Exhibit 10.1

Execution

CUSIP Number: Deal # 71902FAA4

 

 

 

FIRST AMENDED AND RESTATED

CREDIT AGREEMENT

Among

THE PHOENIX COMPANIES, INC.

and

PHOENIX LIFE INSURANCE COMPANY,

as Borrowers,

THE LENDERS NAMED HEREIN,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

THE BANK OF NEW YORK,

as Syndication Agent,

and

BMO CAPITAL MARKETS FINANCING, INC.,

JPMORGAN CHASE BANK, N.A.,

and

PNC BANK, NATIONAL ASSOCIATION,

as Documentation Agents

$150,000,000 Senior Revolving Credit Facility

WACHOVIA CAPITAL MARKETS, LLC

Sole Lead Arranger and Sole Book Runner

Dated as of April 2, 2008

 

 

 

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TABLE OF CONTENTS

 

          Page ARTICLE I DEFINITIONS

1.1

   Defined Terms    2

1.2

   Accounting Terms; GAAP and SAP    19

1.3

   Other Terms; Construction    19 ARTICLE II AMOUNT AND TERMS OF THE LOANS

2.1

   Commitments    19

2.2

   Borrowings    20

2.3

   Disbursements; Funding Reliance; Domicile of Loans    21

2.4

   Evidence of Debt; Notes    21

2.5

   Termination and Reduction of Commitments    22

2.6

   Mandatory Payments and Prepayments    23

2.7

   Voluntary Prepayments    24

2.8

   Interest    25

2.9

   Fees    26

2.10

   Interest Periods    27

2.11

   Conversions and Continuations    27

2.12

   Method of Payments; Computations; Apportionment of Payments    28

2.13

   Recovery of Payments    30

2.14

   Use of Proceeds    31

2.15

   Pro Rata Treatment    31

2.16

   Increased Costs; Change in Circumstances; Illegality    32

2.17

   Taxes    34

2.18

   Compensation    36

2.19

   Replacement of Lenders; Mitigation of Costs    36

2.20

   Commitment Increase    37 ARTICLE III CONDITIONS OF CLOSING AND BORROWING

3.1

   Conditions of Closing    38

3.2

   Conditions of Borrowings    40

 

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ARTICLE IV REPRESENTATIONS AND WARRANTIES

4.1

   Corporate Organization and Power    40

4.2

   Authorization; Enforceability    41

4.3

   No Violation    41

4.4

   Governmental and Third-Party Authorization; Permits    41

4.5

   Litigation    42

4.6

   Taxes    42

4.7

   Subsidiaries    42

4.8

   Full Disclosure    42

4.9

   Margin Regulations    43

4.10

   Financial Matters    43

4.11

   ERISA    44

4.12

   Environmental Matters    44

4.13

   Compliance with Laws    44

4.14

   Intellectual Property    44

4.15

   Investment Company Act    45

4.16

   Insurance    45

4.17

   OFAC; Anti-Terrorism Laws    45 ARTICLE V AFFIRMATIVE COVENANTS

5.1

   Financial Statements    45

5.2

   Other Business and Financial Information    47

5.3

   Existence; Franchises; Maintenance of Properties    48

5.4

   Compliance with Laws    48

5.5

   Payment of Obligations    48

5.6

   Insurance    48

5.7

   Maintenance of Books and Records; Inspection    49

5.8

   Environmental Laws    49

5.9

   OFAC, PATRIOT Act Compliance    49

5.10

   Further Assurances    49 ARTICLE VI FINANCIAL COVENANTS

6.1

   Maximum Consolidated Indebtedness to Total Capitalization    50

6.2

   Minimum Consolidated Net Worth    50

6.3

   Minimum Risk-Based Capital    50

6.4

   Minimum A.M. Best Financial Strength Rating    50

 

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ARTICLE VII NEGATIVE COVENANTS

