EXHIBIT 10(j)

EXECUTION COPY

Published CUSIP Number: 73107FAA3

FIVE-YEAR REVOLVING CREDIT AGREEMENT

among

POLARIS INDUSTRIES INC.
as Borrower,

AND

CERTAIN SUBSIDIARIES OF THE BORROWER
as Guarantors,

AND

THE LENDERS IDENTIFIED HEREIN,

AND

BANK OF AMERICA, N.A.,
as Administrative Agent and Issuing Lender

AND

U.S. BANK N.A.

as Syndication Agent

AND

THE BANK OF TOKYO-MITSUBISHI, LTD., CHICAGO BRANCH

as Documentation Agent

DATED AS OF JUNE 25, 2004

BANC OF AMERICA SECURITIES LLC
as Sole Book Manager and Sole Lead Arranger

 

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TABLE OF CONTENTS

                      SECTION 1 DEFINITIONS AND ACCOUNTING TERMS     1  

    1.1     Definitions     1  

    1.2     Computation of Time Periods and Other Definitional Provisions     22
 

    1.3     Accounting Terms     22  

    1.4     Time     23  

    1.5     References to Agreements and Requirement of Laws     23  

    1.6     Letter of Credit Amounts     23   SECTION 2 CREDIT FACILITIES     23
 

    2.1     Loans     23  

    2.2     Letter of Credit Subfacility     25  

    2.3     Continuations and Conversions     34  

    2.4     Minimum Amounts     34   SECTION 3 GENERAL PROVISIONS APPLICABLE TO
LOANS AND LETTERS OF CREDIT     34  

    3.1     Interest     34  

    3.2     Place and Manner of Payments     35  

    3.3     Prepayments     37  

    3.4     Fees     38  

    3.5     Payment in full at Maturity     39  

    3.6     Computations of Interest and Fees     39  

    3.7     Pro Rata Treatment     40  

    3.8     Sharing of Payments     41  

    3.9     Capital Adequacy     42  

    3.10     Inability To Determine Interest Rate     42  

    3.11     Illegality     43  

    3.12     Requirements of Law     43  

    3.13     Taxes     44  

    3.14     Compensation     47  

    3.15     Determination and Survival of Provisions     48   SECTION 4
GUARANTY     48  

    4.1     Guaranty of Payment     48  

    4.2     Obligations Unconditional     48  

    4.3     Modifications     49  

    4.4     Waiver of Rights     50  

    4.5     Reinstatement     50  

    4.6     Remedies     50  

    4.7     Limitation of Guaranty     50  

    4.8     Rights of Contribution     51   SECTION 5 CONDITIONS PRECEDENT    
51  

    5.1     Closing Conditions     51  

    5.2     Conditions to All Extensions of Credit     53   SECTION 6
REPRESENTATIONS AND WARRANTIES     54  

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    6.1     Organization and Good Standing     54  

    6.2     Due Authorization     54  

    6.3     Enforceable Obligations     54  

    6.4     No Conflicts     55  

    6.5     Consents     55  

    6.6     Financial Condition     55  

    6.7     No Material Change     56  

    6.8     Disclosure     56  

    6.9     No Default     56  

    6.10     Litigation     56  

    6.11     Taxes     56  

    6.12     Compliance with Law     57  

    6.13     Licenses, etc     57  

    6.14     Title to Properties     57  

    6.15     Insurance     57  

    6.16     Use of Proceeds     57  

    6.17     Government Regulation     57  

    6.18     No Burdensome Restrictions     58  

    6.19     ERISA     58  

    6.20     Environmental Matters     59  

    6.21     Intellectual Property     61  

    6.22     Subsidiaries     61  

    6.23     Solvency     61  

    6.24     Indebtedness     61  

    6.25     Investments; Liens     62  

    6.26     Force Majeure     62   SECTION 7 AFFIRMATIVE COVENANTS     62  

    7.1     Information Covenants     62  

    7.2     Financial Covenants     65  

    7.3     Preservation of Existence and Franchises     66  

    7.4     Books and Records     66  

    7.5     Compliance with Law     66  

    7.6     Payment of Taxes and Other Indebtedness     66  

    7.7     Insurance     67  

    7.8     Maintenance of Property     67  

    7.9     Performance of Obligations     67  

    7.10     Use of Proceeds     67  

    7.11     Audits/Inspections     67  

    7.12     Additional Credit Parties     68   SECTION 8 NEGATIVE COVENANTS    
68  

    8.1     Indebtedness     68  

    8.2     Guaranty Obligations     70  

    8.3     Liens     71  

    8.4     Nature of Business     71  

    8.5     Consolidation and Merger     71  

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    8.6     Sale or Lease of Assets     71  

    8.7     Sale Leasebacks     72  

    8.8     Investments     72  

    8.9     Foreign Subsidiaries     72  

    8.10     Transactions with Affiliates     72  

    8.11     Fiscal Year; Accounting; Organizational Documents     73  

    8.12     No Limitations     73  

    8.13     No Other Negative Pledges     73  

    8.14     PAI Assets     73   SECTION 9 EVENTS OF DEFAULT     74  

    9.1     Events of Default     74  

    9.2     Acceleration; Remedies     77  

    9.3     Allocation of Payments After Event of Default     78   SECTION 10
AGENCY PROVISIONS     79  

    10.1     Appointment     79  

    10.2     Delegation of Duties     80  

    10.3     Exculpatory Provisions     80  

    10.4     Reliance on Communications     81  

    10.5     Notice of Default     81  

    10.6     Non-Reliance on Administrative Agent and Other Lenders     82  

    10.7     Indemnification     82  

    10.8     Administrative Agent in Its Individual Capacity     83  

    10.9     Successor Agent     83  

    10.10     Administrative Agent May File Proof of Claims     84   SECTION 11
MISCELLANEOUS     85  

    11.1     Notices and other Communications; Facsimile Copies     85  

    11.2     Right of Set-Off, Automatic Debits     86  

    11.3     Benefit of Agreement     87  

    11.4     No Waiver; Remedies Cumulative     91  

    11.5     Payment of Expenses; Indemnification     91  

    11.6     Amendments, Waivers and Consents     92  

    11.7     Counterparts     93  

    11.8     Headings     93  

    11.9     Defaulting Lender     93  

    11.10     Survival of Indemnification and Representations and Warranties    
93  

    11.11     Governing Law; Jurisdiction     93  

    11.12     Waiver of Jury Trial; Waiver of Consequential Damages     94  

    11.13     Severability     94  

    11.14     Further Assurances     94  

    11.15     Confidentiality     94  

    11.16     Entirety     95  

    11.17     Binding Effect; Continuing Agreement     95  

    11.18     USA PATRIOT Act Notice     96  

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SCHEDULES

     
Schedule 1.1(a)
  Commitment Percentages/Lending Offices
Schedule 1.1(b)
  Existing Letters of Credit
Schedule 6.22
         Subsidiaries
Schedule 8.1(k)
  Indebtedness
Schedule 8.2(a)
  Repurchase Agreements
Schedule 8.2(d)
  Existing PAI Obligations
Schedule 8.3
         Liens
Schedule 8.6
         Sales of Accounts Receivable
Schedule 8.8
         Investments
Schedule 11.1
         Notices

EXHIBITS

     
Exhibit 2.1(b)
  Form of Notice of Borrowing
Exhibit 2.1(e)
  Form of Note
Exhibit 2.3
  Form of Notice of Continuation/Conversion
Exhibit 7.1(c)
  Form of Officer’s Certificate
Exhibit 7.12
  Form of Joinder Agreement
Exhibit 11.3(b)
  Form of Assignment and Assumption

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FIVE-YEAR REVOLVING CREDIT AGREEMENT

     THIS FIVE-YEAR REVOLVING CREDIT AGREEMENT (this “Credit Agreement”), is
entered into as of June 25, 2004 among POLARIS INDUSTRIES INC., a Minnesota
corporation (the “Borrower”), certain of the Subsidiaries of the Borrower
(individually a “Guarantor” and collectively the “Guarantors”), the Lenders (as
defined herein), and BANK OF AMERICA, N.A., as Issuing Lender and Administrative
Agent for the Lenders.

RECITALS

     WHEREAS, the Borrower and the Guarantors have requested the Lenders to
provide a senior credit facility to the Borrower in an aggregate principal
amount of up to $250,000,000; and

     WHEREAS, the Lenders party hereto have agreed to make the requested senior
credit facility available to the Borrower on the terms and conditions
hereinafter set forth.

     NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

SECTION 1

DEFINITIONS AND ACCOUNTING TERMS

     1.1 Definitions.

     As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:

     “Acceptance Partnership” means Polaris Acceptance, an Illinois general
partnership.

     “Acceptance Partnership Agreement” means that certain Partnership
Agreement, dated as of February 7, 1996, between PAI and Transamerica Joint
Ventures, Inc., pursuant to which the Acceptance Partnership was created, as the
same may be amended, restated or otherwise modified from time to time.

     “Acquisition” means the acquisition by any Person of (a) all or
substantially all of the Capital Stock of another Person, (b) all or
substantially all of the assets of another Person or (c) all or substantially
all of a line of business of another Person, in each case whether or not
involving a merger or consolidation with such other Person.

 

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     “Additional Credit Party” means each Person that becomes a Guarantor after
the Closing Date, as provided in Section 7.12 or otherwise.

     “Adjusted Eurodollar Rate” means, with respect to Eurodollar Loans, the
Eurodollar Rate plus the Applicable Percentage.

     “Adjusted Leverage Ratio” means, as of the last day of each fiscal quarter,
the ratio of (a) the quotient of (i) the sum of all Funded Debt for each day
during the period of four fiscal quarters ending on such date, divided by
(ii) the number of days in such period to (b) EBITDA for the period of four
fiscal quarters ending on such date.

     “Administrative Agent” means Bank of America, N.A. (or any successor
thereto) or any successor administrative agent appointed pursuant to
Section 10.9.

     “Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by or under direct or indirect common control with
such Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power (a) to vote 10% or more of the
securities having ordinary voting power for the election of directors of such
corporation or (b) to direct or cause direction of the management and policies
of such corporation, whether through the ownership of voting securities, by
contract or otherwise.

     “Agency Services Address” means Bank of America, N.A., 1850 Gateway
Boulevard, Concord, California, Attn: Credit Services, or such other address as
may be identified by written notice from the Administrative Agent to the
Borrower and the Lenders.

     “Agent-Related Person” means the Administrative Agent (including any
successor administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, BAS), and
their respective officers, directors, employees, agents, counsel and
attorneys-in-fact.

     “Applicable Percentage” means the appropriate applicable percentages
corresponding to the Adjusted Leverage Ratio in effect as of the most recent
Calculation Date as shown below:

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                                      Applicable   Applicable   Applicable      
  Percentage for   Percentage for   Percentage for Pricing Level

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  Adjusted Leverage Ratio

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  Eurodollar Loans

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  Letter of Credit Fees

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  Facility Fee

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I
  £ .50 to 1.0     .575 %     .575 %     .175 %
II
  > .50 to 1.0 but £ 1.25 to 1.0     .675 %     .675 %     .200 %
III
  > 1.25 to 1.0 but £ 2.0 to 1.0     .775 %     .775 %     .225 %
IV
  > 2.0 to 1.0     1.000 %     1.000 %     .250 %

      The Applicable Percentage for Loans, the Letter of Credit Fees and the
Facility Fees shall, in each case, be determined and adjusted quarterly on the
date (each a “Calculation Date”) five Business Days after the date by which the
Borrower is required to provide the officer’s certificate in accordance with the
provisions of Section 7.1(c); provided that the initial Applicable Percentage
for Loans, the Letter of Credit Fees and the Facility Fees shall be based on
Pricing Level I (as shown above) and shall remain at Pricing Level I until the
first Calculation Date subsequent to the Closing Date and, thereafter, the
Pricing Level shall be determined by the Adjusted Leverage Ratio calculated as
of the most recent fiscal quarter end; provided further that if the Borrower
fails to provide the officer’s certificate required by Section 7.1(c) on or
before the most recent Calculation Date, the Applicable Percentage for Loans,
the Letter of Credit Fees and the Facility Fees from such Calculation Date shall
be based on Pricing Level IV (and the Borrower may be subject to a default rate
of interest, if applicable, pursuant to Section 3.1(b)) until such time as an
appropriate officer’s certificate is provided whereupon the Pricing Level shall
be determined by the then current Adjusted Leverage Ratio. Each Applicable
Percentage shall be effective from one Calculation Date until the next
Calculation Date. Any adjustment in the Applicable Percentage shall be
applicable to all existing Loans and Letters of Credit as well as any new Loans
made or Letters of Credit issued.

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

     “Assignment and Assumption” means an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 11.3(b), and accepted by the Administrative
Agent, in substantially the form of Exhibit 11.3(b) or any other form approved
by the Administrative Agent and the applicable Lenders).

     “Attorney Costs” means all reasonable fees and disbursements of any law
firm or other external counsel and the reasonable allocated cost of internal
legal services and all disbursements of internal counsel.

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     “Authorized Officer” means any of the president, chief financial officer,
vice president of finance, treasurer or assistant treasurer of the Borrower.

     “Bank of America” means Bank of America, N.A. or any successor thereto.

     “Bankruptcy Code” means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

     “BAS” means Banc of America Securities LLC.

     “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 Loan” means any Loan bearing interest at a rate determined by
reference to the Base Rate.

     “Borrower” means Polaris Industries Inc., a Minnesota corporation, together
with any successors and permitted assigns.

     “Business Day” means any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are authorized or required by law
or other governmental action to close in San Francisco, California, Dallas,
Texas, New York, New York or Chicago, Illinois; provided that in the case of
Eurodollar Loans, such day is also a day on which dealings between banks are
carried on in Dollar deposits in the London interbank market.

     “Calculation Date” has the meaning set forth in the definition of
Applicable Percentage.

     “Capital Expenditures” means all expenditures of the Borrower and its
Subsidiaries on a consolidated basis which, in accordance with GAAP, would be
classified as capital expenditures, including, without limitation, Capital
Leases.

     “Capital Lease” means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in accordance
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person and the amount of such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.

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     “Capital Stock” means (a) in the case of a corporation, all classes of
capital stock of such corporation, (b) in the case of a partnership, partnership
interests (whether general or limited), (c) in the case of a limited liability
company, membership interests and (d) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

     “Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Issuing Lender and the Lenders, as
collateral for the LOC Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent and
the Issuing Lender.

     “Cash Equivalents” means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (b) Dollar denominated time and
demand deposits, certificates of deposit and banker’s acceptances of (i) any
Lender, (ii) any domestic commercial bank having capital and surplus in excess
of $500,000,000 or (iii) any bank whose short-term commercial paper rating from
S&P is at least A-1 or the equivalent thereof or from Moody’s is at least P-1 or
the equivalent thereof (any such bank being an “Approved Bank”), in each case
with maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and
maturing within six months of the date of acquisition, (d) repurchase agreements
with a bank or trust company (including any of the Lenders) or recognized
securities dealer having capital and surplus in excess of $500,000,000 for
direct obligations issued by or fully guaranteed by the United States of America
in which the Borrower shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase obligations,
(e) Investments in tax-exempt municipal bonds rated AA (or the equivalent
thereof) or better by S&P or Aa2 (or the equivalent thereof) or better by
Moody’s and (f) Investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of which
are limited to Investments of the character described in the foregoing
subdivisions (a) through (e).

     “Change of Control” means either of the following events:

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     (a) any “person” or “group” (within the meaning of Section 13(d) or 14(d)
of the Exchange Act) has become, directly or indirectly, the “beneficial owner”
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act), by way of merger,
consolidation or otherwise of 25% or more of the Voting Stock of the Borrower on
a fully-diluted basis, after giving effect to the conversion and exercise of all
outstanding warrants, options and other securities of the Borrower convertible
into or exercisable for Voting Stock of the Borrower (whether or not such
securities are then currently convertible or exercisable); or

     (b) during any period of twelve calendar months, individuals who at the
beginning of such period constituted the board of directors of the Borrower
together with any new members of such board of directors whose elections by such
board of directors or whose nomination for election by the stockholders of the
Borrower was approved by a vote of a majority of the members of such board of
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved cease for any reason to constitute a majority of the directors of the
Borrower then in office.

     “Closing Date” means the date hereof.

     “Code” means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended, modified, succeeded or replaced
from time to time.

     “Commitment Percentage” means, for each Lender, the percentage identified
as its Commitment Percentage on Schedule 1.1(a), as such percentage may be
modified in connection with any assignment made in accordance with the
provisions of Section 11.3.

     “Commitments” means (a) with respect to each Lender, the Commitment
Percentage of such Lender multiplied by the Revolving Committed Amount and
(b) with respect to the Issuing Lender, the LOC Commitment.

     “Credit Documents” means this Credit Agreement, the Notes, any Joinder
Agreement, the LOC Documents, any Notice of Borrowing, and all other related
agreements and documents issued or delivered hereunder or thereunder or pursuant
hereto or thereto other than Hedging Agreements.

     “Credit Exposure” has the meaning set forth in the definition of Required
Lenders in this Section 1.1.

     “Credit Parties” means the Borrower and the Guarantors and “Credit Party”
means any one of them.

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     “Credit Party Obligations” means, without duplication, (a) all of the
obligations of the Credit Parties to the Lenders (including the Issuing Lender)
and the Administrative Agent, whenever arising, under this Credit Agreement, the
Notes, or any of the other Credit Documents to which any Credit Party is a party
and (b) all liabilities and obligations owing from such Credit Party to any
Lender, or any Affiliate of a Lender, arising under Hedging Agreements.

     “Default” means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.

     “Defaulting Lender” means, at any time, any Lender that, (a) has failed to
make a Loan or purchase a Participation Interest required pursuant to the terms
of this Credit Agreement (but only for so long as such Loan is not made or such
Participation Interest is not purchased), (b) has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant to the
terms of this Credit Agreement (but only for so long as such amount has not been
paid) or (c) has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar official.

     “Dollars” and “$” means dollars in lawful currency of the United States of
America.

     “Domestic Subsidiary” means each direct and indirect Subsidiary of the
Borrower that (a) is domiciled or organized under the laws of any State of the
United States or the District of Columbia or (b) maintains the major portion of
its assets in the United States of America.

     “EBIT” means, for any period, with respect to the Borrower and its
Subsidiaries on a consolidated basis, (a) Net Income for such period (excluding
the effect of any extraordinary or other non-recurring gains (including any gain
from the sale of property)) plus (b) an amount which, in the determination of
Net Income for such period, has been deducted for (i) Interest Expense for such
period and (ii) total Federal, state, foreign or other income taxes for such
period.

     “EBITDA” means, for any period, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the sum of (a) EBIT for such period plus
(b) an amount which, in the determination of Net Income for such period has been
deducted for all depreciation and amortization for such period.

     “Effective Date” means the date on which the conditions set forth in
Section 5.1 shall have been fulfilled (or waived in the sole discretion of the
Lenders) and on which the initial Loans shall have been made and/or the initial
Letters of Credit shall have been issued.

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     “Eligible Assets” means any assets or any business (or any substantial part
thereof) used or useful in the same or a similar line of business as the
Borrower and its Subsidiaries are engaged on the Closing Date.

     “Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person approved by the Administrative
Agent, the Issuing Lender and the Borrower (such approval not to be unreasonably
withheld or delayed); provided that (i) no assignment can be made pursuant to
clauses (a), (b) or (c) above without the Borrower’s consent if an assignment to
such Person would result in any increased cost to the Borrower under
Section 3.9, Section 3.12 or Section 3.13 on the date of such assignment,
(ii) the Borrower’s consent is not required during the existence and
continuation of a Default or an Event of Default, including any consent that may
be required pursuant to clause (i) above, (iii) approval by the Borrower shall
be deemed given if no objection is received by the assigning Lender and the
Administrative Agent from the Borrower within five Business Days after notice of
such proposed assignment has been delivered to the Borrower; and (iv) neither
the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee.

     “Environmental Claim” means any investigation, written notice, violation,
written demand, written allegation, action, suit, injunction, judgment, order,
consent decree, penalty, fine, lien, proceeding, or written claim whether
administrative, judicial, or private in nature arising (a) pursuant to, or in
connection with, an actual or alleged violation of, any Environmental Law,
(b) in connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in connection
with an Environmental Law or other order of a Governmental Authority or (d) from
any actual or alleged damage, injury, threat, or harm to health, safety, natural
resources, or the environment.

     “Environmental Laws” means any current or future legal requirement of any
Governmental Authority pertaining to (a) the protection of health, safety, and
the indoor or outdoor environment, (b) the conservation, management, or use of
natural resources and wildlife, (c) the protection or use of surface water and
groundwater or (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of, or exposure to, any
hazardous or toxic substance or material or (e) pollution (including any release
to land surface water and groundwater) and includes, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 USC
9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42
USC 6901 et seq., Federal Water Pollution Control Act, as amended by the Clean
Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42
USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq.,
Hazardous Materials Transportation Act, 49

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USC App. 1801 et seq., Occupational Safety and Health Act of 1970, as amended,
29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency
Planning and Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National
Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water Act
of 1974, as amended, 42 USC 300(f) et seq., any analogous implementing or
successor law, and any amendment, rule, regulation, order, or directive issued
thereunder.

     “Equity Issuance” means any issuance for cash by the Borrower or any of its
Subsidiaries to any Person of (a) shares of its Capital Stock or other equity
interests, (b) any shares of its Capital Stock or other equity interests
pursuant to the exercise of options or warrants or (c) any shares of its Capital
Stock or other equity interests pursuant to the conversion of any debt
securities to equity; provided that “Equity Issuance” shall not include an
issuance of equity by such Person pursuant to the exercise of employee stock
options.

     “Equity Reserve” has the meaning assigned to such term in the Revolving
Program Agreement (as defined as of October 15, 2001).

     “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.

     “ERISA Affiliate” means an entity, whether or not incorporated, which is
under common control with the Borrower or any Subsidiary of the Borrower within
the meaning of Section 4001(a)(14) of ERISA, or is a member of a group which
includes the Borrower or any Subsidiary of the Borrower and which is treated as
a single employer under Sections 414(b), (c), (m) or (o) of the Code.

