Change in Nature of Business. Engage in any material line of business
substantially different from those lines of business conducted by the Borrowers
and the Subsidiaries on the date hereof or any business substantially related or
incidental thereto.

 

7.8 Transactions with Affiliates. Enter into any transaction of any kind with
any Affiliate of any Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
such Borrower or such Subsidiary as would be obtainable by such Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate, provided that the foregoing restriction shall not apply
to transactions between or among a Borrower and any Guarantor or between and
among any Guarantors.

 

7.9 Burdensome Agreements.

 

(a) Enter into any Contractual Obligation (other than this Agreement or any
other Loan Document) that (a) limits the ability (i) of any Subsidiary to make
Restricted Payments to any Borrower or any Guarantor or to otherwise transfer
property to any Borrower or any Guarantor, (ii) of any Subsidiary to Guarantee
the Indebtedness of any Borrower or (iii) of any Borrower or any Subsidiary to
create, incur, assume or suffer to exist Liens on property of such Person;
provided, however, that this clause (iii) shall not prohibit any negative pledge
incurred or provided in favor of any holder of Indebtedness permitted under
Section 7.3(e) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; or (b) requires the
grant of a Lien to secure an obligation of such Person if a Lien is granted to
secure another obligation of such Person.

 

(b) Become a general partner in a partnership without the consent of the
Administrative Agent unless (i) the aggregate amount of Indebtedness incurred by
the Borrowers and the Subsidiaries in connection therewith does not exceed
$10,000,000 and (ii) the incurrence of any such Indebtedness is otherwise
permitted under Section 7.3.

 

7.10 Use of Proceeds. Use the proceeds of any Credit Extension (or extend credit
to others for such use), whether directly or indirectly, and whether
immediately, incidentally or ultimately, in a manner which would violate
Regulation U issued by the FRB.

 

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7.11 Change in Terms of Organizational Documents. Effect or permit any change in
or amendment to the Organizational Documents of any Borrower or any Subsidiary
which would adversely affect the Lenders.

 

7.12 Change in Accounting and Reporting Policies. Change its Fiscal Year,
accounting policies (other than as set forth in Section 1.3) or financial
reporting practices.

 

7.13 Financial Covenants.

 

(a) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth at
any time to be less than the sum of (i) $132,742,000, plus (ii) on a cumulative
basis 50% of positive Consolidated Net Income for each Fiscal Quarter subsequent
to the Closing Date, minus (iii) Restricted Payments made by SRC subsequent to
the Closing Date in accordance with Section 7.6.

 

(b) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio at any
time during any period of four Fiscal Quarters of the Borrowers set forth below
to be greater than the ratio set forth below opposite such period:

 

                Four Fiscal Quarters Ending                

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

 

Maximum

Consolidated

Leverage Ratio

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

Closing Date through the end of FQ4 of

FYE 2006

  3.00:1.00

The first day of FQ1 of FYE 2007

through the Maturity Date

  2.50:1.00

 

(c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio at any time during any period of four Fiscal Quarters of
the Borrowers to be less than 2.0:1.0.

 

7.14 Capital Expenditures. Make or become legally obligated to make any Capital
Expenditure, except for Capital Expenditures in the ordinary course of business
not exceeding, in the aggregate for the Borrowers and the Subsidiaries during
each Fiscal Year, $20,000,000; provided, however, that so long as no Default has
occurred and is continuing or would result from such Capital Expenditure, any
portion of any amount set forth above, if not expended in the Fiscal Year for
which it is permitted above, may be carried over for expenditure in successive
fiscal years; provided that, no more than $10,000,000 in the aggregate may be
carried over to successive Fiscal Years.

 

7.15 Subordinated Debt. No Borrower will, nor will it permit any of its
Subsidiaries to, amend, supplement or otherwise modify the terms of any of the
Subordinated Debt or prepay, redeem or repurchase any of the Subordinated Debt.