7.1

   Liens    51

7.2

   Merger, Consolidation and Sales of Assets    53

7.3

   Indebtedness    54

7.4

   Investments    54

7.5

   Restricted Payments    56

7.6

   Transactions with Affiliates    56

7.7

   Lines of Business    56

7.8

   Pari Passu Ranking    56

7.9

   Accounting Changes    57 ARTICLE VIII GUARANTY

8.1

   Guaranty    57

8.2

   Guaranty Unconditional    57

8.3

   Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances
   58

8.4

   Waiver by the Parent    58

8.5

   Subrogation    58

8.6

   Stay of Acceleration    58 ARTICLE IX EVENTS OF DEFAULT

9.1

   Events of Default    58

9.2

   Remedies: Termination of Commitments, Acceleration, etc.    61

9.3

   Remedies: Set-Off    61 ARTICLE X THE ADMINISTRATIVE AGENT

10.1

   Appointment and Authority    62

10.2

   Rights as a Lender    62

10.3

   Exculpatory Provisions    62

10.4

   Reliance by Administrative Agent    63

10.5

   Delegation of Duties    63

10.6

   Resignation of Administrative Agent    64

10.7

   Non-Reliance on Administrative Agent and Other Lenders    64

10.8

   No Other Duties, Etc.    64

 

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ARTICLE XI MISCELLANEOUS

11.1

   Expenses; Indemnity; Damage Waiver    65

11.2

   Governing Law; Submission to Jurisdiction; Waiver of Venue; Service of
Process    66

11.3

   Waiver of Jury Trial    67

11.4

   Notices; Effectiveness; Electronic Communication    67

11.5

   Amendments, Waivers, etc.    68

11.6

   Successors and Assigns    69

11.7

   No Waiver    72

11.8

   Survival    73

11.9

   Severability    73

11.10

   Construction    73

11.11

   Confidentiality    73

11.12

   Separateness of Obligations    74

11.13

   Counterparts; Integration; Effectiveness    74

11.14

   Amendment and Restatement    74

11.15

   Disclosure of Information    74

11.16

   PATRIOT Act Notice    75

11.17

   Termination of PXP as a Borrower    75

 

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EXHIBITS

 

Exhibit A    Form of Note Exhibit B-1    Form of Notice of Borrowing Exhibit B-2
   Form of Notice of Conversion/Continuation Exhibit C    Form of Compliance
Certificate Exhibit D    Form of Assignment and Assumption SCHEDULES
Schedule 1.1(a)    Commitments and Notice Addresses Schedule 4.6    Taxes
Schedule 4.7    Subsidiaries Schedule 4.11    ERISA Events Schedule 7.1    Liens

 

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FIRST AMENDED AND RESTATED

CREDIT AGREEMENT

THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 2, 2008, is
made among THE PHOENIX COMPANIES, INC., a Delaware corporation (the “Parent”)
and PHOENIX LIFE INSURANCE COMPANY, a New York stock insurance company (“PLIC”
and, collectively with the Parent, the “Borrowers,” and each a “Borrower”), the
Lenders (as hereinafter defined), WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent for the Lenders, THE BANK OF NEW YORK, as Syndication Agent
for the Lenders, and BMO CAPITAL MARKETS FINANCING, INC., JPMORGAN CHASE BANK,
N.A., and PNC BANK, NATIONAL ASSOCIATION, as Documentation Agents for the
Lenders.

BACKGROUND STATEMENT

The Borrowers, Phoenix Investment Partners, Ltd. a Delaware corporation (“PXP”),
the Administrative Agent and the Lenders are parties to a Credit Agreement (the
“Prior Credit Agreement”) dated as of June 6, 2006 (which Prior Credit Agreement
amended and restated an earlier Credit Agreement between the same parties dated
as of November 22, 2004) pursuant to which the Lenders have made available to
the Borrowers a revolving credit facility in the aggregate principal amount of
$150,000,000.

In anticipation of the spin-off by the Parent of PXP to the Parent’s
shareholders, the Borrowers have requested that the Lenders and Administrative
Agent enter into this Agreement to, among other things, (i) release PXP from its
Obligations under the Prior Credit Agreement and (ii) adjust certain financial
covenants of the Borrowers.

The Lenders and the Administrative Agent are willing to make the amendments set
forth herein and to continue to make available to the Borrowers the credit
facilities described herein, in each case subject to and on the terms and
conditions set forth in this Agreement. Except as expressly provided in Article
VIII with respect to the guaranty of the Parent, each Borrower shall be
severally, and not jointly, liable for the Loans made to such Borrower
hereunder.