     “ERISA Event” means (a) with respect to any Single Employer or Multiple
Employer Plan, the occurrence of a Reportable Event or the substantial cessation
of operations (within the meaning of Section 4062(e) of ERISA); (b) the
withdrawal of the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
substantial employer (as such term is defined in Section 4001(a)(2) of ERISA),
or the termination of a Multiple Employer Plan; (c) the distribution of a notice
of intent to terminate or the actual termination of a Plan pursuant to
Section 4041(a)(2) or 4041A of ERISA; (d) the institution of proceedings to
terminate or the actual termination of any Plan by the PBGC under Section 4042
of ERISA; (e) any event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan; (f) the complete or partial withdrawal of the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate from a Multiemployer Plan
or notification that a Multiemployer Plan is in reorganization; (g) the
conditions for imposition of a lien under Section 302(f) of ERISA

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exist with respect to any Plan; or (h) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA.

     “Eurodollar Loan” means a Loan bearing interest based at a rate determined
by reference to the Eurodollar Rate.

     “Eurodollar Rate” means, for the Interest Period for each Eurodollar Loan
comprising part of the same borrowing (including conversions, extensions and
renewals), a per annum interest rate (rounded upwards to the nearest 1/100 of
1%) determined pursuant to the following formula:

     
Eurodollar Rate =
  London Interbank Offered Rate

 

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  1 - Eurodollar Reserve Percentage

     “Eurodollar Reserve Percentage” means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D, as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including, without
limitation, any basic, supplemental, emergency, special, or marginal reserves)
applicable with respect to Eurocurrency liabilities as that term is defined in
Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate of Eurodollar Loans is
determined), whether or not a Lender has any Eurocurrency liabilities subject to
such reserve requirement at that time. Eurodollar Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credits for proration, exceptions or
offsets that may be available from time to time to a Lender. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any change in
the Eurodollar Reserve Percentage.

     “Event of Default” shall have the meaning given such term in Section 9.1.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, as amended, modified,
succeeded or replaced from time to time.

     “Existing Credit Agreements” means (i) that certain Multi-Year Revolving
Credit Agreement, dated as of June 27, 2003 and (ii) that certain 364-Day Credit
Agreement, dated as of June 27, 2003, each among the Borrower, as borrower, the
banks signatories thereto, and Bank of America, as administrative agent, as
amended, supplemented, extended, renewed, restated or replaced from time to
time.

     “Existing Letters of Credit” means the letters of credit set forth on
Schedule 1.1(b).

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     “Extension of Credit” means, as to any Lender, the making of a Loan by such
Lender (or a participation therein by a Lender) or the issuance of, or
participation in, a Letter of Credit by such Lender.

     “Facility Fees” means the fees payable to the Lenders pursuant to
Section 3.4(a).

     “Federal Funds Rate” means, for any day, the rate per annum (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) 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 charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.

     “Fee Letter” means that certain letter agreement, dated as of May 21, 2004,
among the Borrower, BAS and Bank of America.

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

     “Fuji Contract” means that certain Shareholder Agreement, dated as of
February 3, 1995, between Fuji Heavy Industries, Ltd. and the Borrower,
providing for the Borrower’s acquisition of 40% of the shares of Robin
Manufacturing U.S.A. Inc.

     “Fund” shall mean 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.

     “Funded Debt” means, without duplication, the sum of (a) the principal
amount of all obligations of the Borrower and its Subsidiaries for borrowed
money, (b) all purchase money Indebtedness of the Borrower and its Subsidiaries,
(c) the principal portion of all obligations of the Borrower and its
Subsidiaries under Capital Leases and (d) all drawn but unreimbursed amounts
under all letters of credit (other than letters of credit supporting trade
payables in the ordinary course of business) issued for the account of the
Borrower or any of its Subsidiaries.

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

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     “Governmental Authority” means any Federal, state, local, provincial or
foreign court or governmental agency, authority, instrumentality or regulatory
body.

     “Guarantor” means each of the Domestic Subsidiaries of the Borrower and
each Additional Credit Party, together with their successors and assigns.

     “Guaranty” means the guaranty of the Credit Party Obligations provided by
the Guarantors pursuant to Section 4.

     “Guaranty Obligations” means, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) guaranteeing any
Indebtedness of any other Person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not contingent, (a) to
purchase any such Indebtedness or other obligation or any property constituting
security therefor, (b) to advance or provide funds or other support for the
payment or purchase of such Indebtedness or obligation or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including, without limitation, maintenance agreements, comfort letters, take or
pay arrangements, put agreements or similar agreements or arrangements) for the
benefit of the holder of Indebtedness of such other Person, (c) 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, or (d) to otherwise assure
or hold harmless the owner of such Indebtedness or obligation against loss in
respect thereof. The amount of any Guaranty Obligation hereunder shall (subject
to any limitations set forth therein) be deemed to be an amount equal to the
outstanding principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made, or, if less,
the maximum amount for which such Person may be liable under the terms of the
instruments evidencing such Guaranty Obligation.

     “Hazardous Materials” means any substance, material or waste defined in or
regulated under any Environmental Laws.

     “Hedging Agreements” means, collectively, interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price hedging
agreements, in each case, entered into or purchased by a Credit Party.

     “Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person to the extent of the value of such property (other than
customary reservations or retentions of title under agreements with

12

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suppliers entered into in the ordinary course of business), (d) all obligations,
other than intercompany items, of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person which would
appear as liabilities on a balance sheet of such Person, (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (f) all
Guaranty Obligations of such Person, (g) the principal portion of all
obligations of such Person under (i) Capital Leases and (ii) any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product of such Person where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
operating lease in accordance with GAAP (collectively, “Synthetic Leases”),
(h) all obligations of such Person to repurchase any securities which repurchase
obligation is related to the issuance thereof, including, without limitation,
obligations commonly known as residual equity appreciation potential shares,
(i) all net obligations of such Person in respect of Hedging Agreements, (j) the
maximum amount of all performance and standby letters of credit issued or
bankers’ acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
and (k) the aggregate amount of uncollected accounts receivable of such Person
subject at such time to a sale of receivables (or similar transaction) unless
such transaction is effected without recourse to such Person. The Indebtedness
of any Person shall include the Indebtedness of any partnership or
unincorporated joint venture to the extent such Indebtedness is recourse to such
Person.

     “Indemnified Liabilities” has the meaning set forth in Section 11.5.

     “Interest Coverage Ratio” means, as of the last day of each fiscal quarter,
the ratio of (a) EBIT for the period of four fiscal quarters ending on such date
to (b) Interest Expense for the period of four fiscal quarters ending on such
date.

     “Interest Expense” means, for any period, with respect to the Borrower and
its Subsidiaries on a consolidated basis, all interest expense including the
interest component under Capital Leases, as determined in accordance with GAAP.

     “Interest Payment Date” means (a) as to Base Rate Loans, the last Business
Day of each calendar month and the Maturity Date and (b) as to Eurodollar Loans,
the last day of each applicable Interest Period and the Maturity Date and in
addition, where the applicable Interest Period for a Eurodollar Loan is greater
than three months, then also the date three months from the beginning of the
Interest Period and each three months thereafter.

     “Interest Period” means, as to Eurodollar Loans, a period of one, two,
three or six months’ duration, as the Borrower may elect, commencing, in each
case, on the date of the borrowing (including continuations and conversions
thereof); provided, however, (a) if any

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Interest Period would end on a day which is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day (except that where
the next succeeding Business Day falls in the next succeeding calendar month,
then on the next preceding Business Day), (b) no Interest Period shall extend
beyond the Maturity Date and (c) where an Interest Period begins on a day for
which there is no numerically corresponding day in the calendar month in which
the Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.

     “Investment” in any Person means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise, but
excluding Capital Expenditures and acquisitions of inventory in the ordinary
course of business) of assets, shares of Capital Stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan or
other extension of credit to, such Person (other than deposits made in
connection with the lease or purchase of equipment, inventory or other assets in
the ordinary course of business) or (c) any other capital contribution to or
investment in such Person, including, without limitation, any Guaranty
Obligation (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person.

     “Issuing Lender” means Bank of America (or any successor thereto) or such
other consenting Lender approved by Bank of America in its sole discretion.

     “Issuing Lender Fees” has the meaning set forth in Section 3.4(c).

     “Joinder Agreement” means a Joinder Agreement substantially in the form of
Exhibit 7.12.

     “Lender” means any of the Persons identified as a “Lender” on the signature
pages hereto, and any Eligible Assignee which may become a Lender by way of
assignment in accordance with the terms hereof, together with their successors
and permitted assigns.

     “Lending Office” means, as to any Lender, the office or offices of such
Lender described as such on Schedule 1.1(a), or such other office or offices as
a Lender may from time notify to the Borrower and the Administrative Agent.

     “Letter of Credit” means any letter of credit issued for the account of the
Borrower by the Issuing Lender pursuant to Section 2.2, as such letter of credit
may be amended, modified, extended, renewed or replaced.

     “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 Issuing Lender.

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     “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).

     “Leverage Ratio” means, as of the last day of each fiscal quarter, the
ratio of (a) Funded Debt on such date plus any Guaranty Obligations permitted by
Section 8.2(e) that, in the aggregate, exceed $30,000,000 to (b) EBITDA for the
period of four fiscal quarters ending on such date.

     “Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind, including, without limitation, any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, and any lease in the nature thereof.

     “Loan” or “Loans” means the Loans (or a portion of any Loan), individually
or collectively, as appropriate, made to the Borrower pursuant to Section 2.1.

     “LOC Commitment” means the commitment of the Issuing Lender to issue
Letters of Credit for the account of the Borrower in an aggregate face amount
any time outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.

     “LOC Committed Amount” means FIFTEEN MILLION DOLLARS ($15,000,000). The LOC
Committed Amount is part of, and not in addition to, the Revolving Committed
Amount.

     “LOC Documents” means, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefor (including all Letter of Credit Applications), and any
agreements, instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or providing
for (a) the rights and obligations of the parties concerned or at risk or
(b) any collateral security for such obligations.

     “LOC Obligations” means, at any time, the sum, without duplication, of
(a) the maximum amount which is, or at any time thereafter may become, available
to be drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus (b) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.

     “London Interbank Offered Rate” means, with respect to any Eurodollar Loan
for the Interest Period applicable thereto:

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     (a) the rate per annum equal to the rate determined by the Administrative
Agent to be the offered rate that appears on the page of the Telerate screen (or
any successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period, or

     (b) if the rate referenced in the preceding clause (a) does not appear on
such page or service or such page or service shall not be available, the rate
per annum equal to the rate determined by the Administrative Agent to be the
offered rate on such other page or other service that displays an average
British Bankers Association Interest Settlement Rate for deposits in Dollars
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or

     (c) if the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by the Administrative Agent as the rate
of interest at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at their request
at approximately 4:00 p.m. (London time) two Business Days prior to the first
day of such Interest Period.

     “Mandatory Borrowing” has the meaning set forth in Section 2.2(d).

     “Material Adverse Effect” means a material adverse effect on (a) the
business, assets, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole, (b) the ability of the Borrower, or of the Credit Parties taken as a
whole, to perform its or their obligations under this Credit Agreement or any of
the other Credit Documents, or (c) the validity or enforceability of this Credit
Agreement or any of the other Credit Documents, or the material rights and
remedies of the Lenders hereunder or thereunder taken as a whole.

     “Maturity Date” means June 25, 2009.

     “Moody’s” means Moody’s Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.

     “Multiemployer Plan” means a Plan which is a multiemployer plan as defined
in Sections 3(37) or 4001(a)(3) of ERISA.

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     “Multiple Employer Plan” means a Plan covered by Title IV of ERISA (other
than a Multiemployer Plan) in which the Borrower, any Subsidiary of the Borrower
or any ERISA Affiliate and at least one employer other than the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate are contributing sponsors.

     “Net Cash Proceeds” means the aggregate cash proceeds received from an
Equity Issuance net of (a) reasonably identifiable transaction costs payable to
third parties, and (b) actual taxes paid or payable with respect to such
proceeds.

     “Net Income” means, for any period, the net income after taxes for such
period of the Borrower and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.

     “Net Worth” means, as of any date, the shareholder’s equity or net worth of
the Borrower and its Subsidiaries, on a consolidated basis, as determined in
accordance with GAAP.

     “Note” or “Notes” means the promissory notes of the Borrower in favor of
each of the Lenders evidencing the Loans provided pursuant to Section 2.1,
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, supplemented, extended, renewed or replaced from time to time
and as evidenced in the form of Exhibit 2.1(e).

     “Notice of Borrowing” means a request by the Borrower for a Loan, in the
form of Exhibit 2.1(b).

     “Notice of Continuation/Conversion” means a request by the Borrower to
continue an existing Eurodollar Loan to a new Interest Period or to convert a
Eurodollar Loan to a Base Rate Loan or a Base Rate Loan to a Eurodollar Loan, in
the form of Exhibit 2.3.

     “PAI” means Polaris Acceptance, Inc., a Minnesota corporation.

     “Participation Interest” means the Extension of Credit by a Lender by way
of a purchase of a participation in Letters of Credit or LOC Obligations as
provided in Section 2.2 or in any Loans as provided in Section 3.8.

     “Participation Purchaser” shall have the meaning assigned to such term in
Section 11.3(d).

     “PBGC” means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA and any successor thereto.

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     “Permitted Acquisition” means an Acquisition by a Credit Party or any of
its Subsidiaries for consideration no greater than the fair market value of the
Capital Stock or property acquired; provided that (a) the property acquired (or
the property of the Person acquired) in such Acquisition constitutes Eligible
Assets (or goodwill associated therewith), (b) in the case of an Acquisition of
the Capital Stock of another Person, the board of directors (or other comparable
governing body) of such other Person shall have duly approved such Acquisition,
(c) if the aggregate consideration to be paid for such Acquisition equals or
exceeds $25,000,000 (including, without limitation, the amount of any
Indebtedness assumed in connection with such Acquisition), the Borrower shall
have delivered to the Administrative Agent, prior to the closing of such
Acquisition, a certificate of an Authorized Officer of the Borrower
(i) providing calculations on a pro forma basis of each of the financial
covenants set forth in Section 7.2 by giving effect to such Acquisition both
(A) as of the actual date of such Acquisition and (B) as of the first day of the
most recently ended fiscal quarter, which calculations shall demonstrate that,
as of each such date, the Credit Parties are or would have been in compliance
with all of the financial covenants set forth in Section 7.2 and (ii) both
before and after giving effect to such Acquisition, no Default or Event of
Default exists, (d) the representations and warranties made by the Credit
Parties in any Credit Document shall be true and correct in all material
respects at and as if made as of the date of such Acquisition (after giving
effect thereto) except to the extent such representations and warranties
expressly relate to an earlier date, (e) subsequent to March 31, 2003, (i) the
aggregate consideration paid and Investments made with respect to all
Acquisitions (including, without limitation, Indebtedness assumed in connection
with such Acquisitions) shall not exceed $300,000,000 and (ii) the aggregate
amount of Indebtedness assumed in connection with all Acquisitions shall not
exceed $150,000,000, (f) if such Acquisition involves the formation of a new
Subsidiary of the Borrower, such Subsidiary shall comply with Section 7.12 and
(g) such Acquisition is undertaken in accordance with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees and awards to which
any party to such Acquisition may be subject.

     “Permitted Investments” means Investments which are, without duplication,
(a) cash or Cash Equivalents, (b) trade accounts receivable created, acquired or
made in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms, (c) inventory, raw materials and general
intangibles acquired in the ordinary course of business, (d) Investments by a
Credit Party in another Credit Party, (e) Permitted Acquisitions, (f) travel
advances to management personnel and employees in the ordinary course of
business, (g) Investments existing as of the Closing Date and set forth on
Schedule 8.8, (h) additional Investments in Foreign Subsidiaries that do not
exceed $25,000,000 in the aggregate during the term of this Credit Agreement,
(i) additional Investments made pursuant to the Fuji Contract or pursuant to an
expansion of the engine manufacturing facility contemplated thereby that do not
exceed $10,000,000 in the aggregate during the term of this Credit Agreement,
(j) in accordance with Section 8.2, the

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existing Investments on Schedule 8.2(d) plus additional Investments in the form
of capital contributions by PAI in Acceptance Partnership (or by the Borrower in
PAI to make such capital contributions) in an amount not to exceed $30,000,000
in the aggregate, during the term of this Credit Agreement; it being understood
that the Borrower may not have or make any Investments in Acceptance Partnership
or PAI that constitute Guaranty Obligations (other than the obligation regarding
capital contributions as set forth herein), (k) Investments in the Equity
Reserve as required under the Revolving Program Agreement and (l) additional
Investments (in addition to those set forth above) not to exceed, in the
aggregate, $15,000,000 during the term of this Credit Agreement.

     “Permitted Liens” means (a) Liens securing all Credit Party Obligations,
(b) Liens for taxes not yet due or Liens for taxes being contested in good faith
by appropriate proceedings for which adequate reserves determined in accordance
with GAAP have been established (and as to which the property subject to any
such Lien is not yet subject to foreclosure, sale, collection, levy or loss on
account thereof), (c) Liens in respect of property imposed by law arising in the
ordinary course of business such as materialmen’s, mechanics’, warehousemen’s,
carrier’s, landlords’ and other nonconsensual statutory Liens which are not yet
due and payable or which are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with GAAP have
been established (and as to which the property subject to any such Lien is not
yet subject to foreclosure, sale or loss on account thereof), (d) Liens (other
than Liens imposed under ERISA) consisting of pledges or deposits made in the
ordinary course of business to secure payment of worker’s compensation
insurance, unemployment insurance, pensions or social security programs,
(e) Liens arising from good faith deposits in connection with or to secure
performance of tenders, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the ordinary
course of business (other than obligations in respect of the payment of borrowed
money), (f) Liens arising from good faith deposits in connection with or to
secure performance of statutory obligations and surety and appeal bonds, (g)
easements, rights-of-way, restrictions (including zoning restrictions), matters
of plat, minor defects or irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use of the encumbered
property for its intended purposes, (h) judgment Liens that would not constitute
an Event of Default, (i) Liens in connection with Indebtedness permitted by
Section 8.1(d), (j) Liens arising by virtue of any statutory or common law
provision relating to banker’s liens, rights of setoff or similar rights as to
deposit accounts or other funds maintained with a creditor depository
institution, (k) Liens existing on the date hereof and identified on
Schedule 8.3 and any renewals and extensions thereof not otherwise prohibited by
this Credit Agreement; provided that, with respect to Liens identified on
Schedule 8.3, (i) no such Lien shall extend to any property other than the
property subject thereto on the Closing Date and (ii) the principal amount of
the Indebtedness secured by such Liens shall not be increased and (l) Liens on
the Equity Reserve.

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     “Person” means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
(whether or not incorporated), or any Governmental Authority.

     “Plan” means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an
“employer” within the meaning of Section 3(5) of ERISA.

     “Polaris Participation Fee Shortfall” has the meaning assigned to such term
in the Revolving Program Agreement dated as of October 15, 2001 without giving
effect to any amendments, modifications, renewals, restatements or replacements.

     “Polaris Participation Fee Shortfall Obligations” means (a) actual amounts
paid or deducted from the Equity Reserve in connection with any Polaris
Participation Fee Shortfall plus (b) amounts in the Equity Reserve.

     “Real Properties” has the meaning given thereto in Section 6.20.

     “Regulation A, D, T, U or X” means Regulation A, D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as from
time to time in effect and any successor to all or a portion thereof.

     “Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the notice requirement has been
waived by regulation or by the PBGC.

     “Required Lenders” means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitutes more than 50% of the Credit Exposure of all
Lenders at such time; provided, however, that if any Lender shall be a
Defaulting Lender at such time then there shall be excluded from the
determination of Required Lenders the aggregate principal amount of Credit
Exposure of such Lender at such time. For purposes hereof, the term “Credit
Exposure” as applied to each Lender shall mean (a) at any time prior to the
termination of the Commitments, the sum of the Commitment Percentage of such
Lender multiplied by the Revolving Committed Amount and (b) at any time after
the termination of the Commitments, the sum of (i) the principal balance of the
outstanding Loans of such Lender plus (ii) such Lender’s Participation Interests
in the face amount of the outstanding Letters of Credit.

     “Requirement of Law” means, as to any Person, the articles or certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator

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or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is subject.

     “Revolving Committed Amount” means TWO HUNDRED FIFTY MILLION DOLLARS
($250,000,000) or such lesser amount to which the Revolving Committed Amount may
be reduced pursuant to Section 2.1(d).

     “Revolving Program Agreement” means that certain Revolving Program
Agreement entered into as of October 15, 2001, as may be amended, modified,
extended, renewed or replaced, by and between Household Bank (SB), N.A., a
national banking association, and Polaris Sales Inc., a Minnesota corporation.

     “S&P” means Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. or any successor or assignee of the business of such
division in the business of rating securities.

     “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as amended, modified, succeeded or
replaced from time to time.

     “Single Employer Plan” means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.

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

     “Subsidiary” means, as to any Person, (a) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any

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class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries, and (b) any partnership,
association, joint venture or other entity in which such person directly or
indirectly through Subsidiaries has more than a 50% equity interest at any time.

     “Synthetic Leases” has the meaning set forth in the definition of
Indebtedness in this Section 1.1.

     “Tangible Net Worth” means, as of any date, Net Worth less the book value
of those assets on the balance sheet of the Borrower and its Subsidiaries, on a
consolidated basis, that would, in accordance with GAAP, be treated as
intangibles, it being understood that deferred tax assets do not constitute
intangible assets under GAAP.

     “Total Assets” means all items that in accordance with GAAP would be
classified as assets of the Borrower and its Subsidiaries on a consolidated
basis.

     “Total Utilization” means, as of any date, the sum of the principal amounts
of (a) Loans outstanding under this Credit Agreement on such date plus (b) LOC
Obligations outstanding under this Credit Agreement on such date.

     “Utilization Fees” means the fees payable to the Lenders pursuant to
Section 3.4(b).

     “Voting Stock” means all classes of the Capital Stock of such Person then
outstanding and normally entitled to vote in the election of directors (or
similar governing authority).

     1.2 Computation of Time Periods and Other Definitional Provisions.

     For purposes of computation of periods of time hereunder, the word “from”
means “from and including” and the words “to” and “until” each mean “to but
excluding.” References in this Credit Agreement to “Articles”, “Sections”,
“Schedules” or “Exhibits” shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.