 

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ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

 

8.1 Events of Default. Any of the following shall constitute an Event of
Default:

 

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

 

(b) Specific Covenants. Any Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.1, 6.2, 6.3, 6.5, 6.10,
6.11, 6.12 or 6.14 or ARTICLE VII; or

 

(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues for 30 days; or

 

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

 

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

 

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

 

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

 

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

 

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

 

(j) Invalidity of Loan Documents. Any provision of any Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or thereunder or satisfaction in full of all the
Obligations, ceases to be in full force and effect; or the Administrative
Agent’s security interests or liens in all or a portion of the Collateral
(excluding any non-material portion of the Collateral consisting of Equity
Interests of any Non-Material Subsidiary) shall cease to be perfected, or shall
cease to have the priority contemplated by the Security Documents; or any Loan
Party or any other Person contests in any manner the validity or enforceability
of any provision 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 provision of any Loan Document;

 

(k) Collateral. There shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo,

 

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condemnation, act of God or public enemy, or other casualty, which in any such
case causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of any
Borrower or any of its Subsidiaries if such event or circumstance is not covered
by business interruption insurance and would have a Material Adverse Effect;

 

(l) Indictment, etc. Any Borrower or any Subsidiary shall be indicted for a
state or federal crime, or any civil action shall otherwise have been brought
against any Borrower or any Subsidiary, a punishment for which in any such case
could include the forfeiture of any assets of such Borrower or such Subsidiaries
having a fair market value in excess of $10,000,000;

 

(m) Licenses and Permits. There shall occur the loss, suspension or revocation
of, or failure to renew, any license or permit now held or hereafter acquired by
any Borrower or any Subsidiary if such loss, suspension, revocation or failure
to renew would have a Material Adverse Effect; or

 

(n) Change of Control. There occurs any Change of Control.

 

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

 

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

 

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

 

(c) require that the Borrowers Cash Collateralize the L/C Obligations (in an
amount equal to the then Outstanding Amount thereof); and

 

(d) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents;

 

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

 

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8.3 Application of Funds. After the exercise of remedies provided for in Section
8.2 (or after the Loans have automatically become immediately due and payable
and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.2), any amounts received
on account of the Obligations (including, without limitation, with respect to
the realization upon any of the Collateral) shall be applied by the
Administrative Agent in the following order:

 

First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article III) payable to the Administrative Agent in its capacity as such
(including, without limitation, the reimbursement of the Administrative Agent
for or in respect of all reasonable costs, expenses, disbursements and losses
which shall have been incurred or sustained by the Administrative Agent in
connection with the collection of such monies by the Administrative Agent, for
the exercise, protection or enforcement by the Administrative Agent of all or
any of the rights, remedies, powers and privileges of the Administrative Agent
under this Agreement or any of the other Loan Documents or in respect of the
Collateral or in support of any provision of adequate indemnity to the
Administrative Agent against any taxes or liens which by law shall have, or may
have, priority over the rights of the Administrative Agent to such monies);

 

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

 

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

 

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

 

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate undrawn
amount of Letters of Credit;

 

Sixth, to the payment of all other Obligations; and

 

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

 

Subject to Section 2.3(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

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ARTICLE IX

ADMINISTRATIVE AGENT

 

9.1 Appointment and Authority. Each of the Lenders and the L/C Issuer 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 (including, without limitation, the authority, without the necessity of
any notice to or further consent of the Lenders, from time to time to take any
action with respect to any Collateral or the Security Documents which may be
necessary to perfect, maintain perfected or insure the priority of the security
interest in and Liens upon the Collateral granted pursuant to the Security
Documents). The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and no Borrower shall have
rights as a third party beneficiary of any of such provisions.

 

9.2 Rights as a Lender. The Person serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative Agent
and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated
or unless the context otherwise requires, include the Person serving as the
Administrative Agent hereunder in its individual capacity. Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial advisor
or in any other advisory capacity for and generally engage in any kind of
business with any Borrower or any Subsidiary or other Affiliate thereof as if
such Person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders.

 

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

 

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

 

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

 

(c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to any Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

 

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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 10.1 and 8.2) 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 Borrowers, a
Lender or the L/C Issuer.

 

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

9.4 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 L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the L/C Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or the L/C Issuer 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 Borrowers), 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.

 

9.5 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.

 

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9.6 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders, the L/C Issuer and the
Borrowers. Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, in consultation with the Borrowers, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and the L/C Issuer, appoint a successor Administrative
Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrowers and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
the L/C Issuer under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer 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 Borrowers to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.4 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 L/C Issuer and Swing Line
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 L/C Issuer and Swing Line
Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged
from all of their respective duties and obligations hereunder or under the other
Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit
in substitution for the Letters of Credit issued by Bank of America in its
capacity as L/C Issuer, if any, outstanding at the time of such succession or
make other arrangements satisfactory to the retiring L/C Issuer to effectively
assume the obligations of the retiring L/C Issuer with respect to such Letters
of Credit.