     1.3 Accounting Terms.

     Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first

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financial statements pursuant to Section 7.1, consistent with the financial
statements delivered pursuant to Section 5.1(d)); provided, however, if (a) the
Borrower shall object to determining such compliance on such basis at the time
of delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Administrative Agent or the Required
Lenders shall so object in writing within 30 days after delivery of such
financial statements, then such calculations shall be made on a basis consistent
with GAAP as in effect as of the date of the most recent financial statements
delivered by the Borrower to the Lenders to which no such objection shall have
been made.

     1.4 Time.

     All references to time herein shall be references to Eastern Standard Time
or Eastern Daylight time, as the case may be, unless specified otherwise.

     1.5 References to Agreements and Requirement of Laws.

     Unless otherwise expressly provided herein: (a) references to organization
documents, agreements (including the Credit Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent
that such amendments, restatements, extensions, supplements and other
modifications are not prohibited by any Credit Document and (b) references to
any Requirement of Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such
Requirement of Law.

     1.6 Letter of Credit Amounts.

     Unless otherwise specified, all references herein to the amount of a Letter
of Credit at any time shall be deemed to mean the maximum face amount of such
Letter of Credit after giving effect to all increases thereof contemplated by
such Letter of Credit or the LOC Documents related thereto, whether or not such
maximum face amount is in effect at such time.

SECTION 2

CREDIT FACILITIES

     2.1 Loans.

     (a) Loan Commitment. Subject to the terms and conditions set forth herein,
including but not limited to Section 5.2, each Lender severally agrees to make
revolving loans (each a “Loan” and collectively the “Loans”) to the Borrower, in
Dollars, at any time and from time to time, during the period from and including
the Effective Date to but not including the Maturity Date (or such earlier date
if the Revolving Committed Amount has

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been terminated as provided herein); provided, however, that (i) the sum of the
aggregate amount of Loans outstanding plus the aggregate amount of LOC
Obligations outstanding shall not exceed the Revolving Committed Amount and
(ii) with respect to each individual Lender, the Lender’s pro rata share of
outstanding Loans plus such Lender’s pro rata share of outstanding LOC
Obligations shall not exceed such Lender’s Commitment Percentage of the
Revolving Committed Amount. Subject to the terms of this Credit Agreement
(including Section 3.3), the Borrower may borrow, repay and reborrow Loans.

     (b) Method of Borrowing for Loans. By no later than 11:00 a.m. (i) on the
date of the requested borrowing of Loans that will be Base Rate Loans or
(ii) three Business Days prior to the date of the requested borrowing of Loans
that will be Eurodollar Loans, the Borrower shall provide telephonic notice to
the Administrative Agent, followed promptly by a written Notice of Borrowing in
the form of Exhibit 2.1(b) (which may be submitted by telecopy), each of such
telephonic notice and such written Notice of Borrowing setting forth (A) the
amount requested, (B) whether such Loans shall accrue interest at the Base Rate
or the Adjusted Eurodollar Rate, (C) with respect to Loans that will be
Eurodollar Loans, the Interest Period applicable thereto and (D) certification
that the Borrower has complied in all respects with Section 5.2.

     (c) Funding of Loans. Upon receipt of a Notice of Borrowing, the
Administrative Agent shall promptly inform the Lenders as to the terms thereof.
Each Lender shall make its Commitment Percentage of the requested Loans
available to the Administrative Agent by 1:00 p.m. on the date specified in the
Notice of Borrowing by deposit, in Dollars, of immediately available funds at
the Agency Services Address. The amount of the requested Loans will then be made
available to the Borrower by the Administrative Agent as directed by the
Borrower, to the extent the amount of such Loans are made available to the
Administrative Agent.

     (d) Reductions of Revolving Committed Amount. Upon at least three Business
Days’ prior written notice, the Borrower shall have the right to permanently
reduce, without premium or penalty, all or part of the aggregate unused amount
of the Revolving Committed Amount at any time or from time to time; provided
that (i) each partial reduction shall be in an aggregate amount at least equal
to $5,000,000 and in integral multiples of $1,000,000 above such amount and
(ii) no reduction shall be made which would reduce the Revolving Committed
Amount to an amount less than the aggregate amount of outstanding Loans plus the
aggregate amount of outstanding LOC Obligations. Any reduction in (or
termination of) the Revolving Committed Amount pursuant to this Section 2.1(d)
shall be permanent and may not be reinstated. The Administrative Agent shall
immediately notify the Lenders of any reduction in the Revolving Committed
Amount pursuant to this Section 2.1(d).

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     (e) Notes. The Loans made by each Lender shall be evidenced by a duly
executed promissory note of the Borrower to each Lender in substantially the
form of Exhibit 2.1(e).

     2.2 Letter of Credit Subfacility.

     (a) The Letter of Credit Commitment.

     (i) Subject to the terms and conditions set forth herein and other terms
and conditions that the Issuing Lender may reasonably require, (A) the Issuing
Lender agrees, in reliance upon the agreements of the Lenders set forth in this
Section 2.2, from time to time on any Business Day during the period from the
Closing Date until the Letter of Credit Expiration Date, to issue standby
Letters of Credit in Dollars for the account of the Borrower or, subject to the
terms of Section 2.2(j), certain Subsidiaries of the Borrower, and to amend
Letters of Credit previously issued by it, in each case in accordance with
subsection (b) below and (B) the Lenders severally agree to participate in
Letters of Credit issued for the account of the Borrower or, subject to the
terms of Section 2.2(j), certain Subsidiaries of the Borrower; provided,
however, that after giving effect to the issuance of any Letter of Credit
(1) the sum of the aggregate principal amount of outstanding Loans plus the
aggregate principal amount of outstanding LOC Obligations shall not exceed the
Revolving Committed Amount, (2) with respect to each individual Lender, the sum
of the aggregate principal amount of outstanding Loans of such Lender plus such
Lender’s pro rata share of the aggregate amount of LOC Obligations shall not
exceed such Lender’s Commitment Percentage of the Revolving Committed Amount and
(3) the aggregate principal amount of outstanding LOC Obligations shall not at
any time exceed the LOC Committed Amount. Within the foregoing limits, and
subject to the terms and conditions hereof, the Borrower 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 Issuing Lender shall not issue or amend 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 Issuing Lender
from issuing such Letter of Credit, or any Requirement of Law applicable to the
Issuing Lender or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over the Issuing Lender
shall prohibit, or request that the Issuing Lender refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to such Letter of Credit any
restriction, reserve or capital

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requirement (for which the Issuing Lender is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the Issuing
Lender any unreimbursed loss, cost or expense which was not applicable on the
Closing Date and which the Issuing Lender in good faith deems material to it;

     (B) the expiry date of such requested Letter of Credit would occur more
than twelve months after the date of issuance, unless the Required Lenders have
approved such expiry date;

     (C) 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;

     (D) the issuance of such Letter of Credit would violate one or more
policies of the Issuing Lender;

     (E) a default of any Lender’s obligations to fund under Section 2.2(d)
exists or any Lender is at such time a Defaulting Lender hereunder, unless the
Issuing Lender has entered into satisfactory arrangements with the Borrower or
such Lender to eliminate the Issuing Lender’s risk with respect to such Lender;
or

     (F) such Letter of Credit is in an initial amount less than $100,000
(unless otherwise agreed to by the Issuing Lender), is to be used for a purpose
other than as permitted by Section 7.10, or is denominated in a currency other
than Dollars.

     (iii) The Issuing Lender shall be under no obligation to amend any Letter
of Credit if (A) the Issuing Lender 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.

     (b) Procedures for Issuance and Amendment of Letters of Credit.

     (i) Each Letter of Credit shall be issued or amended, as the case may be,
upon the request of the Borrower delivered to the Issuing Lender (with a copy to
the Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Authorized Officer of the Borrower. The
Letter of Credit Application must be received by the Issuing Lender and the
Administrative Agent not later than 11:00 a.m. at least two Business Days (or
such later date and time as the Issuing Lender may agree in a particular
instance in

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its sole discretion) prior to the proposed issuance date or date of amendment,
as applicable. 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 Issuing Lender: (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
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 Issuing Lender 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 Issuing Lender (1) the
Letter of Credit to be amended, (2) the proposed date of amendment thereof
(which shall be a Business Day), (3) the nature of the proposed amendment and
(4) such other matters as the Issuing Lender may require.

     (ii) Promptly after receipt of any Letter of Credit Application, the
Issuing Lender 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 Borrower and, if not, the Issuing Lender will
provide the Administrative Agent with a copy thereof. Upon receipt by the
Issuing Lender of confirmation from the Administrative Agent that the requested
issuance or amendment is permitted in accordance with the terms hereof, then,
subject to the terms and conditions hereof, the Issuing Lender shall, on the
requested date, issue a Letter of Credit for the account of the Borrower or
enter into the applicable amendment, as the case may be, in each case in
accordance with the Issuing Lender’s usual and customary business practices.

     (iii) 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 Issuing Lender will also deliver to the Borrower and
the Administrative Agent a true and complete copy of such Letter of Credit or
amendment.

     (c) Participations.

     (i) On the Closing Date, each Lender shall be deemed to have purchased
without recourse a risk participation from the Issuing Lender in each Existing
Letter of Credit and the obligations arising thereunder and any collateral
relating thereto, in each case in an amount equal to its Commitment Percentage
of the obligations under such Existing Letter of Credit and be obligated to pay
to the Issuing Lender therefor and discharge when due, its Commitment Percentage
of the obligations arising under such Existing Letter of Credit.

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     (ii) Each Lender, upon issuance of a Letter of Credit, shall be deemed to
have purchased without recourse a risk participation from the Issuing Lender in
such Letter of Credit and the obligations arising thereunder and any collateral
relating thereto, in each case in an amount equal to its Commitment Percentage
of the obligations under such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and be obligated to pay to the Issuing Lender therefor and discharge when due,
its Commitment Percentage of the obligations arising under such Letter of
Credit.

     (d) Reimbursement.

     (i) In the event of any drawing under any Letter of Credit, the Issuing
Lender will promptly notify the Borrower in writing. The Borrower shall
reimburse the Issuing Lender on the day of drawing under any Letter of Credit
either with the proceeds of a Loan obtained hereunder or otherwise in
immediately available funds. If the Borrower shall fail to reimburse the Issuing
Lender as provided hereinabove, the unreimbursed amount of such drawing shall
bear interest at a per annum rate equal to the Base Rate plus two percent (2%).

     (ii) Subsequent to a drawing under any Letter of Credit, unless the
Borrower shall immediately notify the Issuing Lender of its intent to otherwise
reimburse the Issuing Lender, the Borrower shall be deemed to have requested a
Loan at the Base Rate in the amount of the drawing as described herein, the
proceeds of which will be used to satisfy the reimbursement obligations. On any
day on which the Borrower shall be deemed to have requested a Loan borrowing to
reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Lenders that a Loan has been deemed requested in connection
with a drawing under a Letter of Credit, in which case a Loan borrowing
comprised solely of Base Rate Loans (each such borrowing, a “Mandatory
Borrowing”) shall be made from all Lenders (without giving effect to any
termination of the Commitments pursuant to Section 9.2 or otherwise) not later
than 1:00 p.m. on the Business Day such notice by the Administrative Agent is
received if such notice is received before 12:00 Noon, otherwise such payment
shall be made at or before 2:00 p.m. on the next succeeding Business Day. Each
Lender that so makes funds available shall be deemed to have made a Base Rate
Loan to the Borrower in such amount. The Administrative Agent shall remit the
funds so received to the Issuing Lender pro rata based on each Lender’s
respective Commitment Percentage and the proceeds thereof shall be paid directly
to the Issuing Lender for application to the respective LOC Obligations. Each
Lender hereby irrevocably agrees to make such Loans immediately upon any such
request or deemed request on account of each such Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the same
such date

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notwithstanding (A) any setoff, counterclaim, recoupment, defense, or other
right which such Lender may have against the Issuing Lender, the Borrower or any
other Person for any reason whatsoever, (B) the amount of Mandatory Borrowing
may not comply with the minimum amount for borrowings of Loans otherwise
required hereunder, (C) the failure of any conditions specified in Section 5.2
to have been satisfied, (D) the existence of a Default or an Event of Default,
(E) the failure of any such request or deemed request for Loans to be made by
the time otherwise required hereunder, (F) the date of such Mandatory Borrowing,
or (G) any reduction in the Revolving Committed Amount or any termination of the
Commitments. This Section 2.2(d)(ii) is subject to the provisions of Section
2.2(d)(iii).

     (iii) In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or any other Credit Party), then each Lender hereby
agrees that it shall forthwith fund (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) its Participation
Interest in the outstanding LOC Obligations; provided, that in the event any
Lender shall fail to fund its Participation Interest on the day the Mandatory
Borrowing would otherwise have occurred, then the amount of such Lender’s
unfunded Participation Interest therein shall bear interest payable to the
Issuing Lender upon demand, at the rate equal to, if paid within two Business
Days of such date, the Federal Funds Rate, and thereafter at a rate equal to the
Base Rate. Simultaneously with the making of each such payment by a Lender to
the Issuing Lender, such Lender shall, automatically and without any further
action on the part of the Issuing Lender or such Lender, acquire a participation
in an amount equal to such payment (excluding the portion of such payment
constituting interest owing to the Issuing Lender) in the related unreimbursed
drawing portion of the LOC Obligation and in the interest thereon and shall have
a claim against the Borrower and the other Credit Parties with respect thereto.
Any payment by the Lenders pursuant to this clause (iii) shall not relieve or
otherwise impair the obligations of the Borrower or any Credit Party to
reimburse the Issuing Lender under a Letter of Credit.

     (iv) Until each Lender funds its Base Rate Loan or Participation Interest
pursuant to this Section 2.2(d) to reimburse the Issuing Lender 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
Issuing Lender.

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     (v) Notwithstanding anything in this Agreement to the contrary, to the
extent the conditions set forth in Section 5.2 cannot be satisfied, all Loans
arising on a Mandatory Borrowing shall be payable in full on the Business Day
immediately following the date of such Mandatory Borrowing.

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

     (i) any lack of validity or enforceability of such Letter of Credit, this
Credit Agreement, or any other agreement or instrument relating thereto;

     (ii) the existence of any claim, counterclaim, set-off, defense or other
right that the Borrower 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 Issuing Lender or any other Person,
whether in connection with this Credit 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 Issuing Lender 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 Issuing Lender 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 Bankruptcy Code; or

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

The 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 the Borrower’s instructions or other irregularity, the
Borrower will immediately

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notify the Issuing Lender. The Borrower shall be conclusively deemed to have
waived any such claim against the Issuing Lender and its correspondents unless
such notice is given as aforesaid.

     (f) Role of Issuing Lender. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the Issuing Lender 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
Issuing Lender, any Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuing Lender 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
Letter of Credit Application. The 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 the 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 Issuing Lender, any Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the Issuing Lender,
shall be liable or responsible for any of the matters described in clauses
(i) through (v) of Section 2.2(e); provided, however, that anything in such
clauses to the contrary notwithstanding, the Borrower may have a claim against
the Issuing Lender, and the Issuing Lender may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the Issuing Lender’s willful misconduct or gross negligence or the
Issuing Lender’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 Issuing Lender may
accept documents that appear on their face to be in order, without
responsibility for further investigation and the Issuing Lender 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. If, as of the Letter of Credit Expiration Date, any
Letter of Credit for any reason remains outstanding and partially or wholly
undrawn, the Borrower shall immediately Cash Collateralize the then aggregate
principal amount of all LOC Obligations (in an amount equal to such aggregate
principal amount determined as of the Letter of Credit Expiration Date). The
Borrower hereby grants to the Administrative Agent, for the benefit of the
Issuing Lender and the Lenders, a security

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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
Issuing Lender and the Borrower when a Letter of Credit is issued (including any
such agreement applicable to an Existing Letter of Credit), (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) Conflict with Letter of Credit Application. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.

     (j) Designation of Subsidiaries as Account Parties. Notwithstanding
anything to the contrary set forth in this Credit Agreement and any LOC
Document, a Letter of Credit issued hereunder may contain a statement to the
effect that such Letter of Credit is issued for the account of a Subsidiary of
the Borrower; provided that notwithstanding such statement, the Borrower shall
be the actual account party for all purposes of this Credit Agreement for such
Letter of Credit and such statement shall not affect the Borrower’s
reimbursement obligations hereunder with respect to such Letter of Credit.

     (k) Indemnification of Issuing Lender.

     (i) In addition to its other obligations under this Credit Agreement, the
Credit Parties hereby agree to protect, indemnify, pay and hold the Issuing
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable Attorney
Costs) that the Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or Governmental Authority (all such acts
or omissions, herein called “Government Acts”).

     (ii) As between the Credit Parties and the Issuing Lender, the Credit
Parties shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. In the absence of gross negligence or willful
misconduct, the Issuing Lender shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any Letter of Credit, even if it should in fact prove to be in any or all
respects invalid,

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insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, that may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of a Letter of Credit to comply fully with
conditions required in order to draw upon a Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;
(E) errors in interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (G) any consequences
arising from causes beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall affect, impair, or
prevent the vesting of the Issuing Lender’s rights or powers hereunder.

     (iii) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put the Issuing
Lender under any resulting liability to the Borrower or any other Credit Party.
It is the intention of the parties that this Credit Agreement shall be construed
and applied to protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all of which risks are
hereby assumed by the Credit Parties, including, without limitation, any and all
risks of the acts or omissions, whether rightful or wrongful, of any present or
future Government Acts. The Issuing Lender shall not, in any way, be liable for
any failure by the Issuing Lender or anyone else to pay any drawing under any
Letter of Credit as a result of any Government Acts or any other cause beyond
the control of the Issuing Lender.

     (iv) Nothing in this subsection (k) is intended to limit the reimbursement
obligation of the Credit Parties contained in this Section 2.2. The obligations
of the Credit Parties under this subsection (k) shall survive the termination of
this Credit Agreement. No act or omission of any current or prior beneficiary of
a Letter of Credit shall in any way affect or impair the rights of the Issuing
Lender to enforce any right, power or benefit under this Credit Agreement.

     (l) Letter of Credit Amounts. Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed to mean
the maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the Letter of Credit
Application therefor, whether or not such maximum face amount is in effect at
such time.

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     2.3 Continuations and Conversions.

     Subject to the terms below, the Borrower shall have the option, on any
Business Day, to continue existing Eurodollar Loans for a subsequent Interest
Period, to convert Base Rate Loans into Eurodollar Loans or to convert
Eurodollar Loans into Base Rate Loans. By no later than 11:00 a.m. (a) on the
date of the requested conversion of a Eurodollar Loan to a Base Rate Loan or
(b) three Business Days prior to the date of the requested continuation of a
Eurodollar Loan or conversion of a Base Rate Loan to a Eurodollar Loan, the
Borrower shall provide telephonic notice to the Administrative Agent, followed
promptly by a written Notice of Continuation/Conversion, in the form of Exhibit
2.3 setting forth (i) whether the Borrower wishes to continue or convert such
Loans and (ii) if the request is to continue a Eurodollar Loan or convert a Base
Rate Loan to a Eurodollar Loan, the Interest Period applicable thereto.
Notwithstanding anything herein to the contrary, (A) except as provided in
Section 3.11, Eurodollar Loans may only be continued or converted into Base Rate
Loans on the last day of the Interest Period applicable thereto, (B) Eurodollar
Loans may not be continued nor may Base Rate Loans be converted into Eurodollar
Loans during the existence and continuation of a Default or an Event of Default
and (C) any request to continue a Eurodollar Loan that fails to comply with the
terms hereof or any failure to request a continuation of a Eurodollar Loan at
the end of an Interest Period shall constitute a conversion to a Base Rate Loan
on the last day of the applicable Interest Period.

     2.4 Minimum Amounts.

     Each request for a borrowing, conversion or continuation shall be subject
to the requirements that (a) each Eurodollar Loan shall be in a minimum amount
of $5,000,000 and in integral multiples of $1,000,000 in excess thereof, (b)
each Base Rate Loan shall be in a minimum amount of the lesser of $5,000,000
(and integral multiples of $1,000,000 in excess thereof) or the remaining amount
available under the Revolving Committed Amount and (c) no more than ten
(10) Eurodollar Loans shall be outstanding hereunder at any one time. For the
purposes of this Section 2.4, all Eurodollar Loans with the same Interest
Periods that begin and end on the same date shall be considered as one
Eurodollar Loan, but Eurodollar Loans with different Interest Periods, even if
they begin on the same date, shall be considered as separate Eurodollar Loans.

SECTION 3

GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT

     3.1 Interest.

     (a) Interest Rate. Subject to Section 3.1(b), all Base Rate Loans shall
accrue interest at the Base Rate and all Eurodollar Loans shall accrue interest
at the Adjusted Eurodollar Rate.

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     (b) Default Rate of Interest.

     (i) Upon the occurrence, and during the continuation, of an Event of
Default pursuant to Section 9.1(a), the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing hereunder or
under the other Credit Documents (including without limitation fees and
expenses) shall bear interest, payable on demand, at a per annum rate equal to
2% plus the rate which would otherwise be applicable (or if no rate is
applicable, then the Base Rate plus two percent (2%) per annum).

     (ii) Upon the occurrence, and during the continuation, of an Event of
Default (other than pursuant to Section 9.1(a)), then upon the request of the
Required Lenders, the principal of and, to the extent permitted by law, interest
on the Loans and any other amounts owing hereunder or under the other Credit
Documents (including without limitation fees and expenses) shall bear interest,
payable on demand, at a per annum rate equal to 2% plus the rate which would
otherwise be applicable (or if no rate is applicable, then the Base Rate plus
two percent (2%) per annum).

     (c) Interest Payments. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date. If an Interest Payment Date falls on a
date which is not a Business Day, such Interest Payment Date shall be deemed to
be the next succeeding Business Day, except that in the case of Eurodollar Loans
where the next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding Business Day.

     3.2 Place and Manner of Payments.

     (a) All payments of principal, interest, fees, expenses and other amounts
to be made by a Credit Party under this Credit Agreement shall be made
unconditionally and without any setoff, deduction, counterclaim, defense,
recoupment or withholding of any kind and received not later than 2:00 p.m. on
the date when due, in Dollars and in immediately available funds, to the
Administrative Agent at the Agency Services Address. Payments received after
such time shall be deemed to have been received on the next Business Day and
additional interest shall accrue and be payable for such additional period. The
Borrower shall, at the time it makes any payment under this Credit Agreement,
specify to the Administrative Agent the Loans, Letters of Credit, fees or other
amounts payable by the Borrower hereunder to which such payment is to be applied
(and in the event that it fails to specify, or if such application would be
inconsistent with the terms hereof, the Administrative Agent shall, subject to
Section 3.7, distribute such payment to the Lenders in such manner as the
Administrative Agent may reasonably deem appropriate). The Administrative Agent
will distribute such payments to the Lenders on the same Business Day if any
such payment is received at or before 2:00 p.m.; otherwise the Administrative
Agent will distribute such payment to the Lenders on the next succeeding
Business Day. Whenever any payment hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and fees for the period
of such

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extension), except that, in the case of Eurodollar Loans, if the extension would
cause the payment to be made in the next following calendar month, then such
payment shall instead be made on the next preceding Business Day.

     (b) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the time any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:

     (i) if the Borrower failed to make such payment, each Lender shall
forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately available
funds, together with interest thereon in respect of each day from and including
the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is repaid to the Administrative Agent in
immediately available funds at the Federal Funds Rate from time to time in
effect; and

     (ii) if any Lender failed to make such payment, such Lender shall forthwith
on demand pay to the Administrative Agent the amount thereof in immediately
available funds, together with interest thereon for the period from the date
such amount was made available by the Administrative Agent to the Borrower to
the date such amount is recovered by the Administrative Agent (the “Compensation
Period”) at a rate per annum equal to the Federal Funds Rate from time to time
in effect. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in the applicable
Borrowing. If such Lender does not pay such amount forthwith upon the
Administrative Agent’s demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation Period
at a rate per annum equal to the rate of interest applicable to the applicable
Borrowing. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a result of
any default by such Lender hereunder.

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

     (c) 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
Section 3.2, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Extension of
Credit set forth in Section 2.1 are not satisfied or waived in

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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, without prejudice to such Lender’s rights against the Borrower under
Section 3.14(b).

     (d) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit are several and not joint. The failure of
any Lender to make any Loan or to fund any such participation 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 Loan or purchase its participation.

     (e) 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.

     3.3 Prepayments.

     (a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time without premium or penalty;
provided, however, that (i) Eurodollar Loans may only be prepaid on three
Business Days’ prior written notice to the Administrative Agent and any
prepayment of Eurodollar Loans will be subject to Section 3.14, (ii) each such
partial prepayment of Eurodollar Loans shall be in the minimum principal amount
of $5,000,000 and integral multiples of $1,000,000 and (iii) each such partial
prepayment of Base Rate Loans shall be in the minimum principal amount of
$5,000,000 and integral multiples of $1,000,000. Amounts prepaid pursuant to
this Section 3.3(a) shall be applied as the Borrower may elect; however, if the
Borrower fails to specify, such prepayment will be applied in the manner set
forth in Section 3.3(c) below.

     (b) Mandatory Prepayments. If at any time the sum of the aggregate amount
of Loans outstanding plus LOC Obligations outstanding exceeds the Revolving
Committed Amount, the Borrower shall immediately make a principal payment to the
Administrative Agent in the manner and in an amount such that the sum of the
aggregate amount of Loans outstanding plus LOC Obligations outstanding is less
than or equal to the Revolving Committed Amount.

     (c) Application of Prepayments. All amounts paid pursuant to
Section 3.3(a), if the Borrower has not otherwise elected an application of such
amounts, and all amounts required to be prepaid pursuant to Section 3.3(b) shall
be applied first to Loans and second to a cash collateral account in respect of
LOC Obligations. Within the parameters of the applications set forth above,
prepayments shall be applied first to Base Rate Loans and then to Eurodollar
Loans in direct order of Interest Period maturities. All prepayments hereunder
shall be subject to Section 3.14.

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     3.4 Fees.

     (a) Facility Fees. In consideration of the Revolving Committed Amount being
made available by the Lenders hereunder, the Borrower agrees to pay to the
Administrative Agent, for the pro rata benefit of each Lender (based on such
Lender’s Commitment Percentage of the Revolving Committed Amount), a per annum
fee equal to the Applicable Percentage for Facility Fees (the “Facility Fees”).
The Facility Fees shall commence to accrue on the Closing Date and shall be due
and payable in arrears on the last Business Day of each fiscal quarter of the
Borrower (as well as on the Maturity Date and on any date that the Revolving
Committed Amount is reduced) for the immediately preceding fiscal quarter (or
portion thereof), beginning with the first of such dates to occur after the
Closing Date.

     (b) Utilization Fees.

     (i) For each day that Total Utilization exceeds an amount equal to fifty
percent (50%) of the Revolving Committed Amount, the Borrower shall pay to the
Administrative Agent, for the pro rata benefit of each Lender (based on such
Lender’s Commitment Percentage), a per annum fee equal to (A) .125% multiplied
by (B) the sum of the principal amount of Loans outstanding on such day plus the
principal amount of LOC Obligations outstanding on such day (the “Utilization
Fees”).

     (ii) The Utilization Fees, if any, shall commence to accrue on the Closing
Date and shall be due and payable in arrears on the last Business Day of each
fiscal quarter of the Borrower (as well as on the Maturity Date and on any date
that the Revolving Committed Amount is reduced) for the immediately preceding
fiscal quarter (or portion thereof), beginning with the first of such dates to
occur after the Closing Date.

     (c) Letter of Credit Fees.

     (i) Letter of Credit Fees. In consideration of the issuance of Letters of
Credit hereunder, the Borrower agrees to pay to the Administrative Agent, for
the pro rata benefit of each Lender (based on each Lender’s Commitment
Percentage), a per annum fee (the “Letter of Credit Fees”) equal to the
Applicable Percentage for the Letter of Credit Fees on the average daily maximum
amount available to be drawn under each such Letter of Credit from the date of
issuance to the date of expiration. The Letter of Credit Fees will be payable in
arrears on the last Business Day of each fiscal quarter of the Borrower (as well
as on the Maturity Date) for the immediately preceding fiscal quarter (or
portion thereof), beginning with the first of such dates to occur after the
Closing Date.

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     (ii) Issuing Lender Fees. The Borrower shall pay directly to the Issuing
Lender for its own account a fronting fee with respect to each Letter of Credit
in an amount equal to 0.125% times the daily maximum amount available to be
drawn under such Letter of Credit (the “L/C Fronting Fee”). The L/C Fronting Fee
shall be computed on a quarterly basis in arrears and shall be due and payable
on the last Business Day of each fiscal quarter of the Borrower (as well as on
the Letter of Credit Expiration Date) for the fiscal quarter (or portion
thereof) then ending, beginning with the first of such dates to occur after the
issuance of such Letter of Credit. In addition, the Borrower shall pay directly
to the Issuing Lender for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
the Issuing Lender 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.

     (d) Other Fees. The Borrower agrees to pay (i) to the Administrative Agent,
for its own account, an annual fee and (ii) to the Administrative Agent, for the
account of each of the Lenders, upfront fees on the Closing Date, in each case
in accordance with the terms of the Fee Letter.

     3.5 Payment in full at Maturity.

     On the Maturity Date, the entire outstanding principal balance of all Loans
and all LOC Obligations, together with accrued but unpaid interest and all other
sums owing with respect thereto, shall be due and payable in full, unless
accelerated sooner pursuant to Section 9.

     3.6 Computations of Interest and Fees.

     (a) Except for Base Rate Loans that are based upon the Prime Rate, in which
case interest shall be computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be, all computations of
interest and fees hereunder shall be made on the basis of the actual number of
days elapsed over a year of 360 days. Interest shall accrue from and include the
date of borrowing (or continuation or conversion) but exclude the date of
payment.

     (b) It is the intent of the Lenders and the Credit Parties to conform to
and contract in strict compliance with applicable usury law from time to time in
effect. All agreements between the Lenders and the Credit Parties are hereby
limited by the provisions of this paragraph which shall override and control all
such agreements, whether now existing or hereafter arising and whether written
or oral. In no way, nor in any event or contingency (including but not limited
to prepayment or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged, or received under this Credit
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction of any of
the Credit

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Documents or any other document, interest would otherwise be payable in excess
of the maximum nonusurious amount, any such construction shall be subject to the
provisions of this paragraph and such documents shall be automatically reduced
to the maximum nonusurious amount permitted under applicable law, without the
necessity of execution of any amendment or new document. If any Lender shall
ever receive anything of value which is characterized as interest on the Loans
under applicable law and which would, apart from this provision, be in excess of
the maximum nonusurious amount, an amount equal to the amount which would have
been excessive interest shall, without penalty, be applied to the reduction of
the principal amount owing on the Loans and not to the payment of interest, or
refunded to the Borrower or the other payor thereof if and to the extent such
amount which would have been excessive exceeds such unpaid principal amount of
the Loans. The right to demand payment of the Loans or any other Indebtedness
evidenced by any of the Credit Documents does not include the right to
accelerate the payment of any interest which has not otherwise accrued on the
date of such demand, and the Lenders do not intend to charge or receive any
unearned interest in the event of such demand. All interest paid or agreed to be
paid to the Lenders with respect to the Loans shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term (including any renewal or extension) of the Loans so that the
amount of interest on account of such Indebtedness does not exceed the maximum
nonusurious amount permitted by applicable law.

     3.7 Pro Rata Treatment.

     Except to the extent otherwise provided herein:

     (a) Loans. Each Loan borrowing (including, without limitation, each
Mandatory Borrowing), each payment or prepayment of principal of any Loan, each
payment of fees (other than the Issuing Lender Fees retained by the Issuing
Lender for its own account and the fees retained by the Administrative Agent for
its own account), each reduction of the Revolving Committed Amount, and each
conversion or continuation of any Loan, shall (except as otherwise provided in
Section 3.11) be allocated pro rata among the relevant Lenders in accordance
with the respective Commitment Percentages of such Lenders (or, if the
Commitments of such Lenders have expired or been terminated, in accordance with
the respective principal amounts of the outstanding Loans and Participation
Interests of such Lenders); provided that, if any Lender shall have failed to
pay its applicable pro rata share of any Loan, then any amount to which such
Lender would otherwise be entitled pursuant to this subsection (a) shall instead
be payable to the Administrative Agent until the share of such Loan not funded
by such Lender has been repaid; provided further, that in the event any amount
paid to any Lender pursuant to this subsection (a) is rescinded or must
otherwise be returned by the Administrative Agent, each Lender shall, upon the
request of the Administrative Agent, repay to the Administrative Agent the
amount so paid to such Lender, with interest for the period commencing on the
date such payment is returned by the Administrative Agent until the date the
Administrative

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Agent receives such repayment at a rate per annum equal to, during the period to
but excluding the date two Business Days after such request, the Federal Funds
Rate, and thereafter, the Base Rate plus two percent (2%) per annum; and

     (b) Letters of Credit. Each payment of unreimbursed drawings in respect of
LOC Obligations shall be allocated to each Lender pro rata in accordance with
its Commitment Percentage; provided that, if any Lender shall have failed to pay
its applicable pro rata share of any drawing under any Letter of Credit, then
any amount to which such Lender would otherwise be entitled pursuant to this
subsection (b) shall instead be payable to the Issuing Lender until the share of
such unreimbursed drawing not funded by such Lender has been repaid; provided
further, that in the event any amount paid to any Lender pursuant to this
subsection (b) is rescinded or must otherwise be returned by the Issuing Lender,
each Lender shall, upon the request of the Issuing Lender, repay to the
Administrative Agent for the account of the Issuing Lender the amount so paid to
such Lender, with interest for the period commencing on the date such payment is
returned by the Issuing Lender until the date the Issuing Lender receives such
repayment at a rate per annum equal to, during the period to but excluding the
date two Business Days after such request, the Federal Funds Rate, and
thereafter, the Base Rate plus two percent (2%) per annum.

     3.8 Sharing of Payments.

     The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan, unreimbursed drawing with respect to any LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker’s lien or counterclaim, or pursuant to a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly pay in cash or purchase
from the other Lenders a participation in such Loans, LOC Obligations, and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker’s lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by payment in cash or a repurchase of a participation
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such a participation may, to the fullest extent permitted
by law, exercise all rights of payment, including setoff, banker’s lien or
counterclaim, with respect to such participation as fully as if such Lender were
a holder of such Loan, LOC Obligation or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Administrative Agent shall fail to remit to any other
Lender an amount payable by such Lender or

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the Administrative Agent to such other Lender pursuant to this Credit Agreement
on the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to the Administrative Agent or such other Lender at a rate
per annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section 3.8 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Section 3.8 to share in the
benefits of any recovery on such secured claim.

     3.9 Capital Adequacy.

     (a) If, after the date thereof, the adoption or the becoming effective of,
or any change in, any law, rule or regulation or other Requirement of Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by any Lender (or its Lending Office) therewith, has or
would have the effect of reducing the rate of return on the capital or assets of
such Lender or any corporation controlling such Lender as a consequence of such
Lender’s obligations hereunder (taking into consideration its policies with
respect to capital adequacy and such Lender’s desired return on capital), then
from time to time within 10 days of demand of such Lender setting forth in
reasonable detail such change in law and the calculation of such reduced rate of
return (with a copy of such demand to the Administrative Agent), the Borrower
shall pay to such Lender such additional amounts as will compensate such Lender
for such reduction.

     (b) The Borrower shall not be required to compensate a Lender pursuant to
this Section 3.9 for any additional amounts incurred more than 180 days prior to
the date that such Lender notifies the Borrower of the change in law giving rise
to such additional amounts and of such Lender’s intention to claim compensation
therefor.

     3.10 Inability To Determine Interest Rate.

     If the Administrative Agent determines (which determination shall be
conclusive and binding upon the Borrower) in connection with any request for a
Eurodollar Loan or a conversion to or continuation thereof that (a) Dollar
deposits are not being offered to banks in the applicable offshore Dollar market
for the applicable amount and Interest Period of such Eurodollar Loan,
(b) adequate and reasonable means do not exist for determining the Eurodollar
Rate for such Eurodollar Loan, or (c) the Eurodollar Rate for such Eurodollar
Loan does not adequately and fairly reflect the cost to the Lenders of funding
such Eurodollar Loan, the Administrative Agent will promptly notify the Borrower
and all the Lenders. Thereafter, the obligation of the Lenders to make or
maintain Eurodollar Loans shall be suspended until the Administrative Agent
revokes such notice. Upon receipt of such notice, the Borrower may revoke any
pending Notice of Borrowing or Notice of Continuation/Conversion with respect to
Eurodollar Loans or, failing

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that, will be deemed to have converted such request into a request for a
borrowing of or conversion into a Base Rate Loan in the amount specified
therein. The Administrative Agent will withdraw such determination pursuant to
this Section 3.10 promptly as circumstances allow and no such suspension shall
affect the Eurodollar Rate for any Eurodollar Loan outstanding at the time such
suspension is imposed.

     3.11 Illegality.

     If any Requirement of 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 Loans, then, on notice
thereof by such Lender to the Borrower through the Administrative Agent, any
obligation of such Lender to make or continue Eurodollar Loans or to convert
Base Rate Loans to Eurodollar Loans shall be suspended until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice, the
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), convert all Eurodollar Loans of such Lender to Base Rate Loans, either
on the last day of the Interest Period thereof, if such Lender may lawfully
continue to maintain such Eurodollar Loans to such day, or immediately, if such
Lender may not lawfully continue to maintain such Eurodollar Loans. Upon any
such conversion, the Borrower shall also pay interest on the amount so
converted, together with any amounts due with respect thereto pursuant to
Section 3.14. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such Lender.

     3.12 Requirements of Law.

     (a) If, after the date hereof, as a result of the introduction of or any
change in, or in the interpretation of, any Requirement of Law, or a Lender’s
compliance therewith, there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining Eurodollar Loans or (as the
case may be) issuing or participating in Letters of Credit, or a reduction in
the amount received or receivable by such Lender in connection with any of the
foregoing (excluding for purposes of this subsection (a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which Section 3.13 shall govern) and (ii) reserve requirements utilized in the
determination of the Eurodollar Rate), then from time to time, within 10 days of
demand of such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction in yield.

     (b) Each Lender shall promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Lender to compensation pursuant to this Section 3.12 and
will designate a different Lending Office if such designation will avoid the
need for, or reduce the amount

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of, such compensation and will not, in the reasonable judgment of such Lender,
be otherwise materially disadvantageous to it. Any Lender claiming compensation
under this Section 3.12 shall furnish to the Borrower and the Administrative
Agent a statement setting forth in reasonable detail the additional amount or
amounts to be paid to it hereunder which shall be conclusive absent manifest
error.

     (c) The Borrower shall not be required to compensate a Lender pursuant to
this Section 3.12 for any increased costs or reductions incurred more than
180 days prior to the date that such Lender notifies the Borrower of the change
of law giving rise to such increased costs or reductions and of such Lender’s
intention to claim compensation therefor.

     3.13 Taxes.

     (a) Any and all payments by a Credit Party to or for the account of the
Administrative Agent or any Lender under any Credit Document shall be made free
and clear of and without deduction for any and all present or future income,
stamp or other taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect thereto, but
excluding, in the case of the Administrative Agent and each Lender, taxes
imposed on or measured by its net income, 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 the Administrative Agent or such Lender, as the
case may be, is organized or maintains its Lending Office (all such non-excluded
taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or
similar charges, and liabilities being hereinafter referred to as “Taxes”). If a
Credit Party shall be required by any Requirement of Law to deduct any Taxes
from or in respect of any sum payable under any Credit Document to the
Administrative Agent or any Lender, (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 3.13(a)), the
Administrative Agent and such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Credit Party
shall make such deductions, (iii) such Credit Party shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable Requirements of Law, and (iv) within 30 days after the date of
such payment, such Credit Party shall furnish to the Administrative Agent (which
shall forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof. Notwithstanding the foregoing, no additional
sums shall be payable pursuant to this Section 3.13(a) with respect to Taxes
(A) that are attributable to a Lender’s failure to comply with Section 3.13(e)
or (B) that are United States withholding taxes imposed on amounts payable to
such Lender at the time the Lender becomes a party to this Credit Agreement.

     (b) In addition, each Credit Party agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or

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similar levies which arise from any payment made under any Credit Document or
from the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Credit Document (hereinafter referred to as
“Other Taxes”).

     (c) If a Credit Party shall be required to deduct or pay any Taxes or Other
Taxes from or in respect of any sum payable under any Credit Document to the
Administrative Agent or any Lender, such Credit Party shall also pay to the
Administrative Agent (for the account of such Lender) or to such Lender, at the
time interest is paid, such additional amount that such Lender specifies as
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Lender would have
received if such Taxes or Other Taxes had not been imposed.

     (d) Each Credit Party agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 3.13(d)) paid by the Administrative Agent and such Lender,
(ii) amounts payable under Section 3.13(c) and (iii) any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.

     (e) Each Lender that is a “foreign corporation, partnership or trust”
within the meaning of the Code shall deliver to the Administrative Agent, prior
to receipt of any payment subject to withholding under the Code (or after
accepting an assignment of an interest herein), two duly signed completed copies
of either IRS Form W-8BEN or any successor thereto (relating to such Lender and
entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Lender by a Credit Party pursuant to this Agreement)
or IRS Form W-8ECI or any successor thereto (relating to all payments to be made
to such Lender by a Credit Party pursuant to this Agreement) or such other
evidence satisfactory to the Borrower and the Administrative Agent that such
Lender is entitled to an exemption from, or reduction of, U.S. withholding tax.
Thereafter and from time to time, each such Lender shall (i) promptly submit to
the Administrative Agent such additional duly completed and signed copies of one
of such forms (or such successor forms as shall be adopted from time to time by
the relevant United States taxing authorities) as may then be available under
then current United States laws and regulations to avoid, or such evidence as is
satisfactory to the Borrower and the Administrative Agent of any available
exemption from or reduction of, United States withholding taxes in respect of
all payments to be made to such Lender by a Credit Party pursuant to this
Agreement, (ii) promptly notify the Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and
(iii) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any Requirement of
Law that the Credit

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Parties make any deduction or withholding for taxes from amounts payable to such
Lender. If such Lender fails to deliver the above forms or other documentation,
then the Administrative Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction. If any Governmental
Authority asserts that the Administrative Agent did not properly withhold any
tax or other amount from payments made in respect of such Lender, such Lender
shall indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section 3.13(e), and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation of the
Lenders under this Section 3.13(e) shall survive the payment of all Obligations
and the resignation or replacement of the Administrative Agent.

     (f) For any period with respect to which a Lender required to do so has
failed to provide the Borrower and the Administrative Agent with the appropriate
form pursuant to Section 3.13(e) (unless such failure is due to a change in
treaty, law or regulation occurring subsequent to that date on which a form
originally was required to be provided), such Lender shall not be entitled to
indemnification under Section 3.13(a) or 3.13(b) with respect to Taxes imposed
by the United States of America; provided however, that should a Lender that is
otherwise exempt from withholding tax become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower shall take such steps
as such Lender shall reasonably request to assist such Lender to recover such
Taxes.

     (g) If any Credit Party is required to pay any additional amounts to or for
the account of any Lender pursuant to this Section 3.13, then such Lender shall
use reasonable efforts to change the jurisdiction of its Lending Office so as to
eliminate or reduce any such additional payment which may thereafter accrue if
such change, in the judgment of such Lender, is not otherwise materially
disadvantageous to such Lender.

     (h) If the Administrative Agent or any Lender receives a refund with
respect to Taxes paid by the Borrower that, in the good faith judgment of such
Lender, is allocable to such payment, the Administrative Agent or such Lender,
respectively, shall promptly pay the amount of such refund, together with any
other amounts paid by the Borrower in connection with such refunded Taxes to the
extent such other amounts are received by the Administrative Agent or such
Lender, to the Borrower, net of all out-of-pocket expenses of such Lender
incurred in obtaining such refund, provided, however, that the Borrower agrees
to promptly return such refund and such other amounts to the Administrative
Agent or such Lender, as applicable, if it receives notice from the
Administrative Agent or such Lender that the Administrative Agent or such Lender
is required to repay such refund to the applicable taxing authority. The
Administrative Agent and each Lender agrees that it will contest such Taxes or
liabilities if the

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Administrative Agent or such Lender determined, in its reasonable judgment, that
it would not be disadvantaged or prejudiced as a result of such contest.