 

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9.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the
L/C Issuer 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 L/C Issuer also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder.

 

9.8 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none
of the Bookrunners, Arrangers, Co-Syndication Agents or Documentation Agents
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 L/C
Issuer hereunder.

 

9.9 Administrative Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
any Loan Party, the Administrative Agent (irrespective of whether the principal
of any Loan or L/C Obligation shall then be due and payable as herein expressed
or by declaration or otherwise and irrespective of whether the Administrative
Agent shall have made any demand on any Borrower) shall be entitled and
empowered, by intervention in such proceeding or otherwise

 

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the L/C
Issuer and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders, the L/C
Issuer and the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders, the L/C Issuer and the Administrative Agent
under Sections 2.3(i)) and (j), 2.9 and 10.4) allowed in such judicial
proceeding; and

 

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

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the L/C Issuer to make such payments to the Administrative Agent
and, in the event that the Administrative Agent shall consent to the making of
such payments directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable

 

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compensation, expenses, disbursements and advances of the Administrative Agent
and its agents and counsel, and any other amounts due the Administrative Agent
under Sections 2.9 and 10.4.

 

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

 

9.10 Collateral and Guaranty Matters. The Lenders and the L/C Issuer irrevocably
authorize the Administrative Agent, at its option and in its discretion,

 

(a) to release any Lien on any of the Collateral (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or (iii)
subject to Section 10.1, if approved, authorized or ratified in writing by the
Required Lenders;

 

(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by Section 7.1(i); and

 

(c) to release any Guarantor from its obligations under the Guaranty if such
Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

 

Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in any of the Collateral, or to release any Guarantor
from its obligations under the Guaranty pursuant to this Section 9.10.

 

ARTICLE X

MISCELLANEOUS

 

10.1 Amendments, Etc. No amendment or waiver of any provision of this Agreement
or any other Loan Document, and no consent to any departure by any Borrower or
any other Loan Party therefrom, shall be effective unless in writing signed by
the Required Lenders and the Borrowers or the applicable Loan Party, as the case
may be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:

 

(a) waive any condition set forth in Section 4.1(a) without the written consent
of each Lender;

 

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(b) extend or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.2) without the written consent of such Lender;

 

(c) postpone any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees or other amounts due to the Lenders (or any
of them) hereunder or under any other Loan Document without the written consent
of each Lender directly affected thereby;

 

(d) reduce the principal of, or the rate of interest specified herein on, any
Loan or L/C Borrowing, or (subject to clause (v) of the second proviso to this
Section 10.1) any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of any Borrower to pay interest or Letter of Credit Fees at the
Default Rate or (ii) to amend any financial covenant hereunder (or any defined
term used therein) even if the effect of such amendment would be to reduce the
rate of interest on any Loan or L/C Borrowing or to reduce any fee payable
hereunder;

 

(e) change Section 2.13 or Section 8.3 in a manner that would alter the pro rata
sharing of payments required thereby without the written consent of each Lender;

 

(f) change any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder without the written consent of each
Lender;

 

(g) release all or substantially all of the value of the Guaranty without the
written consent of each Lender; or

 

(h) release all or substantially all of the Collateral in any transaction or
series of related transactions;

 

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Lender in addition to the Lenders required above, affect the rights or
duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; (iv)
Section 10.6(h) may not be amended, waived or otherwise modified without the
consent of each Granting Lender all or any part of whose Loans are being funded
by an SPC at the time of such amendment, waiver or other modification; and (v)
the Fee Letter may be amended, or rights or privileges thereunder waived, in a
writing executed only by the parties thereto. Notwithstanding anything to the
contrary herein, no Defaulting Lender shall

 

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have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.

 

10.2 Notices; Effectiveness; Electronic Communication.

 

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows, and all
notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:

 

(i) if to any Borrower, the Administrative Agent, Bank of America, in its
capacity as L/C Issuer, or the Swing Line Lender, to the address, telecopier
number, electronic mail address or telephone number specified for such Person on
Schedule 10.2; and

 

(ii) if to any other Lender or L/C Issuer, to the address, telecopier number,
electronic mail address or telephone number specified in its Administrative
Questionnaire.

 

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

 

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

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt

 

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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.