     3.14 Compensation.

     Upon the written demand of any Lender, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:

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

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

The amount each such Lender shall be compensated pursuant to this Section 3.14
shall include (a) any loss incurred by such Lender in connection with the
re-employment of funds prepaid, repaid, not borrowed or paid, as the case may
be, and the amount of such loss shall be the excess, if any, of (i) interest or
other cost to such Lender of the deposit or other source of funding used to make
any such Eurodollar Loan over (ii) the interest earned (or to be earned) by such
Lender upon the re-lending or other re-employment of the amount of such
Eurodollar Loan for the remainder of its respective Interest Period plus (b) any
other loss of anticipated profits and any loss or expense arising from the
liquidation or re-employment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained
plus (c) $250 plus (d) any reasonable out-of-pocket expenses (including Attorney
Costs) incurred and reasonably attributable thereto. Any Lender claiming
compensation under this Section 3.14 shall furnish to the Borrower and the
Administrative Agent a statement setting forth in reasonable detail the
calculations of amounts to be paid hereunder, and the Borrower shall not be
required to compensate a Lender pursuant to this Section 3.14 for any such loss,
cost or expense incurred more than 180 days prior to the date that such Lender
notifies the Borrower of the incurrence of such loss, cost or expense.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.14, each Lender may deem that it funded each Eurodollar Loan made
by it at the Eurodollar Rate for such Eurodollar Loan by a matching deposit or
other borrowing in the applicable offshore Dollar interbank market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Loan was in fact so funded.

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     3.15 Determination and Survival of Provisions.

     All determinations by the Administrative Agent or a Lender of amounts owing
under Sections 3.9 through 3.14, inclusive, shall, absent manifest error, be
conclusive and binding on the parties hereto. In determining such amount, the
Administrative Agent or such Lender may use any reasonable averaging and
attribution methods. Section 3.9 through 3.14, inclusive, shall survive the
termination of this Credit Agreement and the payment of all Credit Party
Obligations.

SECTION 4

GUARANTY

     4.1 Guaranty of Payment.

     Subject to Section 4.7 below, each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably guarantees to each Lender, each
Affiliate of a Lender that enters into a Hedging Agreement, the Issuing Lender
and the Administrative Agent the prompt payment of the Credit Party Obligations
in full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) and the timely performance of all other obligations
under the Credit Documents and such Hedging Agreements. This Guaranty is a
guaranty of payment and not of collection and is a continuing guaranty and shall
apply to all Credit Party Obligations whenever arising.

     4.2 Obligations Unconditional.

     The obligations of the Guarantors hereunder are absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Credit Documents or the Hedging Agreements, or any other agreement
or instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the Notes
or any other of the Credit Documents or any collateral, if any, hereafter
securing the Credit Party Obligations or otherwise and each Guarantor hereby
waives the right to require the Lenders to proceed against the Borrower or any
other Person (including a co-guarantor) or to require the Lenders to pursue any
other remedy or enforce any other right. Each Guarantor further agrees that it
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Credit Party Obligations for
amounts paid under this Guaranty until such time as the Lenders (and any
Affiliates of Lenders entering into Hedging Agreements) have been paid in full,
all Commitments under the Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received

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under the Credit Documents. Each Guarantor further agrees that nothing contained
herein shall prevent the Lenders from suing on the Notes or any of the other
Credit Documents or any of the Hedging Agreements or foreclosing its security
interest in or Lien on any collateral, if any, securing the Credit Party
Obligations or from exercising any other rights available to it under this
Credit Agreement, the Notes, any other of the Credit Documents, or any other
instrument of security, if any, and the exercise of any of the aforesaid rights
and the completion of any foreclosure proceedings shall not constitute a
discharge of any of any Guarantor’s obligations hereunder; it being the purpose
and intent of each Guarantor that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances. Neither any
Guarantor’s obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by an impairment, modification, change, release or limitation of the
liability of the Borrower or by reason of the bankruptcy or insolvency of the
Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of reliance of by the Administrative Agent or any Lender upon this
Guaranty or acceptance of this Guaranty. The Credit Party Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guaranty. All dealings between the Borrower and any of the Guarantors, on the
one hand, and the Administrative Agent and the Lenders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guaranty. The Guarantors further agree to all rights of
set-off and automatic debits as set forth in Section 11.2.

     4.3 Modifications.

     Each Guarantor agrees that (a) all or any part of the collateral, if any,
now or hereafter held for the Credit Party Obligations, if any, may be
exchanged, compromised or surrendered from time to time; (b) the Lenders shall
not have any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the Credit
Party Obligations or the properties subject thereto; (c) the time or place of
payment of the Credit Party Obligations may be changed or extended, in whole or
in part, to a time certain or otherwise, and may be renewed or accelerated, in
whole or in part; (d) the Borrower and any other party liable for payment under
the Credit Documents may be granted indulgences generally; (e) any of the
provisions of the Notes or any of the other Credit Documents may be modified,
amended or waived; (f) any party (including any co-guarantor) liable for the
payment thereof may be granted indulgences or be released; and (g) any deposit
balance for the credit of the Borrower or any other party liable for the payment
of the Credit Party Obligations or liable upon any security therefor may be
released, in whole or in part, at, before or after the stated, extended or
accelerated maturity of the Credit Party Obligations, all without notice to or
further assent by such Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.

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     4.4 Waiver of Rights.

     Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders’ subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; and (e) all other notices to which
such Guarantor might otherwise be entitled.

     4.5 Reinstatement.

     The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable Attorney Costs) incurred by
the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.

     4.6 Remedies.

     The Guarantors agree that, as between the Guarantors, on the one hand, and
the Administrative Agent and the Lenders, on the other hand, the Credit Party
Obligations may be declared to be forthwith due and payable as provided in
Section 9 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors.

     4.7 Limitation of Guaranty.

     Notwithstanding any provision to the contrary contained herein or in any of
the other Credit Documents, to the extent the obligations of any Guarantor shall
be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or

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federal law relating to fraudulent conveyances or transfers) then the
obligations of such Guarantor hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state or otherwise
and including, without limitation, the Bankruptcy Code).

     4.8 Rights of Contribution.

     The Credit Parties agree among themselves that, in connection with payments
made hereunder, each Credit Party shall have contribution rights against the
other Credit Parties as permitted under applicable law. Such contribution rights
shall be subordinate and subject in right of payment to the obligations of the
Credit Parties under the Credit Documents and no Credit Party shall exercise
such rights of contribution until all Credit Party Obligations have been paid in
full and the Commitments terminated.

SECTION 5

CONDITIONS PRECEDENT

     5.1 Closing Conditions.

     The obligation of the Lenders, the Administrative Agent and the Issuing
Lender to enter into this Credit Agreement and make the initial Extension of
Credit is subject to satisfaction (or waiver) of the following conditions:

     (a) Executed Credit Documents. Receipt by the Administrative Agent of duly
executed copies of: (i) this Credit Agreement; (ii) the Notes; and (iii) all
other Credit Documents, each in form and substance reasonably acceptable to the
Lenders in their sole discretion.

     (b) Authority Documents. Receipt by the Administrative Agent of the
following with respect to each Credit Party:

     (i) Organizational Documents. Copies of the articles or certificates of
incorporation or other organizational documents of each Credit Party certified
to be true and complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its formation and certified by a
secretary or assistant secretary of such Credit Party to be true and correct as
of the Closing Date.

     (ii) Bylaws. A copy of the bylaws or other governing documents of each
Credit Party certified by a secretary or assistant secretary of such Credit
Party to be true and correct as of the Closing Date.

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     (iii) Resolutions. Copies of resolutions of the Board of Directors or other
governing body of each Credit Party approving and adopting the Credit Documents
to which it is a party, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or assistant secretary
of such Credit Party to be true and correct and in full force and effect as of
the Closing Date.

     (iv) Good Standing. Copies of certificates of good standing, existence or
its equivalent with respect to each Credit Party certified as of a recent date
by the appropriate Governmental Authority of the state or other jurisdiction of
its formation and, without duplication, the State of Minnesota except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect.

     (v) Incumbency. An incumbency certificate of each Credit Party certified by
a secretary or assistant secretary of such Credit Party to be true and correct
as of the Closing Date.

     (c) Opinion of Counsel. Receipt by the Administrative Agent of opinions
reasonably satisfactory to the Administrative Agent, addressed to the
Administrative Agent, the Issuing Lender and the Lenders and dated as of the
Closing Date.

     (d) Financial Statements. Receipt by the Lenders of (i) the annual
consolidated financial statements (including balance sheets, income statements
and cash flow statements) of the Borrower and its Subsidiaries for the fiscal
year 2003 audited by independent public accountants of recognized national
standing, together with the “management letter” submitted by such accountants in
connection with such financial statements, (ii) the consolidated financial
statements (including balance sheets, income statements and cash flow
statements) of the Borrower and its Subsidiaries for the fiscal quarter ended
March 31, 2004 and (iii) such other financial information regarding the Borrower
and its Subsidiaries as the Administrative Agent or a Lender may request.

     (e) Consents. Receipt by the Administrative Agent of evidence that all
necessary governmental, shareholder and third party consents and approvals, if
any, have been received and no condition or Requirement of Law exists which
would reasonably be likely to restrain, prevent or impose any material adverse
conditions on the transactions contemplated hereby.

     (f) Officer’s Certificates. The Administrative Agent shall have received a
certificate or certificates executed by an Authorized Officer of the Borrower as
of the Closing Date stating that (i) the Credit Parties and each of their
Subsidiaries are in compliance with all existing material financial obligations,
(ii) no action, suit, investigation or proceeding is pending or, to the
knowledge of any Credit Party, threatened in any court or before any arbitrator
or Governmental Authority that purports to affect the Credit Parties,

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any of their Subsidiaries or any transaction contemplated by the Credit
Documents, if such action, suit, investigation or proceeding would have or would
reasonably be expected to have a Material Adverse Effect, (iii) all
governmental, shareholder and third party consents and approvals, if any, with
respect to the Credit Documents and the transactions contemplated thereby have
been obtained, (iv) the financial statements and information delivered to the
Administrative Agent on or before the Closing Date were prepared in good faith
and in accordance with GAAP and (v) immediately after giving effect to this
Credit Agreement, the other Credit Documents and all the transactions
contemplated herein or therein to occur on such date, (A) each Credit Party and
each of their Subsidiaries is Solvent, (B) no Default or Event of Default
exists, (C) all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and (D) the
Credit Parties are in compliance with each of the financial covenants set forth
in Section 7.2, including calculation thereof as of March 31, 2004.

     (g) Other Indebtedness. Receipt by the Administrative Agent of evidence
satisfactory to it that all of the Indebtedness of the Credit Parties under the
Existing Credit Agreements have been paid in full (or will be paid in full with
the proceeds of the initial Loans made herein) and all obligations of the
lenders thereunder in connection therewith have been terminated.

     (h) Fees and Expenses. Payment by the Credit Parties of all fees and
expenses owed by them to the Administrative Agent or the Lenders, including,
without limitation, as set forth in the Fee Letter.

     (i) Other. Receipt by the Lenders of such other documents, instruments,
agreements or information as reasonably and timely requested by any Lender.

     5.2 Conditions to All Extensions of Credit.

     In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall the Issuing Lender be
required to issue or extend a Letter of Credit unless:

     (a) Notice. (i) In the case of any new Loan, the Borrower shall have
delivered a Notice of Borrowing, duly executed and completed, by the time
specified in Section 2.1 and (ii) in the case of any Letter of Credit, the
Borrower shall have delivered to the Issuing Lender an appropriate request for
issuance in accordance with the provisions of Section 2.2.

     (b) Representations and Warranties. The representations and warranties made
by the Credit Parties in any Credit Document are true and correct in all
material respects at and as if made as of such date except to the extent they
expressly and exclusively relate to an earlier date.

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     (c) No Default. No Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto.

     (d) Availability. Immediately after giving effect to the making of such
Loan (and the application of the proceeds thereof) or to the issuance of such
Letter of Credit, as the case may be, the sum of the principal amount of Loans
outstanding plus LOC Obligations outstanding shall not exceed the Revolving
Committed Amount.

The delivery of each Notice of Borrowing and each request for a Letter of Credit
shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c), and (d) above.

SECTION 6

REPRESENTATIONS AND WARRANTIES

     The Credit Parties hereby represent to the Administrative Agent, the
Issuing Lender and each Lender that:

     6.1 Organization and Good Standing.

     Each Credit Party (a) is either a partnership, a corporation or a limited
liability company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) is duly qualified and in
good standing as a foreign organization and authorized to do business in every
other jurisdiction where its ownership or operation of property or the conduct
of its business would require it to be qualified, in good standing and
authorized, unless the failure to be so qualified, in good standing or
authorized would not have or would not reasonably be expected to have a Material
Adverse Effect and (c) has the power and authority to own and operate its
properties and to carry on its business as now conducted and as currently
proposed to be conducted.

     6.2 Due Authorization.

     Each Credit Party (a) has the power and authority to execute, deliver and
perform this Credit Agreement and the other Credit Documents to which it is a
party and to incur the obligations herein and therein provided for and (b) has
duly taken all necessary action to authorize, and is duly authorized, to
execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party.

     6.3 Enforceable Obligations.

     Each Credit Party has duly executed this Credit Agreement and each other
Credit Document to which such Credit Party is a party and this Credit Agreement
and such other Credit Documents

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constitute legal, valid and binding obligations of such Credit Party enforceable
against such Credit Party in accordance with their respective terms, except as
may be limited by bankruptcy or insolvency laws or similar laws affecting
creditors’ rights generally or by general equitable principles.

     6.4 No Conflicts.

     Neither the execution and delivery of the Credit Documents to which it is a
party, nor the consummation of the transactions contemplated herein and therein,
nor the performance of or compliance with the terms and provisions hereof and
thereof by a Credit Party will (a) violate, contravene or conflict with any
provision of such Credit Party’s organizational documents, (b) violate,
contravene or conflict with any Requirement of Law (including, without
limitation, Regulations T, U or X), order, writ, judgment, injunction, decree,
license or permit applicable to such Credit Party, (c) violate, contravene or
conflict with contractual provisions of, or cause an event of default under, any
indenture, loan agreement, mortgage, deed of trust, contract or other agreement
or instrument to which such Credit Party is a party or by which it or its
properties may be bound, or (d) result in or require the creation of any Lien
upon or with respect to the properties of such Credit Party.

     6.5 Consents.

     Except for consents, approvals and authorizations which have been obtained,
no consent, approval, authorization or order of, or filing, registration or
qualification with, any Governmental Authority, equity owner or third party in
respect of any Credit Party is required in connection with the execution,
delivery or performance of this Credit Agreement or any of the other Credit
Documents, or the consummation of any transaction contemplated herein or therein
by such Credit Party.

     6.6 Financial Condition.

     The financial statements delivered to the Administrative Agent and the
Lenders pursuant to Section 5.1(d) and Sections 7.1(a) and (b): (a) have been
prepared in accordance with GAAP and (b) present fairly the consolidated
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries as of such date and for such periods. Since December 31, 2003,
there has been no sale, transfer or other disposition by the Borrower or any of
its Subsidiaries of any material part of the business or property of the
Borrower and its Subsidiaries, taken as a whole, or purchase or other
acquisition by any such Person of any business or property (including any
Capital Stock of any other Person) material in relation to the consolidated
financial condition of the Borrower and its Subsidiaries, taken as a whole, in
each case, which, is not (i) reflected in the most recent financial statements
delivered to the Lenders pursuant to Section 5.1(d) and Section 7.1 or in the
notes thereto or (ii) otherwise permitted by the terms of this Credit Agreement
and communicated to the Administrative Agent and the Lenders.

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     6.7 No Material Change.

     Since December 31, 2003, there has been no development or event relating to
or affecting any Credit Party or any of its Subsidiaries which has had or would
reasonably be expected to have a Material Adverse Effect.

     6.8 Disclosure.

     Neither this Credit Agreement, nor any other Credit Document, nor any
financial statements delivered to the Administrative Agent or the Lenders nor
any other document, certificate or statement furnished to the Administrative
Agent, the Issuing Lender or the Lenders by or on behalf of any Credit Party in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein or herein not misleading.

     6.9 No Default.

     No Credit Party nor any of its Subsidiaries is in default under any
contract, lease, loan agreement, indenture, mortgage, security agreement or
other agreement or obligation to which it is a party or by which any of its
properties is bound, which default has had or would reasonably be expected to
have a Material Adverse Effect.

     6.10 Litigation.

     There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, any Credit Party or any of its Subsidiaries or with respect
to its properties or revenues which (a) purport to affect or pertain to this
Credit Agreement or the other Credit Documents or the transactions contemplated
herein and therein or (b) would have or would reasonably be expected to have a
Material Adverse Effect.

     6.11 Taxes.

     Each Credit Party and each of its Subsidiaries has filed, or caused to be
filed, all material tax returns (federal, state, local and foreign) required to
be filed and has paid (a) all amounts of taxes shown thereon to be due
(including interest and penalties) and (b) all other material taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) which are not yet delinquent or (ii) that are being contested in good
faith and by proper proceedings, and against which adequate reserves are being
maintained in accordance with GAAP. No Credit Party is aware of any proposed
material tax assessments against any Credit Party or any of its Subsidiaries.

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     6.12 Compliance with Law.

     Each Credit Party and each of its Subsidiaries is in compliance with all
material Requirements of Law (including, without limitation, Environmental Laws
and ERISA) and all material orders, writs, injunctions and decrees applicable to
it, or to its properties.

     6.13 Licenses, etc.

     Each Credit Party and each of its Subsidiaries has obtained, and holds in
full force and effect, all franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way,
intellectual property rights and other rights, consents and approvals which are
necessary for the operation of its business as presently conducted, except for
such exceptions as would not have or would not reasonably be expected to have a
Material Adverse Effect.

     6.14 Title to Properties.

     Each Credit Party, and each of its Subsidiaries, is the owner of, and has
good and marketable title to, or has a valid license or lease to use, all of its
properties and assets (except for minor defects in title, licenses or leases
that do not materially interfere with its ability to conduct its business or to
utilize its properties or assets for their intended purposes) and none of such
properties or assets is subject to any Liens other than Permitted Liens.

     6.15 Insurance.

     The properties of each Credit Party and each of its Subsidiaries are
insured with financially sound and reputable insurance companies that are not
Affiliates of the Borrower, in such amounts, with such deductibles and covering
such risks, as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Credit Parties
or their Subsidiaries operate.

     6.16 Use of Proceeds.

     The proceeds of the Loans will be used solely for the purposes specified in
Section 7.10. No proceeds of the Loans will be used for the Acquisition of
another Person unless such Acquisition is a Permitted Acquisition.

     6.17 Government Regulation.

     (a) The Borrower is not engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U), or extending credit for the purpose
of purchasing or carrying margin stock. Following the application of the
proceeds of each Loan or drawing under

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each Letter of Credit, not more than 25% of the value of the assets (either of
Borrower only or of Borrower and its Subsidiaries on a consolidated basis) will
be margin stock.

     (b) No Credit Party (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.

     6.18 No Burdensome Restrictions.

     No Credit Party nor any of its Subsidiaries is a party to any agreement or
instrument or subject to any other obligation or any charter or corporate
restriction or any provision of any applicable law, rule or regulation which,
individually or in the aggregate, would have or would reasonably be expected to
have a Material Adverse Effect.

     6.19 ERISA.

     Except as would not result in or would not reasonably be expected to result
in a Material Adverse Effect:

     (a) (i) No ERISA Event has occurred, and, to the best knowledge of the
Credit Parties, each of their Subsidiaries and each ERISA Affiliate, no event or
condition has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no “accumulated
funding deficiency,” as such term is defined in Section 302 of ERISA and
Section 412 of the Code, whether or not waived, has occurred with respect to any
Plan 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; (iii) each Plan has been maintained, operated, and funded in compliance
with its own terms and in material compliance with the provisions of ERISA, the
Code, and any other applicable federal or state laws; (iv) 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 Credit Parties, each of their Subsidiaries and each ERISA
Affiliate, nothing has occurred which would prevent, or cause the loss of, such
qualification; and (v) no Lien in favor or the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.

     (b) The actuarial present value of all “benefit liabilities” (as defined in
Section 4001(a)(16) of ERISA), whether or not vested, under each Single Employer
Plan, as of the last annual valuation date prior to the date on which this
representation is made or deemed made (determined, in each case, in accordance
with Financial Accounting Standards Board Statement 87, utilizing the actuarial

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assumptions used in such Plan’s most recent actuarial valuation report), did not
exceed as of such valuation date the fair market value of the assets of such
Plan allocated to such accrued liabilities.

     (c) No Credit Party nor any Subsidiary of a Credit Party nor any ERISA
Affiliate has incurred, or, to the best of each such party’s knowledge, is
reasonably expected to incur, any liability under Title IV of ERISA with respect
to any Single Employer Plan, or any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. No Credit Party nor any Subsidiary
of a Credit Party nor any ERISA Affiliate would become subject to any withdrawal
liability under ERISA if any such party were to withdraw completely from all
Multiemployer Plans and Multiple Employer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made.
No Credit Party nor any Subsidiary of a Credit Party nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning of Title
IV of ERISA), and no Multiemployer Plan is, to the best of each such Person’s
knowledge, reasonably expected to be in reorganization, insolvent, or
terminated. No Credit Party nor any Subsidiary of a Credit Party nor any ERISA
Affiliate has engaged in a transaction that could be subject to Sections 4069 or
4212(c) of ERISA.

     (d) No prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) or breach of fiduciary responsibility has occurred
with respect to a Plan which has subjected or may subject a Credit Party, any
Subsidiary of a Credit Party or any ERISA Affiliate to any liability under
Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or
under any agreement or other instrument pursuant to which a Credit Party, any
Subsidiary of a Credit Party or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability. There are no pending or, to the
best knowledge of the Credit Parties, each of their Subsidiaries and each ERISA
Affiliate, 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.

     (e) No Credit Party nor any Subsidiary of a Credit Party nor any ERISA
Affiliate has any material liability with respect to “expected post-retirement
benefit obligations” within the meaning of the Financial Accounting Standards
Board Statement 106. Each Plan that is a welfare plan (as defined in
Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section 4980B of
the Code apply has been administered in compliance in all material respects with
such sections.