 

(c) The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT
PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to any Borrower, any Lender, the L/C Issuer
or any other Person for losses, claims, damages, liabilities or expenses of any
kind (whether in tort, contract or otherwise) arising out of any 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 any Borrower, any Lender, the L/C Issuer or
any other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

 

(d) Change of Address, Etc. Each Borrower, the Administrative Agent, the L/C
Issuer and the Swing Line Lender may change its address, telecopier or telephone
number for notices and other communications hereunder by notice to the other
parties hereto. Each other Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the
Borrowers, the Administrative Agent, the L/C Issuer and the Swing Line Lender.
In addition, each Lender agrees to notify the Administrative Agent from time to
time to ensure that the Administrative Agent has on record (i) an effective
address, contact name, telephone number, telecopier number and electronic mail
address to which notices and other communications may be sent and (ii) accurate
wire instructions for such Lender.

 

(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any
notices (including telephonic Committed Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of any Borrower even if (i) such
notices were not made in a manner specified

 

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herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrowers shall indemnify
the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of
each of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of any
Borrower. All telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

 

10.3 No Waiver; Cumulative Remedies. No failure by any Lender, the L/C Issuer or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

 

10.4 Expenses; Indemnity; Damage Waiver.

 

(a) Costs and Expenses. The Borrowers shall pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Arranger and each of their
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, (iii) taxes, fees and
other charges for filing financing statements and continuations, and other
actions to perfect, protect, and continue the Administrative Agent’s Liens, (iv)
costs and expenses of preserving and protecting the Collateral, (v) sums paid or
incurred to pay any amount or take any action required of any Borrower under the
Loan Documents that any Borrower fails to pay or take, and (vi) all
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
L/C Issuer (including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or the L/C Issuer), and shall pay all fees and
time charges for attorneys who may be employees of the Administrative Agent, any
Lender or the L/C Issuer, in connection with the enforcement or protection of
its rights (A) in connection with a Default or an anticipated Default under this
Agreement and/or the other Loan Documents, including its rights under this
Section, (B) in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit or (C) in connection with the sale or other realization of the
Collateral.

 

(b) Indemnification by the Borrowers. The Borrowers shall indemnify the
Administrative Agent (and any sub-agent thereof), the Arranger, each Lender and
the L/C Issuer, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims,

 

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damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), and shall indemnify and hold
harmless each Indemnitee from all fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by any Borrower or any
other Loan Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the case
of the Administrative Agent (and any sub-agent thereof) and its Related Parties
only, the administration of this Agreement and the other Loan Documents, (ii)
any Loan or Letter of Credit or the use or proposed use of the proceeds
therefrom (including any refusal by the L/C Issuer to honor a demand for payment
under a Letter of Credit if the documents presented in connection with such
demand do not strictly comply with the terms of such Letter of Credit), (iii)
any actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by any Borrower or any Subsidiary, or any
Environmental Liability related in any way to any Borrower or any Subsidiary, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by any Borrower or any other Loan
Party, and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or (y) result from a claim brought by any Borrower or any other
Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if such Borrower or such
Loan Party has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.

 

(c) Reimbursement by Lenders. To the extent that the Borrowers for any reason
fail to indefeasibly pay any amount required under subsection (a) or (b) of this
Section to be paid by it to the Administrative Agent (or any sub-agent thereof),
the L/C Issuer or any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub-agent), the
L/C Issuer or such Related Party, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity
as such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent) or L/C Issuer in connection with
such capacity. The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 2.12(d).

 

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, no Borrower shall assert, and hereby waives, any claim against
any Indemnitee, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby, the transactions

 

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contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. No Indemnitee referred to in subsection (b) above shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

 

(e) Payments. All amounts due under this Section shall be payable not later than
ten Business Days after demand therefor.

 

(f) Survival. The agreements in this Section shall survive the resignation of
the Administrative Agent and the L/C Issuer, the replacement of any Lender, the
termination of the Aggregate Commitments and the repayment, satisfaction or
discharge of all the other Obligations.

 

10.5 Payments Set Aside. To the extent that any payment by or on behalf of any
Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or
the Administrative Agent, the L/C Issuer or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and the L/C Issuer severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount so recovered
from or repaid by the Administrative Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
and the L/C Issuer under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.