     6.20 Environmental Matters.

     (a) Except as would not result in or would not reasonably be expected to
result in a Material Adverse Effect:

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     (i) Each of the real properties owned, leased or operated by a Credit Party
or any of its Subsidiaries (the “Real Properties”) and all operations at the
Real Properties are in compliance with all applicable Environmental Laws, and
there is no violation of any Environmental Law with respect to the Real
Properties or the businesses operated by the Credit Parties or any of their
Subsidiaries (the “Businesses”), and there are no conditions relating to the
Businesses or Real Properties that would reasonably be expected to give rise to
liability under any applicable Environmental Laws.

     (ii) No Credit Party nor any of its Subsidiaries has received any written
notice of, or inquiry from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential liability regarding
Hazardous Materials or compliance with Environmental Laws with regard to any of
the Real Properties or the Businesses, nor, to the knowledge of a Credit Party
or any of its Subsidiaries, is any such notice being threatened.

     (iii) Hazardous Materials have not been transported or disposed of from the
Real Properties, or generated, treated, stored or disposed of at, on or under
any of the Real Properties or any other location, in each case by, or on behalf
or with the permission of, a Credit Party or any of its Subsidiaries in a manner
that would give rise to liability under any applicable Environmental Laws.

     (iv) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of a Credit Party or any of its Subsidiaries,
threatened, under any Environmental Law to which a Credit Party or any of its
Subsidiaries is or will be named as a party, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to a Credit Party or any of its Subsidiaries, the
Real Properties or the Businesses.

     (v) There has been no release (including, without limitation, disposal) or
threat of release of Hazardous Materials at or from the Real Properties, or
arising from or related to the operations of a Credit Party or any of its
Subsidiaries in connection with the Real Properties or otherwise in connection
with the Businesses where such release constituted a violation of, or would give
rise to liability under, any applicable Environmental Laws.

     (vi) None of the Real Properties contains, or has previously contained, any
Hazardous Materials at, on or under the Real Properties in amounts or
concentrations that, if released, constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.

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     (vii) No Credit Party, nor any of its Subsidiaries, has assumed any
liability of any Person (other than another Credit Party, or one of its
Subsidiaries) under any Environmental Law.

     (b) The Credit Parties and its Subsidiaries have adopted procedures that
are designed to (i) ensure that such Credit Party or Subsidiary, any of its
operations and each of the Real Properties complies with applicable
Environmental Laws and (ii) minimize any liabilities or potential liabilities
that each Credit Party or Subsidiary, any of its operations and each of the Real
Properties may have under applicable Environmental Laws.

     6.21 Intellectual Property.

     Each Credit Party and each of its Subsidiaries owns, or has the legal right
to use, all patents, trademarks, tradenames, copyrights, technology, know-how
and processes (the “Intellectual Property”) necessary for each of them to
conduct its business as currently conducted, except where failure to own or have
such legal right to use would not have or would not reasonably be expected to
have a Material Adverse Effect. No claim has been asserted and is pending by any
Person challenging or questioning the use of any Intellectual Property owned by
any Credit Party or any of its Subsidiaries or that any Credit Party or any of
its Subsidiaries has a right to use or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party or any of its Subsidiaries have
knowledge of any such claim, and, to the knowledge of the Credit Parties and
their Subsidiaries, the use of any Intellectual Property by the Credit Parties
and their Subsidiaries does not infringe on the rights of any Person, except for
such claims and infringements that in the aggregate, would not have or would not
reasonably be expected to have a Material Adverse Effect.

     6.22 Subsidiaries.

     Set forth on Schedule 6.22 is a complete and accurate list of all
Subsidiaries of each Credit Party. Schedule 6.22 may be updated from time to
time by the Borrower by giving written notice thereof to the Administrative
Agent.

     6.23 Solvency.

     Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.

     6.24 Indebtedness.

     The Credit Parties and their Subsidiaries have no Indebtedness other than
Indebtedness permitted by Section 8.1.

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     6.25 Investments; Liens.

     All Investments of each Credit Party and its Subsidiaries are Permitted
Investments. All Liens on the property or assets of the Credit Parties and their
Subsidiaries are Permitted Liens.

     6.26 Force Majeure.

     Since the date of the financial statements delivered in accordance with
Section 5.1(d) or, if later, the date of the most recent financial statements
delivered in accordance with Section 7.1(a) or Section 7.1(b), no event or
condition has occurred that results from fire or other casualty, strike, lockout
or other labor disruption, embargo, sabotage, confiscation, condemnation, riot,
civil disturbance, activity of armed forces or act of God that has had or would
reasonably be expected to have a Material Adverse Effect.

SECTION 7

AFFIRMATIVE COVENANTS

     Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans and LOC Obligations, together with
interest and fees and other obligations then due and payable hereunder, have
been paid in full and the Commitments and Letters of Credit hereunder shall have
terminated:

     7.1 Information Covenants.

     The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent (for further distribution to the Lenders):

     (a) Annual Financial Statements. As soon as available, and in any event
within 90 days after the close of each fiscal year of the Borrower, a
consolidated balance sheet and income statement of the Borrower and its
Subsidiaries, as of the end of such fiscal year, together with related
consolidated statements of operations, retained earnings, changes in
shareholders’ equity and cash flows for such fiscal year, setting forth in
comparative form consolidated figures for the preceding fiscal year, all such
consolidated financial information described above to be in reasonable form and
detail and audited by independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent and whose
opinion shall be to the effect that such financial statements have been prepared
in accordance with GAAP and shall not be limited as to the scope of the audit or
qualified in any manner.

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     (b) Quarterly Financial Statements. As soon as available, and in any event
within 45 days after the close of each of the first three fiscal quarters of the
Borrower, an unaudited consolidated balance sheet and income statement of the
Borrower and its Subsidiaries, as of the end of such fiscal quarter, together
with related consolidated statements of operations and consolidated statements
of retained earnings and of cash flows for such fiscal quarter in each case
setting forth in comparative form consolidated figures for the corresponding
period of the preceding fiscal year, all such financial information described
above to be in reasonable form and detail and reasonably acceptable to the
Administrative Agent, and accompanied by a certificate of an Authorized Officer
of the Borrower to the effect that such quarterly financial statements fairly
present in all material respects the consolidated financial condition of the
Borrower and its Subsidiaries and have been prepared in accordance with GAAP,
subject to changes resulting from audit and normal year-end audit adjustments.

     (c) Officer’s Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate of an
Authorized Officer of the Borrower substantially in the form of Exhibit 7.1(c),
(i) demonstrating compliance with the financial covenants contained in
Section 7.2 by calculation thereof as of the end of each such fiscal period,
(ii) demonstrating compliance with any other terms of this Credit Agreement as
reasonably requested by the Administrative Agent, (iii) stating that no Default
or Event of Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Borrower proposes
to take with respect thereto and (iv) calculating the Adjusted Leverage Ratio as
of the end of such fiscal period.

     (d) Annual Business Plan and Budgets. Within 90 days after the end of each
fiscal year of the Borrower, an annual business plan and budget (including
budgeted Capital Expenditures) of the Borrower and its Subsidiaries on a
consolidated basis containing, among other things, pro forma financial
projections for the next fiscal year (including income statements, balance
sheets and cash flow statements).

     (e) Reports. Promptly upon transmission or receipt thereof, (a) copies of
any filings and registrations with, and reports to or from, the Securities and
Exchange Commission, or any successor agency, and copies of all financial
statements, proxy statements, notices and reports as a Credit Party or any of
its Subsidiaries shall send to its shareholders generally and (b) upon the
written request of the Administrative Agent, all reports and written information
to and from the United States Environmental Protection Agency, or any state or
local agency responsible for environmental matters, the United States
Occupational Safety and Health Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters.

     (f) Accountant’s Certificate. Within the period for delivery of the annual
financial statements provided in Section 7.1(a), a certificate of the
accountants conducting

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the annual audit stating that they have reviewed this Credit Agreement and
stating further whether, in the course of their audit, they have become aware
that the Borrower is not in compliance with any of the affirmative or negative
covenants set forth in Section 7 or Section 8 of this Credit Agreement, insofar
as such covenants relate to accounting matters or are calculated based upon
audited financial information.

     (g) Auditor’s Reports. Promptly upon receipt thereof, a copy of any other
report or “management letter” submitted or presented by independent accountants
to any Credit Party or any of its Subsidiaries in connection with any annual,
interim or special audit of the books of such Person.

     (h) Notices. Upon a Credit Party obtaining knowledge thereof, the Borrower
will give written notice to the Administrative Agent promptly (and in any event
within two Business Days) of (a) the occurrence of an event or condition
consisting of a Default or Event of Default, specifying the nature and existence
thereof and what action the Borrower proposes to take with respect thereto,
(b) the occurrence of any of the following with respect to any Credit Party or
any of its Subsidiaries (i) the pendency or commencement of any litigation,
arbitration or governmental proceeding against a Credit Party or any of its
Subsidiaries which, if adversely determined, would have or would reasonably be
expected to have a Material Adverse Effect, (ii) material non-compliance with,
or the institution of any proceedings against a Credit Party or any of its
Subsidiaries with respect to, or the receipt of written notice by such Person of
potential liability or responsibility for violation, or alleged violation of,
any Requirement of Law (including, without limitation, Environmental Laws) the
violation of which would have or would reasonably be expected to have a Material
Adverse Effect and (iii) non-compliance with any contractual obligation of a
Credit Party or any of its Subsidiaries which would have or would reasonably be
expected to have a Material Adverse Effect and (c) any change to the financial
information used to calculate the Adjusted Leverage Ratio for the most recently
occurring Calculation Date that would have the effect of changing the existing
Pricing Level pursuant to the definition of “Applicable Percentage” set forth in
Section 1.1.

     (i) ERISA. Upon a Credit Party, any Subsidiary of a Credit Party or any
ERISA Affiliate obtaining knowledge thereof, such Person shall give written
notice to the Administrative Agent and each of the Lenders promptly (and in any
event within two Business Days) of: (i) any event or condition, including, but
not limited to, any Reportable Event, that constitutes, or might reasonably lead
to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt of
notice as prescribed in ERISA or otherwise of any withdrawal liability assessed
against a Credit Party, any Subsidiary of a Credit Party or any ERISA Affiliate,
or of a determination that any Multiemployer Plan is in reorganization or
insolvent (both within the meaning of Title IV of ERISA); (iii) the failure to
make full payment on or before the due date (including extensions) thereof of
all amounts which a Credit Party, any Subsidiary of a Credit Party or any ERISA
Affiliate is required to contribute to each Plan pursuant to its terms and as
required to meet the minimum funding

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standard set forth in ERISA and the Code with respect thereto; or (iv) any
change in the funding status of any Plan that could have a Material Adverse
Effect; in each case together with a description of any such event or condition
or a copy of any such notice and a statement by an Authorized Officer of the
Borrower briefly setting forth the details regarding such event, condition, or
notice, and the action, if any, which has been or is being taken or is proposed
to be taken by such Person with respect thereto. Promptly upon request, the
Credit Parties shall furnish the Administrative Agent and the Lenders with such
additional information concerning any Plan as may be reasonably requested,
including, but not limited to, copies of each annual report/return (Form 5500
series), as well as all schedules and attachments thereto required to be filed
with the Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each “plan year” (within the meaning of
Section 3(39) of ERISA).

     (j) Environmental. During the existence of an Event of Default, and upon
the written request of the Administrative Agent, the Credit Parties will furnish
or cause to be furnished to the Administrative Agent, at the Credit Parties’
expense, a report of an environmental assessment of reasonable scope, form and
depth, including, where appropriate, invasive soil or groundwater sampling, by a
consultant reasonably acceptable to the Administrative Agent regarding any
release or threat of release of Hazardous Materials on any property owned,
leased or operated by a Credit Party and the compliance by the Credit Parties
with Environmental Laws. If the Credit Parties fail to deliver such an
environmental report within seventy-five (75) days after receipt of such written
request, then the Administrative Agent may arrange for same, and the Credit
Parties hereby grant to the Administrative Agent and its representatives access
to the Real Properties and a license of a scope reasonably necessary to
undertake such an assessment (including, where appropriate, invasive soil or
groundwater sampling). The reasonable cost of any assessment arranged for by the
Administrative Agent pursuant to this provision will be payable by the Credit
Parties on demand.

     (k) Other Information. With reasonable promptness upon any such request,
such other information regarding the business, properties or financial condition
of the Credit Parties and their Subsidiaries as the Administrative Agent or any
Lender may reasonably request.

     7.2 Financial Covenants.

     (a) Tangible Net Worth. Tangible Net Worth shall at all times be greater
than or equal to the sum of (i) $219,000,000 plus (ii) 25% of Net Income
(without deduction for losses) earned for each fiscal quarter of the Borrower
(beginning with the quarter ending September 30, 2004) including the most recent
fiscal quarter ending prior to the date of determination plus (iii) 50% of the
amount of Net Cash Proceeds from any Equity Issuance occurring from the
Effective Date to the last day of the most recent fiscal quarter ending prior to
the date of determination.

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     (b) Leverage Ratio. The Leverage Ratio, as of the last day of each fiscal
quarter of the Borrower, shall be less than or equal to 2.25 to 1.0.

     (c) Interest Coverage Ratio. The Interest Coverage Ratio, as of the last
day of each fiscal quarter of the Borrower, shall be greater than or equal to
4.0 to 1.0.

     7.3 Preservation of Existence and Franchises.

     Each of the Credit Parties will, and will cause its Subsidiaries to, do all
things necessary to preserve and keep in full force and effect its existence and
all material rights, franchises, intellectual property and authority except as
permitted by Section 8.5.

     7.4 Books and Records.

     Each of the Credit Parties will, and will cause its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
GAAP (including the establishment and maintenance of appropriate reserves).

     7.5 Compliance with Law.

     Each of the Credit Parties will, and will cause its Subsidiaries to, comply
with all material Requirements of Law, and all material restrictions imposed by
all Governmental Authorities, applicable to it and its property (including,
without limitation, Environmental Laws and ERISA).

     7.6 Payment of Taxes and Other Indebtedness.

     Each of the Credit Parties will, and will cause its Subsidiaries to, pay,
settle or discharge (a) all material taxes, assessments and governmental charges
or levies imposed upon it, or upon its income or profits, or upon any of its
properties, before they shall become delinquent, (b) all lawful claims
(including claims for labor, materials and supplies) which, if unpaid, might
give rise to a Lien upon any of its properties, and (c) all of its other
Indebtedness as it shall become due (to the extent such repayment is not
otherwise prohibited by this Credit Agreement); provided, however, that a Credit
Party shall not be required to pay any such tax, assessment, charge, levy, claim
or Indebtedness which is being contested in good faith by appropriate
proceedings and as to which adequate reserves therefor have been established in
accordance with GAAP, unless the failure to make any such payment (i) would give
rise to an immediate right to foreclose or collect on a Lien securing such
amounts or (ii) would have or would reasonably be expected to have a Material
Adverse Effect.

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     7.7 Insurance.

     Each of the Credit Parties will, and will cause each of its Subsidiaries
to, at all times maintain in full force and effect insurance (including
liability, casualty and business interruption insurance) with reputable national
companies that are not Affiliates of the Borrower, in such amounts, covering
such risks and liabilities and with such deductibles and self-insurance
retentions as are in accordance with normal industry practice; provided that the
Borrower may maintain a program of self-insurance with respect to products
liability and worker’s compensation liability.

     7.8 Maintenance of Property.

     Each of the Credit Parties will, and will cause its Subsidiaries to,
maintain and preserve its properties and equipment in good repair, working order
and condition, normal wear and tear and damages from casualty excepted, and will
make, or cause to be made, in such properties and equipment from time to time
all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.

     7.9 Performance of Obligations.

     Each of the Credit Parties will, and will cause its Subsidiaries to,
perform in all material respects all of its obligations under the terms of all
material contracts, agreements, indentures, mortgages, security agreements or
other debt instruments to which it is a party or by which it or its properties
may be bound.

     7.10 Use of Proceeds.

     The Credit Parties will use the proceeds of the Loans solely (a) to repay
Indebtedness of the Borrower identified in Section 5.1(g), (b) to provide
working capital for the Borrower and (c) for general corporate purposes of the
Borrower. The Borrower will use the Letters of Credit solely for the purposes
set forth in Section 2.2(a).

     7.11 Audits/Inspections.

     Upon reasonable notice and during normal business hours, at the Credit
Parties’ expense, each Credit Party will, and will cause each of its
Subsidiaries to, permit representatives appointed by the Administrative Agent or
any Lender, including, without limitation, independent accountants, agents,
attorneys and appraisers to visit and inspect such Credit Party’s or
Subsidiary’s property, including its books and records, its accounts receivable
and inventory, its facilities and its other business assets, and to make
photocopies or photographs thereof and to write down and record any information
such representative obtains and shall permit the Administrative Agent, any
Lender or its representatives to investigate and verify the accuracy of
information provided to the Administrative Agent or the Lenders and to discuss
all such matters with the officers, employees

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and representatives of the Credit Parties and/or their Subsidiaries; provided
however that, unless an Event of Default shall exist and be continuing, the
Administrative Agent and the Lenders shall not, in the aggregate, exercise their
rights under this Section 7.11 more than two times during any calendar year and
only one such time shall be at the Credit Parties’ expense. Notwithstanding the
foregoing, no information protected by an attorney-client privilege shall be
required to be disclosed pursuant to this Section 7.11; provided however that in
the event any Credit Party claims that any materials requested for review,
investigation or discussion by the Administrative Agent or any Lender, or any of
its representatives pursuant to this Section 7.11 is protected by an
attorney-client privilege, then such Credit party shall (a) provide the
Administrative Agent or such Lender with a reasonably acceptable basis for the
assertion of the privilege, (b) remove or redact only those portions of the
materials deemed to be privileged and (c) reasonably cooperate with the
Administrative Agent or such Lender to determine a method by which the
information which the Administrative Agent or such Lender reasonably deemed
necessary to review, investigate or discuss may be obtained by the
Administrative Agent in an alternative method which will not jeopardize any
attorney-client privilege.

     7.12 Additional Credit Parties.

     At the time any Person becomes a Domestic Subsidiary, the Borrower shall so
notify the Administrative Agent and promptly thereafter (but in any event within
30 days) shall cause such Person to (a) execute a Joinder Agreement in
substantially the same form as Exhibit 7.12, (b) deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, certified resolutions and
other organizational and authorizing documents of such Person 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 above), all in form, content and scope reasonably satisfactory to
the Administrative Agent and (c) update such schedules to the Credit Agreement
as appropriate to reflect the joinder of such new Domestic Subsidiary.

SECTION 8

NEGATIVE COVENANTS

     Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans and LOC Obligations, together with
interest, fees and other obligations then due and payable hereunder, have been
paid in full and the Commitments and Letters of Credit hereunder shall have
terminated:

     8.1 Indebtedness.

     Subject to Section 8.2, no Credit Party will, nor will it permit any of its
Subsidiaries to, contract, create, incur, assume or permit to exist any
Indebtedness, other than:

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     (a) Indebtedness arising under this Credit Agreement and the other Credit
Documents;

     (b) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business and to the extent not
current, accounts payable and accrued expenses that are subject to bona fide
dispute and against which adequate reserves have been established in accordance
with GAAP;

     (c) Indebtedness owing by a Credit Party to another Credit Party;

     (d) purchase money Indebtedness (including Capital Leases) to finance the
purchase of fixed assets (including equipment); provided that (i) the sum of
(A) the total amount of all such Indebtedness outstanding for the Credit Parties
and their Subsidiaries plus (B) the aggregate amount of Synthetic Leases
outstanding pursuant to clause (e) below shall not exceed an aggregate principal
amount of $30,000,000 at any one time outstanding; (ii) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed; and
(iii) no such Indebtedness shall be refinanced for a principal amount in excess
of the principal balance outstanding thereon at the time of such refinancing;

     (e) Indebtedness comprised of Synthetic Leases; provided that the sum of
(i) the total amount of all such Indebtedness for the Credit Parties and their
Subsidiaries outstanding plus (ii) the aggregate amount of purchase money
Indebtedness outstanding pursuant to clause (d) above shall not exceed an
aggregate principal amount of $30,000,000 at any one time outstanding.

     (f) Indebtedness owing by a Foreign Subsidiary to another Foreign
Subsidiary or to a Credit Party;

     (g) Indebtedness of the Foreign Subsidiaries in addition to clause
(f) above in an amount not to exceed $25,000,000 in the aggregate at any one
time outstanding;

     (h) reimbursement obligations with respect to draws under letters of credit
issued to (i) provide for, or to ensure, the payment of the purchase prices of
goods acquired by a Credit Party or any of its Subsidiaries or (ii) support
obligations of a Credit Party or any of its Subsidiaries provided that such
reimbursement obligations are paid in full on the dates the financial
institutions that issued such letters of credit pay the draws;

     (i) Guaranty Obligations permitted by Section 8.2;

     (j) Indebtedness evidenced by Hedging Agreements entered into in the
ordinary course of business and not for speculative purposes;

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     (k) Indebtedness set forth on Schedule 8.1(k); and

     (l) other unsecured Funded Debt of a Credit Party; provided that the
principal amount of such unsecured Funded Debt, if deemed included in the
calculation of the Leverage Ratio as of the last day of the most recently ended
fiscal quarter, would not cause the Leverage Ratio to exceed 2.25 to 1.0 on such
date.

     8.2 Guaranty Obligations.

     Notwithstanding anything in Section 8.1 to the contrary, no Credit Party
will, nor will it permit its Subsidiaries to contract, create, incur, assume or
permit to exist any Guaranty Obligation other than:

     (a) the obligation of such Person to purchase the property of another
Person from a creditor of such other Person who has repossessed such property as
a result of a default by such other Person under a dealer floor-plan financing
arrangement with such creditor, pursuant to those repurchase agreements existing
on the Closing Date as set forth on Schedule 8.2(a);

     (b) Guaranty Obligations of any Subsidiary of the Borrower with respect to
any Hedging Agreement entered into by the Borrower with a Lender or an Affiliate
of a Lender;

     (c) Guaranty Obligations of any Subsidiary of the Borrower with respect to
any letter of credit that is issued by a Lender or an Affiliate of a Lender for
the account of the Borrower;

     (d) the liability, or potential liability, of (i) PAI as a general partner
of Acceptance Partnership and (ii) the Borrower and PAI consisting of
obligations to make capital contributions, in an amount not to exceed the sum of
(A) the existing obligations set forth on Schedule 8.2(d) plus (B) an additional
$30,000,000 incurred during the term of this Credit Agreement; and

     (e) obligations under the Revolving Program Agreement; provided that the
Polaris Participation Fee Shortfall Obligations shall not exceed $60,000,000, in
the aggregate, at any one time; and

     (f) other Guaranty Obligations of the Credit Parties in an aggregate amount
not to exceed $15,000,000.