 

10.6 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 no Borrower 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 Eligible 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, (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) of this Section,
or (iv) to an SPC in accordance with the provisions of subsection (h) of this
Section (and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

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(b) Assignments by Lenders. Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans (including
for purposes of this subsection (b), participations in L/C Obligations and in
Swing Line Loans) at the time owing to it); provided that

 

(i) except 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 or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, 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 Borrowers otherwise consent (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;

 

(ii) 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 rights in respect of Swing Line Loans;

 

(iii) any assignment of a Commitment must be approved by the Administrative
Agent and the Swing Line Lender unless the Person that is the proposed assignee
is itself a Lender (whether or not the proposed assignee would otherwise qualify
as an Eligible Assignee); and

 

(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount, if any, required as set forth in Schedule
10.6, and the Eligible Assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire.

 

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 Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and

 

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Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 3.1, 3.4, 3.5, and 10.4 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Upon
request, the Borrowers (at their expense) shall execute and deliver a Note to
the assignee Lender. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this subsection shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with subsection (d)
of this Section.

 

(c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrowers, 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 L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrowers, 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 each Borrower and the L/C Issuer at any reasonable
time and from time to time upon reasonable prior notice. In addition, at any
time that a request for a consent for a material or substantive change to the
Loan Documents is pending, any Lender may request and receive from the
Administrative Agent a copy of the Register.

 

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrowers or the Administrative Agent, sell participations to any
Person (other than a natural person or any Borrower or any Affiliates or
Subsidiaries of any Borrower) (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 L/C Obligations and/or Swing Line 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 Borrowers, the
Administrative Agent, the Lenders and the L/C Issuer 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

 

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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 10.1 that affects such Participant. Subject to subsection (e) of this
Section, each Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.1, 3.4 and 3.5 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 10.8 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.13 as though it were a Lender.

 

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 3.1 or 3.4 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 each Borrower’s prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 3.1 unless the Borrowers are notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrowers, to
comply with Section 3.1(e) as though it were a Lender.

 

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

 

(g) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

 

(h) Special Purpose Funding Vehicles. Notwithstanding anything to the contrary
contained herein, any Lender (a “Granting Lender”) may grant to a special
purpose funding vehicle identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrowers (an “SPC”) the
option to provide all or any part of any Committed Loan that such Granting
Lender would otherwise be obligated to make pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to fund any
Committed Loan, and (ii) if an SPC elects not to exercise such option or
otherwise fails to make all or any part of such Committed Loan, the Granting
Lender shall be obligated to make such Committed Loan pursuant to the terms
hereof or, if it fails to do so, to make such payment to the Administrative
Agent as is required under Section 2.12(b)(ii). Each party hereto hereby

 

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agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such
option shall increase the costs or expenses or otherwise increase or change the
obligations of any Borrower under this Agreement (including its obligations
under Section 3.4), (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, and
(iii) the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. The making of a Committed Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Committed Loan were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrowers and the Administrative Agent and with the payment of a
processing fee in the amount of $2,500, assign all or any portion of its right
to receive payment with respect to any Committed Loan to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to its
funding of Committed Loans to any rating agency, commercial paper dealer or
provider of any surety or Guarantee or credit or liquidity enhancement to such
SPC.

 

(i) Resignation as L/C Issuer or Swing Line 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 Borrowers and the
Lenders, resign as L/C Issuer and/or (ii) upon 30 days’ notice to the Borrowers,
resign as Swing Line Lender. In the event of any such resignation as L/C Issuer
or Swing Line Lender, the Borrowers shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Borrowers to appoint any such successor shall
affect the resignation of Bank of America as L/C Issuer or Swing Line Lender, as
the case may be. If Bank of America resigns as L/C Issuer, it shall retain all
the rights, powers, privileges and duties of the L/C Issuer hereunder with
respect to all Letters of Credit issued by Bank of America, in its capacity as
L/C Issuer, and outstanding as of the effective date of its resignation as L/C
Issuer and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Committed Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.3(c)). If Bank of
America resigns as Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Base Rate Committed Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.4(c). Upon
the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the
case may be, and (b) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit issued by Bank of America, in its
capacity as L/C Issuer, if any, outstanding at the time of such succession 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.

 

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10.7 Treatment of Certain Information; Confidentiality. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to any Borrower and its obligations, (g) with the consent of the
Borrowers or (h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrowers.

 

For purposes of this Section, “Information” means all information received from
any Borrower or any Subsidiary relating to any Borrower or any Subsidiary or any
of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by any Borrower or any Subsidiary,
provided that, in the case of information received from any Borrower or any
Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges
that (a) the Information may include material non-public information concerning
a Borrower or a Subsidiary, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it will
handle such material non-public information in accordance with applicable Law,
including Federal and state securities Laws.

 

10.8 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the L/C Issuer and each of their respective Affiliates
is hereby authorized at any

 

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time and from time to time, after obtaining the prior written consent of the
Administrative Agent, to the fullest extent permitted by applicable law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, the L/C
Issuer or any such Affiliate to or for the credit or the account of any Borrower
against any and all of the obligations of any Borrower now or hereafter existing
under this Agreement or any other Loan Document to such Lender or the L/C
Issuer, irrespective of whether or not such Lender or the L/C Issuer shall have
made any demand under this Agreement or any other Loan Document and although
such obligations of such Borrower may be contingent or unmatured or are owed to
a branch or office of such Lender or the L/C Issuer different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
each Lender, the L/C Issuer and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff)
that such Lender, the L/C Issuer or their respective Affiliates may have. Each
Lender and the L/C Issuer agrees to notify the Borrowers and the Administrative
Agent promptly after any such setoff and application, provided that the failure
to give such notice shall not affect the validity of such setoff and
application.

 

10.9 Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or
any Lender shall receive interest in an amount that exceeds the Maximum Rate,
the excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrowers. In determining whether
the interest contracted for, charged, or received by the Administrative Agent or
a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.

 

10.10 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings (other
than the Fee Letter), oral or written, relating to the subject matter hereof
(including, without limitation, the Commitment Letter, dated June 1, 2005, among
SRC, the Administrative Agent and the Arranger). Except as provided in Section
4.1, this Agreement shall become effective when it shall have been executed by
the Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

10.11 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and

 

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delivery hereof and thereof. Such representations and warranties have been or
will be relied upon by the Administrative Agent and each Lender, regardless of
any investigation made by the Administrative Agent or any Lender or on their
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any other
Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.

 

10.12 Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

10.13 Replacement of Lenders. If any Lender requests compensation under Section
3.4, or if any Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to Section
3.1, or if any Lender is a Defaulting Lender or if any Lender fails to approve
an amendment, consent or waiver hereunder which is approved by the Required
Lenders, then the Borrowers may, at their sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.6), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:

 

(a) the Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section 10.6(b);

 

(b) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and L/C Advances, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.5) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrowers (in the case of all other amounts);

 

(c) in the case of any such assignment resulting from a claim for compensation
under Section 3.4 or payments required to be made pursuant to Section 3.1, such
assignment will result in a reduction in such compensation or payments
thereafter; and

 

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

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrowers to require such assignment and delegation
cease to apply.

 

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10.14 Governing Law; Jurisdiction; Etc.

 

(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS.

 

(b) SUBMISSION TO JURISDICTION. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND ANY UNITED STATES FEDERAL COURT
SITTING THEREIN, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
MASSACHUSETTS STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT
IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN
OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(c) WAIVER OF VENUE. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED
TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

 

(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.2. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

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10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

10.16 USA PATRIOT Act Notice. Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record information that
identifies each Borrower, which information includes the name and address of
each Borrower and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify each Borrower in accordance
with the Act.

 

10.17 Time of the Essence. Time is of the essence of the Loan Documents.

 

10.18 Joint and Several Liability of the Borrowers. Each Borrower hereby
irrevocably and unconditionally agrees that it is jointly and severally liable
for all of the liabilities, obligations, covenants and agreements of the
Borrowers hereunder and under the other Loan Documents, whether now or hereafter
existing or due or to become due. The obligations of the Borrowers under the
Loan Documents may be enforced by the Administrative Agent and the Lenders
against any Borrower or all Borrowers in any manner or order selected by the
Administrative Agent or the Required Lenders in their sole discretion. Each
Borrower hereby irrevocably waives (i) any rights of subrogation and (ii) any
rights of contribution, indemnity or reimbursement, in each case, that it may
acquire or that may arise against any other Borrower due to any payment or
performance made under this Agreement, in each case until all Obligations shall
have been fully satisfied. Without limiting the foregoing provisions of this
Section 10.18, each. Borrower acknowledges and agrees that:

 

(a) its obligations under this Agreement shall remain enforceable against it
even though such obligations may be unenforceable or not allowable against any
other Borrower due to the existence of an insolvency proceeding involving any
other Borrower or otherwise;