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     8.3 Liens.

     No Credit Party will, nor will it permit its Subsidiaries to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, other than Permitted Liens.

     8.4 Nature of Business.

     No Credit Party will, nor will it permit its Subsidiaries to, alter the
character of its business from that conducted as of the Closing Date or engage
in any business other than the business conducted as of the Effective Date and
activities which are substantially similar or related thereto.

     8.5 Consolidation and Merger.

     No Credit Party will, nor will it permit any Subsidiary to, enter into any
transaction of merger or consolidation or liquidate, wind up or dissolve itself,
or suffer any such liquidation, wind-up or dissolution; provided that a Credit
Party or a Subsidiary of a Credit Party may merge or consolidate with or into
another Person if the following conditions are satisfied:

     (a) the Administrative Agent is given prior written notice of such action;

     (b) if the merger or consolidation involves a Credit Party, the surviving
entity of such merger or consolidation shall either (i) be such Credit Party or
(ii) be a Subsidiary of the Borrower and expressly assumes in writing all of the
obligations of such Credit Party under the Credit Documents; provided that if
the transaction is between the Borrower and another Person, the Borrower must be
the surviving entity;

     (c) the Credit Parties execute and deliver such documents, instruments and
certificates as the Administrative Agent may request;

     (d) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and

     (e) the Borrower delivers to the Administrative Agent an officer’s
certificate and an opinion of counsel stating that such consolidation or merger,
and any written agreement entered into in connection therewith, comply with this
Section 8.5.

     8.6 Sale or Lease of Assets.

     No Credit Party will, nor will it permit its Subsidiaries to, convey, sell,
lease, transfer or otherwise voluntarily dispose of, in one transaction or a
series of transactions, all or any part of its business or assets whether now
owned or hereafter acquired, including, without limitation,

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inventory, receivables, equipment, real property interests (whether owned or
leasehold) and securities, other than a sale, lease, transfer or other disposal
(a) by a Credit Party of any or all of its assets to another Credit Party;
(b) of inventory in the ordinary course of business; (c) of obsolete,
slow-moving, idle or worn-out assets no longer used or useful in the business of
such Credit Party or the trade-in of equipment for equipment in better condition
or of better quality; (d) which constitutes a Permitted Investment in the
ordinary course of business; (e) by PAI of its partnership interest in
Acceptance Partnership if required by Section 3.4 of the Acceptance Partnership
Agreement (without regard to any amendment of such section); (f) of accounts
receivable pursuant to the financing contracts set forth on Schedule 8.6 or any
replacement arrangement with the same economic effect; and (g) of assets of the
Credit Parties and their Subsidiaries after the Closing Date, in addition to
those permitted above in this Section 8.6; provided that (i) the transfer is for
fair market value, (ii) no Default or Event of Default exists either prior to or
after giving effect thereto and (iii) after giving effect thereto, the aggregate
amount of all such transfers during the term of this Credit Agreement,
calculated on a net book value basis, does not exceed ten percent (10%) of Total
Assets, as determined on the last day of the most recently ended fiscal year of
the Borrower.

     8.7 Sale Leasebacks.

     No Credit Party will, nor will it permit its Subsidiaries to, directly or
indirectly become or remain liable as lessee or as guarantor or other surety
with respect to any lease of any property (whether real or personal or mixed),
whether now owned or hereafter acquired, (a) which such Credit Party or its
Subsidiary has sold or transferred or is to sell or transfer to any other Person
other than a Credit Party or (b) which such Credit Party or its Subsidiary
intends to use for substantially the same purpose as any other property which
has been sold or is to be sold or transferred by such Credit Party to any Person
in connection with such lease, other than such transactions permitted by the
Required Lenders.

     8.8 Investments.

     No Credit Party will, nor will it permit its Subsidiaries to, make or
permit to exist any Investments except for Permitted Investments.

     8.9 Foreign Subsidiaries.

     No Credit Party will, nor will it permit its Subsidiaries to, permit the
aggregate amount of assets owned by the Foreign Subsidiaries, at any one time,
to constitute more than twenty percent (20%) of Total Assets.

     8.10 Transactions with Affiliates.

     No Credit Party will, nor will it permit its Subsidiaries to, enter into
any transaction or series of transactions, whether or not in the ordinary course
of business, with any officer, director,

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shareholder, Subsidiary or Affiliate other than the normal compensation,
indemnification and reimbursement of expenses of officers, employees and
directors and transactions on terms and conditions substantially as favorable as
would be obtainable in a comparable arm’s-length transaction with a Person other
than an officer, director, shareholder, Subsidiary or Affiliate.

     8.11 Fiscal Year; Accounting; Organizational Documents.

     No Credit Party will, nor will it permit its Subsidiaries to, (a) change
its fiscal year, (b) change its accounting procedures, except as a result of
changes in GAAP and in accordance with Section 1.3 or (c) in any manner that
would reasonably be likely to adversely affect the rights of the Lenders, change
its organizational or governing documents.

     8.12 No Limitations.

     No Credit Party will, nor will it permit its Subsidiaries to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Person to (a) pay dividends or make any other distribution
on any of such Person’s Capital Stock, (b) pay any Indebtedness owed to any
other Credit Party, (c) make loans or advances to any other Credit Party or
(d) transfer any of its property to any other Credit Party, except for
encumbrances or restrictions existing under or by reason of (i) customary
non-assignment provisions in any lease governing a leasehold interest and (ii)
this Credit Agreement and the other Credit Documents.

     8.13 No Other Negative Pledges.

     No Credit Party will, nor will it permit its Subsidiaries to, enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation except as set forth in
the Credit Documents.

     8.14 PAI Assets.

     No Credit Party will, nor will it permit any Subsidiary to, allow PAI to
own any assets other than equity interests in Acceptance Partnership and
dividends or other distributions derived therefrom; provided that PAI shall
transfer any such dividends or distributions to Polaris Industries Inc. or the
Borrower within 15 Business Days of receipt.

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SECTION 9

EVENTS OF DEFAULT

     9.1 Events of Default.

     An Event of Default shall exist upon the occurrence, and during the
continuation, of any of the following specified events (each an “Event of
Default”):

     (a) Payment. Any Credit Party shall default in the payment (i) when due of
any principal of any of the Loans or any reimbursement obligation arising from
drawings under Letters of Credit or (ii) within three Business Days of when due
of any interest on the Loans or any fees or other amounts owing hereunder, under
any of the other Credit Documents or in connection herewith.

     (b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material respect
on the date as of which it was made or deemed to have been made.

     (c) Covenants. Any Credit Party shall:

     (i) default in the due performance or observance of any term, covenant or
agreement contained in Sections 7.2, 7.3, 7.5, 7.10, 7.11 or 7.12 or Section 8
inclusive;

     (ii) default in the due performance or observance by it of any term,
covenant or agreement contained in Section 7.1 and such default shall continue
unremedied for a period of five Business Days; or

     (iii) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in subsections (a), (b) or
(c)(i) or (ii) of this Section 9.1) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least 30 days after the
earlier of the President, Chief Executive Officer, Chief Financial Officer or
Treasurer of the Borrower becoming aware of such default or notice thereof given
by the Administrative Agent.

     (d) Other Credit Documents. (i) Any Credit Party shall default in the due
performance or observance of any term, covenant or agreement in any of the other
Credit Documents and such default shall continue unremedied for a period of at
least 30 days after the earlier of an officer of a Credit Party becoming aware
of such default or notice thereof

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given by the Administrative Agent, (ii) any Credit Document shall fail to be in
full force and effect or any Credit Party shall so assert or (iii) any Credit
Document shall fail to give the Administrative Agent and/or the Lenders the
liens, rights, powers and privileges purported to be created by such Credit
Document.

     (e) Guaranties. The Guaranty given by the Credit Parties hereunder or by
any Additional Credit Party or any provision thereof shall cease to be in full
force and effect, or any Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor’s obligations under such
guaranty or such Guarantor shall default in the due payment or performance of
such Guaranty.

     (f) Bankruptcy, etc. The occurrence of any of the following with respect to
a Credit Party or any of its Subsidiaries (i) a court or governmental agency
having jurisdiction in the premises shall enter a decree or order for relief in
respect of a Credit Party or any of its Subsidiaries in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator, administrator or similar official of a Credit Party or
any of its Subsidiaries or for any substantial part of its property or ordering
the winding up or liquidation of, or an administrator in respect of, its
affairs; or (ii) an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect is commenced against a Credit
Party or any of its Subsidiaries and such petition remains unstayed and in
effect for a period of 60 consecutive days; or (iii) a Credit Party or any of
its Subsidiaries shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator, administrator or similar
official of such Person or any substantial part of its property or make any
general assignment for the benefit of creditors; or (iv) a Credit Party or any
of its Subsidiaries shall fail generally, or shall admit in writing its
inability, to pay its debts as they become due or any action shall be taken by
such Person in furtherance of any of the aforesaid purposes.

     (g) Defaults under Other Agreements.

     (i) A Credit Party or any of its Subsidiaries shall default in the due
performance or observance (beyond any applicable grace period with respect
thereto) of any material obligation or condition of any contract or lease to
which it is a party, including, but not limited to, any Hedging Agreement; or

     (ii) With respect to any Indebtedness in excess of $10,000,000 (other than
Indebtedness outstanding under this Credit Agreement) of a Credit Party or any
of its Subsidiaries (A) such Person shall (x) default in any payment (beyond the
applicable grace period with respect thereto, if any) with respect to any such
Indebtedness, or (y) default (after giving effect to any applicable grace
period) in the

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observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such holders, if any) to
require (determined without regard to whether any notice or lapse of time is
required) any such Indebtedness to become due prior to its stated maturity; or
(B) any such Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment prior to the
stated maturity thereof; or (C) any such Indebtedness shall mature and remain
unpaid.

     (h) Judgments. One or more judgments, orders, or decrees shall be entered
against any one or more of the Credit Parties and their Subsidiaries involving a
liability of $10,000,000 or more, in the aggregate, (to the extent not paid or
covered by insurance provided by a carrier who has acknowledged coverage) and
such judgments, orders or decrees (i) are the subject of any enforcement
proceeding commenced by any creditor or (ii) shall continue unsatisfied,
undischarged and unstayed for a period ending on the first to occur of (A) the
last day on which such judgment, order or decree becomes final and unappealable
or (B) 60 days.

     (i) ERISA. The occurrence of any of the following events or conditions:
(i) any “accumulated funding deficiency,” as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, shall exist with
respect to any Plan, or any Lien shall arise on the assets of a Credit Party,
any Subsidiary of a Credit Party or any ERISA Affiliate in favor of the PBGC or
a Plan; (ii) an ERISA Event shall occur with respect to a Single Employer Plan,
which is, in the reasonable opinion of the Administrative Agent, likely to
result in the termination of such Plan for purposes of Title IV of ERISA;
(iii) an ERISA Event shall occur with respect to a Multiemployer Plan or
Multiple Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in (A) the termination of such Plan for
purposes of Title IV of ERISA, or (B) a Credit Party, any Subsidiary of a Credit
Party or any ERISA Affiliate incurring any liability in connection with a
withdrawal from, reorganization of (within the meaning of Section 4241 of
ERISA), or insolvency (within the meaning of Section 4245 of ERISA) of such
Plan; (iv) any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility shall
occur which may subject a Credit Party, any Subsidiary of a Credit Party or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other instrument
pursuant to which a Credit Party, any Subsidiary of a Credit Party or any ERISA
Affiliate has agreed or is required to indemnify any Person against any such
liability; or (v) a Credit Party, any Subsidiary of a Credit Party 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 $500,000.

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     (j) Ownership. There shall occur a Change of Control.

     (k) Condemnation. All or substantially all of the property of a Credit
Party or any of its Subsidiaries shall become subject to a condemnation, taking
or other appropriation action by any Governmental Authority.

     9.2 Acceleration; Remedies.

     Upon the occurrence and during the continuation of an Event of Default, the
Administrative Agent may or shall, upon the request and direction of the
Required Lenders, take the following actions without prejudice to the rights of
the Administrative Agent or any Lender to enforce its claims against the Credit
Parties, except as otherwise specifically provided for herein:

     (a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.

     (b) Acceleration of Loans. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising from
drawings under Letters of Credit and any and all other Indebtedness or
obligations of any and every kind owing by a Credit Party to any of the Lenders
under the Credit Documents to be due whereupon the same shall be immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Credit Parties.

     (c) Cash Collateral. Direct the Borrower to Cash Collateralize (and the
Borrower agrees that upon receipt of such notice, or upon the occurrence of an
Event of Default under Section 9.1(f), it will immediately Cash Collateralize)
all then outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding. The Borrower will grant to the Administrative Agent, for the
benefit of the Issuing Lender and the Lenders, a security interest in all such
cash, deposit accounts and all balances therein and all proceeds of the
foregoing. The cash collateral shall be maintained in blocked, non-interest
bearing deposit accounts at Bank of America as additional security for the LOC
Obligations.

     (d) Enforcement of Rights. Enforce any and all rights and interests created
and existing under the Credit Documents, including, without limitation, all
rights and remedies against a Guarantor and all rights of set-off.

Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all accrued and unpaid fees and other indebtedness
or obligations owing to the Lenders hereunder shall immediately become due and

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payable without the giving of any notice or other action by the Administrative
Agent or the Lenders, which notice or other action is expressly waived by the
Credit Parties.

Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate “creditor” holding
a separate “claim” within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.

     9.3 Allocation of Payments After Event of Default.

     Notwithstanding any other provisions of this Credit Agreement, after the
occurrence and during the continuation of an Event of Default and the exercise
of remedies by the Administrative Agent or the Lenders pursuant to Section 9.2
(or after the Commitments shall automatically terminate and the Loans (with
accrued interest thereon) and all other amounts under the Credit Documents shall
automatically become due and payable in accordance with the terms of such
Section), all amounts collected or received by the Administrative Agent or any
Lender on account of amounts outstanding under any of the Credit Documents shall
be paid over or delivered as follows:

     FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation reasonable Attorney Costs) of the Administrative
Agent, the Issuing Lender or any of the Lenders in connection with enforcing the
rights of the Lenders under the Credit Documents, pro rata as set forth below;

     SECOND, to payment of any fees owed to the Administrative Agent, the
Issuing Lender or any Lender, pro rata as set forth below;

     THIRD, to the payment of all accrued interest payable to the Lenders
hereunder, pro rata as set forth below;

     FOURTH, to the payment of the outstanding principal amount of the Loans and
unreimbursed drawings under Letters of Credit, and to the payment or to Cash
Collateralize the outstanding LOC Obligations, pro rata as set forth below;

     FIFTH, to all other obligations which shall have become due and payable
under the Credit Documents and not repaid pursuant to clauses “FIRST” through
“FOURTH” above;

     SIXTH, to any principal amounts outstanding under Hedging Agreements
between a Credit Party and a Lender or Affiliate of a Lender, pro rata as set
forth below; and

     SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.

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In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, and
LOC Obligations held by such Lender bears to the aggregate then outstanding
Loans and LOC Obligations, or, in the case of clause “SIXTH” above, the
proportion of then outstanding obligations under Hedging Agreements) of amounts
available to be applied; and (c) to the extent that any amounts available for
distribution pursuant to clause “FOURTH” above are attributable to the issued
but undrawn amount of outstanding Letters of Credit, such amounts shall be held
by the Administrative Agent in a cash collateral account and applied (i) first,
to reimburse the Issuing Lender from time to time for any drawings under such
Letters of Credit and (ii) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses “FOURTH”,
“FIFTH” and “SIXTH” above in the manner provided in this Section 9.3.

SECTION 10

AGENCY PROVISIONS

     10.1 Appointment.

     (a) Each Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Credit Agreement and each other Credit Document and to exercise such powers
and perform such duties as are expressly delegated to it by the terms of this
Credit Agreement or any other Credit Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Credit Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary or trustee relationship with any Lender or participant, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Credit Agreement or any other Credit Document or otherwise
exist against the Administrative Agent. Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in the other Credit
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.

     (b) The Issuing Lender shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time (and except for so long) as the Administrative Agent may agree at the
request of the Required Lenders to act for the Issuing Lender with respect
thereto; provided, however, that the

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Issuing Lender shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this Section 10 with respect to any acts taken by or
omissions of the Issuing Lender in connection with Letters of Credit issued by
it or proposed to be issued by it and the application and agreements for letters
of credit pertaining to the Letters of Credit as fully as if the term
“Administrative Agent” as used in this Section 10 included the Issuing Lender
with respect to such acts or omissions, and (ii) as additionally provided herein
with respect to the Issuing Lender.

     (c) None of the Lenders identified on the facing page or signature pages of
this Credit Agreement as a “syndication agent”, “documentation agent”, “book
manager” or other title shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement or the other Credit Documents
other than those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders so identified shall have or be deemed to have any
fiduciary relationship with any Lender. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders so identified in deciding to
enter into this Credit Agreement or the other Credit Documents or in taking or
not taking action hereunder.

     10.2 Delegation of Duties.

     The Administrative Agent may execute any of its duties under this Credit
Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects with reasonable care.

     10.3 Exculpatory Provisions.

     No Agent-Related Person shall (a) be liable for any action taken or omitted
to be taken by any of them under or in connection with this Credit Agreement or
any other Credit Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
any Credit Party or any officer thereof, contained herein or in any other Credit
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Credit Agreement or any other Credit Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or any other Credit Document, or for any failure of any Credit
Party or any other party to any Credit Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this Credit
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party or any Affiliate thereof.

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     10.4 Reliance on Communications.

     (a) The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Credit Party),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat each Lender as the owner of the
interests hereunder for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been delivered to the Administrative
Agent in accordance with Section 11.3(b). The Administrative Agent shall be
fully justified in failing or refusing to take any action under any Credit
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Credit Agreement
or any other Credit Document in accordance with a request or consent of the
Required Lenders or all the Lenders, if required hereunder, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Lenders and participants, and their respective successors and assigns. Where
this Credit Agreement expressly permits or prohibits an action unless the
Required Lenders otherwise determine, the Administrative Agent shall, and in all
other instances, the Administrative Agent may, but shall not be required to,
initiate any solicitation for the consent or a vote of the Lenders.

     (b) For purposes of determining compliance with the conditions specified in
Section 5.1, each Lender that has signed this Credit Agreement shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Administrative Agent to such Lender
for consent, approval, acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender.

     10.5 Notice of Default.

     The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Credit Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default.” The
Administrative Agent will notify the Lenders

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of its receipt of any such notice. The Administrative Agent shall take such
action with respect to such Default or Event of Default as may be reasonably
directed by the Required Lenders in accordance with Section 9.2; provided,
however, that unless and until the Administrative Agent has received any such
direction, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of the
Lenders.

     10.6 Non-Reliance on Administrative Agent and Other Lenders.

     Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person or any other Lender and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Credit Parties and their respective
Affiliates, and all applicable bank or other regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Credit Agreement and to extend credit to the Borrower hereunder. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement and the other Credit Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Credit Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person, it being understood that the Administrative Agent shall forward to the
Lenders information it receives pursuant to Section 7.1.

     10.7 Indemnification.

     Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Agent-Related

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Person’s gross negligence or willful misconduct; it being understood that no
action taken in accordance with the directions of the Required Lenders (or all
Lenders, if applicable) shall be deemed to constitute gross negligence or
willful misconduct for purposes of this Section 10.7. Without limitation of the
foregoing, each Lender shall reimburse the Administrative Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including Attorney
Costs) incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Credit Agreement,
any other Credit Document, or any document contemplated by or referred to
herein, to the extent that the Administrative Agent is not reimbursed for such
expenses by or on behalf of the Credit Parties. The undertaking in this
Section 10.7 shall survive termination of the Commitments, the payment of all
Obligations hereunder and the resignation or replacement of the Administrative
Agent.

     10.8 Administrative Agent in Its Individual Capacity.

     Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent or the
Issuing Lender hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding any Credit Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Credit Party or such Affiliate) and that the Administrative Agent
shall be under no obligation to provide such information to them. With respect
to its Loans, Bank of America shall have the same rights and powers under this
Credit Agreement as any other Lender and may exercise such rights and powers as
though it were not the Administrative Agent or the Issuing Lender, and the terms
“Lender” and “Lenders” include Bank of America in its individual capacity.

     10.9 Successor Agent.

     The Administrative Agent may resign as Administrative Agent upon 30 days’
notice to the Lenders; provided that any such resignation by Bank of America
shall also constitute its resignation as Issuing Lender (other than with respect
to Letters of Credit outstanding at such time until such Letters of Credit
expire or are substituted as set forth below). If the Administrative Agent
resigns under this Credit Agreement, the Required Lenders shall appoint from
among the Lenders a successor administrative agent for the Lenders which
successor administrative agent (such appointment, absent the existence of an
Event of Default, to be subject to the consent of the Borrower, which consent of
the Borrower shall not be unreasonably withheld or delayed). If no successor
administrative agent is appointed prior to the effective date of the resignation
of the Administrative Agent, the Administrative Agent may appoint, after
consulting with the Lenders and the Borrower, a successor administrative agent
from among the

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Lenders. Upon the acceptance of its appointment as successor administrative
agent hereunder, the Person acting as such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative
Agent, Issuing Lender and the respective terms “Administrative Agent,” and
“Issuing Lender” shall mean such successor administrative agent, Letter of
Credit issuer, and the retiring Administrative Agent’s appointment, powers and
duties as Administrative Agent shall be terminated and the retiring Issuing
Lender’s rights, powers and duties as such shall be terminated (other than as
set forth above), without any other or further act or deed on the part of such
retiring Issuing Lender or any other Lender, other than the obligation of the
successor Issuing Lender to issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or to make
other arrangements satisfactory to the retiring Issuing Lender to effectively
assume the obligations of the retiring Issuing Lender with respect to such
Letters of Credit. After any retiring Administrative Agent’s resignation
hereunder as Administrative Agent, the provisions of this Section 10 and
Sections 11.5 and 11.10 shall continue to inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Credit Agreement. If no successor administrative agent has accepted appointment
as Administrative Agent by the date which is 30 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative
Agent’s resignation shall nevertheless thereupon become effective and the
Lenders shall perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor agent as
provided for above.