 

(b) its obligations under this Agreement are independent of the obligations of
any other Borrower, and a separate action or actions may be brought and
prosecuted against it in respect of such obligations irrespective of whether any
action is brought against any other Borrower or any other Borrower is joined in
any such action or actions;

 

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(c) it hereby irrevocably waives any defenses it may now have or hereafter
acquire in any way relating to, any or all of the following:

 

(i) any lack of validity or enforceability of this Agreement or any agreement or
instrument relating thereto in respect of any other Borrower;

 

(ii) any change in the time, manner or place of payment of, or in any other term
of, all or any of the obligations of any other Borrower under or in respect of
this Agreement, or any other amendment or waiver of or any consent to departure
from this Agreement, in respect of any other Borrower;

 

(iii) any change, restructuring or termination of the structure or existence of
any other Borrower;

 

(iv) the failure of any other Person to execute or deliver any other agreement
or the release or reduction of liability of any other Person with respect to any
obligations of the Borrowers under this Agreement; or

 

(v) any other circumstance (including any statute of limitations but other than
the Obligations having been indefeasibly paid in full in cash) or any existence
of or reliance on any representation by any other Person that might otherwise
constitute a defense available to, or a discharge of, any other Borrower;

 

(d) its obligations under this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any such
obligations is rescinded or must otherwise be returned by any Person upon the
insolvency, bankruptcy or reorganization of any other Borrower, all as though
such payment had not been made; and

 

(e) it hereby unconditionally and irrevocably waives any right to revoke its
joint and several liability under the Loan Documents and acknowledges that such
liability is continuing in nature and applies to all obligations of the
Borrowers under the Loan Documents, whether existing now or in the future.

 

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

 

THE STRIDE RITE CORPORATION By:  

/s/ Gordon W. Johnson

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

Name:   Gordon W. Johnson Title:   Treasurer STRIDE RITE CHILDREN’S GROUP, INC.
By:  

/s/ Gordon W. Johnson

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

Name:   Gordon W. Johnson Title:   Treasurer

 

S-1

Stride Rite Credit Agreement

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

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

/s/ Mollie S. Canup

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

Name:   Mollie S. Canup Title:   Vice President

 

S-2

Stride Rite Credit Agreement

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

BANK OF AMERICA, N.A., as a Lender, L/C

Issuer and Swing Line Lender

By:  

/s/ Casey Cosgrove

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

Name:   Casey Cosgrove Title:   Vice President

 

S-3

Stride Rite Credit Agreement

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

THE BANK OF NEW YORK, as a Lender and Co-Syndication Agent By:  

/s/ Johna M. Fidanza

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

Name:   Johna M. Fidanza Title:   Vice President

 

S-4

Stride Rite Credit Agreement

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

SUNTRUST BANK, as a Lender and Co-Syndication Agent By:  

/s/ Robert W. Maddox

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

Name:   Robert W. Maddox Title:   Vice President

 

S-5

Stride Rite Credit Agreement

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

CITIZENS BANK OF MASSACHUSETTS, as a Lender and Documentation Agent By:  

/s/ Daniel Bernard

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

Name:   Daniel Bernard Title:   Vice President

 

S-6

Stride Rite Credit Agreement

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

HSBC BANK USA, N.A., as a Lender By:  

/s/ Kenneth V. McGraime

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

Name:   Kenneth V. McGraime Title:   Senior Vice President, Commercial Executive

 

S-7

Stride Rite Credit Agreement

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

WACHOVIA BANK, NA, as a Lender By:  

/s/ Jonathan B. Dayton

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

Name:   Jonathan B. Dayton Title:   Senior Vice President

 

S-8

Stride Rite Credit Agreement

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

LaSALLE BANK NATIONAL ASSOCIATION,

as a Lender

By:  

/s/ Henry L. Petrillo

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

Name:   Henry L. Petrillo Title:   Senior Vice President

 

S-9

Stride Rite Credit Agreement

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

SOVEREIGN BANK, as a Lender By:  

/s/ Judith C. E. Kelly

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

Name:   Judith C. E. Kelly Title:   Senior Vice President

 

S-10

Stride Rite Credit Agreement

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

NATIONAL CITY BANK, as a Lender By:  

/s/ Brian Strayton

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

Name:   Brian Strayton Title:   Senior Vice President

 

S-11

Stride Rite Credit Agreement