     10.10 Administrative Agent May File Proof of Claims.

     In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Credit Party, the Administrative Agent
(irrespective of whether the principal of any Loan or LOC 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 Credit Party) 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, LOC Obligations and all other
Credit Party Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of the
Lenders and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and the
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders and the Administrative Agent under Sections 3.4 and
11.5) allowed in such judicial proceeding; and

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

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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent or the Issuing
Lender, as applicable, and, in the event that the Administrative Agent or
Issuing Lender shall consent to the making of such payments directly to the
Lenders, to pay to the Administrative Agent or Issuing Lender any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent or Issuing Lender and its respective agents and counsel,
and any other amounts due the Administrative Agent or Issuing Lender under
Sections 3.4 and 11.5.

     Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Credit Party 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.

SECTION 11

MISCELLANEOUS

     11.1 Notices and other Communications; Facsimile Copies.

     (a) General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission). All written notices and all other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable address, facsimile number, electronic mail address or telephone
number specified for such Person on Schedule 11.1 or to such other address,
facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to the other parties. All such notices and
other communications shall be deemed to be given or made upon the earlier to
occur of (i) actual receipt by the relevant party hereto and (ii) (A) if
delivered by hand or by courier, when signed for by or on behalf of the relevant
party hereto; (B) if delivered by mail, four Business Days after deposit in the
mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has
been confirmed by telephone; and (D) if delivered by electronic mail (which form
of delivery is subject to the provisions of subsection (c) below), when
delivered; provided, however, that notices and other communications to the
Administrative Agent or the Lenders pursuant to Section 2 shall not be effective
until actually received by the Administrative Agent or the Lenders, as the case
may be. In no event shall a voicemail message be effective as a notice,
communication or confirmation hereunder.

     (b) Effectiveness of Facsimile Documents and Signatures. Credit Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable law, have the same force
and effect as manually-signed originals and shall be binding on the Borrower,
the Administrative Agent and the Lenders. The Administrative

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Agent may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.

     (c) Electronic Communications. Notices and other communications to the
Lenders 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 pursuant to Section 2 if such Lender has notified
the Administrative Agent that it is incapable of receiving notices under such
Section by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.

     (d) Reliance by the Administrative Agent, Issuing Lender and Lenders. The
Administrative Agent, the Issuing Lender and the Lenders shall be entitled to
rely and act upon any notices purportedly given by or on behalf of the Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof. The Borrower shall indemnify each
Agent-Related Person, the Issuing Lender and each Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other communications with the Administrative Agent or the Issuing Lender
may be recorded by the Administrative Agent or the Issuing Lender, as
applicable, and each of the parties hereto hereby consents to such recording.

     11.2 Right of Set-Off, Automatic Debits.

     (a) In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described in
Section 9.2, each Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any time
held or owing by such Lender (including, without limitation, branches, agencies
or Affiliates of such Lender wherever located) to or for the credit or the
account of any Credit Party against obligations and liabilities of such Credit
Party to the Lenders hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether the Administrative Agent or the Lenders shall
have made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any such set-off
shall be deemed to have been made immediately upon the occurrence of an Event of
Default even though such charge is made or entered on the books of such Lender
subsequent thereto. The Credit Parties hereby agree that any Participation
Purchaser may exercise all rights of set-off with respect to its participation
interest as fully as if such Person were a Lender hereunder.

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     (b) In addition to clause (a) above, with respect to any principal or
interest payment, fee, or any other cost or expense (including Attorney Costs),
due and payable to the Administrative Agent, the Issuing Lender or the Lenders
under the Credit Documents, the Credit Parties hereby irrevocably authorize and
direct the Administrative Agent to debit any deposit account of the Credit
Parties with the Administrative Agent (as one of the Lenders) in an amount such
that the aggregate amount debited from all such deposit accounts does not exceed
such payment, fee, or other cost or expense. If there are insufficient funds in
such deposit accounts to cover the amount of the payment, fee, other cost or
expense then due, such debits will be reversed (in whole or in part, in the
Administrative Agent’s sole discretion) and such amount not debited shall be
deemed to be unpaid. No such debit under this Section 11.2(b) shall be deemed a
set-off.

     11.3 Benefit of Agreement.

     (a) The provisions of this Credit Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
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, or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of subsection (f) of this Section (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Credit
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than BAS, the parties hereto, their respective successors and assigns
permitted hereby and Participation Purchasers to the extent provided in
subsection (d) of this Section) any legal or equitable right, remedy or claim
under or by reason of this Credit Agreement.

     (b) Any Lender may at any time assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Credit Agreement
(including all or a portion of its Commitment and the 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)
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

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no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);
(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 Credit
Agreement with respect to the Loans or the Commitment assigned; (iii) any
assignment of a Commitment must be approved by the Administrative Agent (which
approval shall not be unreasonably withheld) 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 of $3,500.
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 Credit Agreement and, to the extent of the interest assigned by
such Assignment and Assumption, have the rights and obligations of a Lender
under this Credit 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 Credit Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and
obligations under this Credit Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 3.9 through
3.15 and 11.5 with respect to facts and circumstances occurring prior to the
effective date of such assignment). Upon request, the Borrower (at its expense)
shall execute and deliver a Note to the assignee Lender. Any assignment or
transfer by a Lender of rights or obligations under this Credit Agreement that
does not comply with this subsection shall be treated for purposes of this
Credit Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.

     (c) The Administrative Agent, acting solely for this purpose as an agent of
the Borrower, shall maintain at one of its offices in the United States a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Credit Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

     (d) Any Lender may at any time, without the consent of, or notice to, the
Borrower or the Administrative Agent, sell participations to any Person (other
than a natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each,

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a “Participation Purchaser”) in all or a portion of such Lender’s rights and/or
obligations under this Credit Agreement (including all or a portion of its
Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Credit Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Credit
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 Credit Agreement and to approve any amendment, modification or
waiver of any provision of this Credit Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participation Purchaser, agree to any amendment, waiver or other modification
described in clauses (a) through (g) of Section 11.6 that directly affects such
Participation Purchaser. Subject to subsection (e) of this Section, the Borrower
agrees that each Participation Purchaser shall be entitled to the benefits of
Sections 3.9 through 3.15 and 11.5 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 Participation Purchaser also shall
be entitled to the benefits of Section 11.2 as though it were a Lender, provided
such Participation Purchaser agrees to be subject to Section 3.8 as though it
were a Lender.

     (e) A Participation Purchaser shall not be entitled to receive any greater
payment under Section 3.9 or 3.13 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participation
Purchaser, unless the sale of the participation to such Participation Purchaser
is made with the Borrower’s prior written consent. A Participation Purchaser
that would be a “foreign corporation, partnership or trust” within the meaning
of the Code if it were a Lender shall not be entitled to the benefits of Section
3.13 unless the Borrower is notified of the participation sold to such
Participation Purchaser and such Participation Purchaser agrees, for the benefit
of the Borrower, to comply with Section 3.13(d) as though it were a Lender.

     (f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Credit 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) Notwithstanding anything to the contrary contained herein, any Lender
(a “Granting Lender”) may grant to a special purpose funding vehicle managed or
sponsored by the Granting Lender or an Affiliate thereof (an “SPC”) the option
to fund all or any part of any Loan that such Granting Lender would otherwise be
obligated to fund pursuant to this Credit Agreement; provided that (i) nothing
herein shall constitute a

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commitment by any SPC to fund any Loan, (ii) if an SPC elects not to exercise
such option or otherwise fails to fund all or any part of such Loan, the
Granting Lender shall be obligated to fund such Loan pursuant to the terms
hereof, (iii) no SPC shall have any voting rights pursuant to Section 11.6, (iv)
with respect to notices, payments and other matters hereunder, the Borrower, the
Administrative Agent and the Lenders shall not be obligated to deal with an SPC,
but may limit their communications and other dealings relevant to such SPC to
the applicable Granting Lender and (v) each Granting Lender’s obligations under
this Credit Agreement shall remain unchanged. Each party hereto agrees that no
SPC will be entitled to any rights or benefits except as expressly set forth in
this subsection (g). The funding of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent that, and as if, such Loan
were funded by such Granting Lender. Each party hereto hereby agrees that no SPC
shall be liable for any indemnity or payment under this Credit Agreement for
which a Lender would otherwise be liable for so long as, and to the extent, the
Granting Lender provides such indemnity or makes such payment. Notwithstanding
anything to the contrary contained in this Credit Agreement, any SPC may
disclose on a confidential basis any non-public information relating to its
funding of Loans to any rating agency, commercial paper dealer or provider of
any surety or guarantee to such SPC. This subsection (g) may not be amended
without the prior written consent of each Granting Lender, all or any part of
whose Loan is being funded by an SPC at the time of such amendment.

     (h) Notwithstanding anything to the contrary contained herein, any Lender
that is a Fund may create a security interest in all or any portion of the Loans
owing to it and the Note, if any, held by it to the trustee for holders of
obligations owed, or securities issued, by such Fund as security for such
obligations or securities, provided that unless and until such trustee actually
becomes a Lender in compliance with the other provisions of this Section 11.3,
(i) no such pledge shall release the pledging Lender from any of its obligations
under the Credit Documents and (ii) such trustee shall not be entitled to
exercise any of the rights of a Lender under the Credit Documents even though
such trustee may have acquired ownership rights with respect to the pledged
interest through foreclosure or otherwise.

     (i) 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, upon 30 days’ notice to the Borrower
and the Lenders, resign as Issuing Lender. In the event of any such resignation
as Issuing Lender, the Borrower shall be entitled to appoint from among the
Lenders a successor Issuing Lender hereunder; provided, however, that no failure
by the Borrower to appoint any such successor shall affect the resignation of
Bank of America as Issuing Lender. If Bank of America resigns as Issuing Lender,
it shall retain all the rights and obligations of the Issuing Lender hereunder
with respect to all Letters of Credit outstanding as of the effective date of
its resignation as Issuing Lender and all LOC Obligations with respect

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thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations pursuant to Section 2.2(c)).

     11.4 No Waiver; Remedies Cumulative.

     No failure or delay on the part of the Administrative Agent or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any Credit Party and
the Administrative Agent or any Lender shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.

     11.5 Payment of Expenses; Indemnification.

     The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs and
expenses of (i) the Agent-Related Persons in connection with (A) the
negotiation, preparation, execution and delivery and syndication of this Credit
Agreement and the other Credit Documents and the documents and instruments
referred to therein (including, without limitation, the reasonable fees and
expenses of Moore & Van Allen, special counsel to the Administrative Agent) and
(B) any amendment, waiver or consent relating hereto and thereto including, but
not limited to, any such amendments,

waivers or consents resulting from or related to any work-out, renegotiation or
restructure relating to the performance by the Credit Parties under this Credit
Agreement, and (ii) the Agent-Related Persons and the Lenders in connection with
(A) enforcement of the Credit Documents and the documents and instruments
referred to therein, including, without limitation, in connection with any such
enforcement, the reasonable Attorneys’ Costs of the Administrative Agent and
each of the Lenders and (B) any bankruptcy or insolvency proceeding of any
Credit Party or any of its Subsidiaries and (b) indemnify the Agent-Related
Persons and each Lender, its officers, directors, employees, representatives,
counsel and agents from and hold each of them harmless against any and all
losses, liabilities, claims, damages or expenses incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of, any
investigation, litigation or other proceeding (whether or not such Agent-Related
Person or any Lender is a party thereto) related to the entering into and/or
performance of any Credit Document or the use of proceeds of any Loans
(including other extensions of credit) hereunder or the consummation of any
other transactions contemplated in any Credit Document, including, without
limitation, reasonable Attorneys’ Costs incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of
gross negligence or willful misconduct on the part of the Person to be
indemnified or from the material breach by the Person to be indemnified of its
obligations under the Credit

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Documents) (all of the foregoing, collectively, “Indemnified Liabilities”). The
agreements in this Section 11.5 shall survive the termination of the Commitments
and the repayment of the Credit Party Obligations.

     11.6 Amendments, Waivers and Consents.

     Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the then Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall without
the consent of all the Lenders:

     (a) extend the Maturity Date, or postpone or extend the time for any
payment or prepayment of principal;

     (b) (i) reduce the rate of interest or the amount of fees or (ii) extend
the time of payment of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates) thereon or fees
hereunder;

     (c) reduce or waive the principal amount of any Loan;

     (d) increase or extend the Commitment of a Lender (it being understood and
agreed that a waiver of any Default or Event of Default or a waiver of any
mandatory reduction in the Commitments shall not constitute a change in the
terms of any Commitment of any Lender);

     (e) release the Borrower from its obligations or consent to the assignment
or transfer by the Borrower of any of its rights and obligations under (or in
respect of) the Credit Documents or release all or substantially all of the
Guarantors from their respective obligations under the Credit Documents;

     (f) amend, modify or waive any provision of this Section 11.6 or
Section 3.4(a), 3.4(b), 3.4(c)(i), 3.7, 3.8, 9.1(a), 9.3, 11.2, 11.3 or 11.5; or

     (g) reduce any percentage specified in, or otherwise modify, the definition
of Required Lenders.

Notwithstanding the above, (i) no provisions of Section 10 may be amended or
modified without the consent of the Administrative Agent and (ii) no provisions
of Section 2.2 may be amended or modified without the consent of the Issuing
Lender.

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization

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plan that affects the Loans or the Letters of Credit, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code
supersedes the unanimous consent provisions set forth herein and (y) the
Required Lenders may consent to allow a Credit Party to use cash collateral in
the context of a bankruptcy or insolvency proceeding.

     11.7 Counterparts.

     This Credit Agreement may be executed in any number of counterparts, each
of which where so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument.

     11.8 Headings.

     The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.

     11.9 Defaulting Lender.

     Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.

     11.10 Survival of Indemnification and Representations and Warranties.

     All indemnities set forth herein and all representations and warranties
made hereunder and in any other Credit Document or other document delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery hereof and thereof. Such representations and
warranties have been or will be relied upon by the Administrative Agent, the
Issuing Lender and each Lender, regardless of any investigation made by the
Administrative Agent, the Issuing Lender or any Lender or on their behalf and
notwithstanding that the Administrative Agent, the Issuing Lender or any Lender
may have had notice or knowledge of any Default or Event of Default at the time
of any Extension of Credit, and shall continue in full force and effect as long
as any Loan or any other Credit Party Obligation hereunder shall remain unpaid
or unsatisfied or any Letter of Credit shall remain outstanding.

     11.11 Governing Law; Jurisdiction.

     THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Each Credit Party irrevocably consents to

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the service of process in any action or proceeding with respect to this Credit
Agreement or any other Credit Document by the mailing of copies thereof by
registered or certified mail, postage prepaid, to it at the address for notices
pursuant to Section 11.1, such service to become effective 10 days after such
mailing. Nothing herein shall affect the right of a Lender to serve process in
any other manner permitted by law.

     11.12 Waiver of Jury Trial; Waiver of Consequential Damages.

     EACH PARTY TO THIS CREDIT AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY
CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY CREDIT
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS CREDIT AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. Each Credit
Party agrees not to assert any claim against the Administrative Agent, the
Issuing Lenders, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys or agents, on any theory of liability,
for special, indirect, consequential or punitive damages arising out of or
otherwise relating to any of the transactions contemplated herein.

     11.13 Severability.

     If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

     11.14 Further Assurances.

     The Credit Parties agree, upon the request of the Administrative Agent, to
promptly take such actions, as reasonably requested, as is necessary to carry
out the intent of this Credit Agreement and the other Credit Documents.

     11.15 Confidentiality.

     Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.11 to
keep confidential any Information (as

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defined below) from time to time supplied to it under any Credit Document;
provided, however, that nothing herein shall prevent the disclosure of any such
Information to (a) the extent a Lender in good faith believes such disclosure is
required by Requirement of Law or by any subpoena or similar legal process,
(b) 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) counsel for a Lender or to
its accountants, (d) bank examiners or auditors or comparable Persons, (e) any
Affiliate of a Lender and its respective partners, directors, officers,
employees, agents, advisors and representatives (it being understood that such
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (f) any other Lender, or any assignee, transferee or Participant
Purchaser, or any potential assignee, transferee or Participant Purchaser, of
all or any portion of any Lender’s rights under this Credit Agreement who is
notified of the confidential nature of the information, (g) to any Person with
the consent of the Borrower, (h) any Person in connection with the exercise of
any remedies hereunder or under any other Credit Document or any action or
proceeding relating to this Credit Agreement or any other Credit Document or the
enforcement of rights hereunder or thereunder or (i) any other Person in
connection with any litigation to which any one or more of the Lenders is a
party. No Lender shall have any obligation under this Section 11.15 to the
extent any such information becomes available on a non-confidential basis from a
source other than a Credit Party or that any information becomes publicly
available other than by a breach of this Section 11.15 by any Lender or
representative thereof.

For purposes of this Section, “Information” means all information received from
any Credit Party relating to any Credit Party or any of their respective
businesses, other than any such information that is available to the
Administrative Agent, any Lender or the Issuing Lender on a non-confidential
basis prior to disclosure by such Credit Party, provided that, in the case of
information received from any Credit Party 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.

     11.16 Entirety.

     This Credit Agreement together with the other Credit Documents and the Fee
Letter represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.

     11.17 Binding Effect; Continuing Agreement.

     (a) This Credit Agreement shall become effective at such time when all of
the conditions set forth in Section 5.1 have been satisfied or waived by the
Lenders and it

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shall have been executed by the Borrower, the Guarantors and the Administrative
Agent, and the Administrative Agent shall have received copies hereof (telefaxed
or otherwise) which, when taken together, bear the signatures of each Lender,
and thereafter this Credit Agreement shall be binding upon and inure to the
benefit of the Borrower, the Guarantors, the Administrative Agent and each
Lender and their respective successors and assigns. Upon this Credit Agreement
becoming effective, the Existing Credit Agreements shall be deemed terminated
and the Credit Parties and the lenders party to the Existing Credit Agreements
shall no longer have any obligations thereunder (other than those obligations in
the Existing Credit Agreements that expressly survive the termination of the
Existing Credit Agreements).

     (b) This Credit Agreement shall be a continuing agreement and shall remain
in full force and effect until all Loans, LOC Obligations, interest, fees and
other Credit Party Obligations have been paid in full and all Commitments and
Letters of Credit have been terminated. Upon termination, the Credit Parties
shall have no further obligations (other than the indemnification provisions
that survive) under the Credit Documents; provided that should any payment, in
whole or in part, of the Credit Party Obligations be rescinded or otherwise
required to be restored or returned by the Administrative Agent or any Lender,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, then the Credit Documents shall automatically be reinstated and all
amounts required to be restored or returned and all costs and expenses incurred
by the Administrative Agent or any Lender in connection therewith shall be
deemed included as part of the Credit Party Obligations.

     11.18 USA PATRIOT Act Notice.

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.

             
BORROWER:
                POLARIS INDUSTRIES INC.,     a Minnesota corporation
 
           

  By:   /s/ Michael W. Malone    

   

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

     

  Name:   Michael W. Malone    

  Title:   Chief Financial Officer, Secretary and    

      Vice President-Finance    

 

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

 

              GUARANTORS:   POLARIS REAL ESTATE CORPORATION OF     IOWA, INC., a
Delaware corporation
 
                POLARIS REAL ESTATE CORPORATION,     a Delaware corporation
 
                POLARIS ACCEPTANCE INC.,     a Minnesota corporation
 
                POLARIS SALES INC., a Minnesota corporation
 
                POLARIS DIRECT INC., a Minnesota corporation
 
                POLARIS INDUSTRIES INC., a Delaware corporation
 
                POLARIS INDUSTRIES MANUFACTURING LLC,     a Minnesota limited
liability company
 
           

  By:   /s/ Michael W. Malone    

   

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

     

  Name:   Michael W. Malone    

  Title:   Chief Financial Officer, Secretary and    

      Vice President-Finance of each of the foregoing    

      entities    

 

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              ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,     as Administrative
Agent
 
           

  By:   /s/ Molly J. Oxford    

     

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  Name:   Molly J. Oxford    

  Title:   Vice President    

 

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              LENDERS:   BANK OF AMERICA, N.A., individually in its capacity    
as a Lender and in its capacity as Issuing Lender
 
           

  By:   /s/ Jeffrey A. Armitage    

     

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  Name:   Jeffrey A. Armitage    

  Title:   Principal    

 

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                  U.S. BANK N.A.
 
           

  By:   /s/ Karen Weathers    

     

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  Name:   Karen Weathers    

  Title:   Vice President    

 

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                  MIZUHO CORPORATE BANK, LTD.
 
           

  By:   /s/ Robert Gallagher    

     

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  Name:   Robert Gallagher    

  Title:   Senior Vice President & Team Leader    

 

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                  COMERICA BANK
 
           

  By:   /s/ Timothy O’Rourke    

     

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  Name:   Timothy O’Rourke    

  Title:   Vice President    

 

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                  BARCLAYS BANK PLC
 
           

  By:   /s/ Nicholas Bell    

     

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  Name:   Nicholas Bell    

  Title:   Director    

 

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                  WELLS FARGO BANK, NATIONAL ASSOCIATION
 
           

  By:   /s/ Mark H. Halldorson    

     

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  Name:   Mark H. Halldorson    

  Title:   Vice President    
 
           

  By:   /s/ Douglas A. Lindstrom    

     

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  Name:   Douglas A. Lindstrom    

  Title:   Vice President    

 

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                  THE BANK OF TOKYO-MITSUBISHI, LTD.,     CHICAGO BRANCH
 
           

  By:   /s/ Patrick McCue    

     

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  Name:   Patrick McCue    

  Title:   Vice President & Manager    

 

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                  ROYAL BANK OF CANADA
 
           

  By:   /s/ Gordon MacArthur    

     

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  Name:   Gordon MacArthur    

  Title:   Authorized Signatory