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AGREEMENT

NOW, THEREFORE, in consideration of the mutual provisions, covenants and
agreements herein contained, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Defined Terms. For purposes of this Agreement, in addition to the terms
defined elsewhere herein, the following terms have the meanings set forth below
(such meanings to be equally applicable to the singular and plural forms
thereof):

“Account Designation Letter” means a letter from a Borrower to the
Administrative Agent, duly completed and signed by an Authorized Officer of such
Borrower and in form and substance reasonably satisfactory to the Administrative
Agent, listing any one or more accounts to which such Borrower may from time to
time request the Administrative Agent to forward the proceeds of any Loans made
hereunder.

“Acquisition” has the meaning given to such term in Section 7.4.

“Acquisition Amount” has the meaning given to such term in Section 7.4(v).

“Additional Lender” has the meaning given to such term in Section 2.20(a).

“Adjusted LIBOR Rate” means, at any time with respect to any LIBOR Loan, a rate
per annum equal to the LIBOR Rate as in effect at such time plus the Applicable
Percentage for LIBOR Loans as in effect at such time.

“Administrative Agent” means Wachovia, in its capacity as Administrative Agent
appointed under Section 10.1, and its successors and permitted assigns in such
capacity.

“Administrative Questionnaire” means, with respect to each Lender, the
administrative questionnaire in the form submitted to such Lender by the
Administrative Agent and returned to the Administrative Agent duly completed by
such Lender.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
Notwithstanding the foregoing, neither the Administrative Agent nor any Lender
shall be deemed an “Affiliate” of any Borrower.

“Aggregate Credit Exposure” means, at any time, the aggregate principal amount
of Loans outstanding at such time.

“Agreement” means this Credit Agreement, as amended, modified, restated or
supplemented from time to time in accordance with its terms.

“A.M. Best” means A.M. Best Company and its successors and assigns.

 

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“Annual Statement” means the annual financial statement of any Insurance
Subsidiary as required to be filed with any Insurance Regulatory Authority,
together with all exhibits or schedules filed therewith, prepared in conformity
with SAP. References to amounts on particular exhibits, schedules, lines, pages
and columns on such Annual Statements are based on the formats promulgated by
the NAIC for 2005 Annual Statements for the applicable type of insurance
company. If such format is changed in future years so that different information
is contained in such items or they no longer exist, it is understood that the
reference is to information consistent with that recorded in the referenced item
in the 2005 Annual Statement of the applicable Insurance Subsidiary.

“Applicable Percentage” means, at any time from and after the Restatement
Closing Date, the applicable percentage (i) to be added to the LIBOR Rate for
purposes of determining the Adjusted LIBOR Rate and (ii) to be used in
calculating the facility fee payable pursuant to Section 2.9(a), in each case as
determined under the following matrix with reference to the Parent’s
non-credit-enhanced, senior unsecured long-term debt rating (the “Debt Rating”)
by Moody’s or Standard & Poor’s (in each case based upon the higher of the two
ratings):

 

Level

   Parent
Standard &
Poor’s
Rating    Parent
Moody’s
Rating    Facility
Fee     Applicable
Percentage
(Facility usage
£ 50%)     Applicable
Percentage
(Facility usage
> 50%)  

I

   > = A-    > = A3    0.08 %   0.27 %   0.37 %

II

   > = BBB+    > = Baa1    0.10 %   0.40 %   0.50 %

III

   > = BBB    > = Baa2    0.125 %   0.525 %   0.625 %

IV

   > = BBB-    > = Baa3    0.175 %   0.675 %   0.775 %

V

   < BBB-    < Baa3    0.25 %   0.85 %   0.95 %

For purposes of the foregoing, (i) if at any time the difference between the
Debt Rating by Moody’s and Standard & Poor’s is more than one rating grade, the
rating one level above the lower rating will apply, (ii) if either Moody’s or
Standard & Poor’s shall not have in effect a Debt Rating, then the Applicable
Percentage shall be based upon the remaining rating, and (iii) each change in
the Applicable Percentage shall be effective as of the date the applicable
rating agency first publicly announces any change in its Debt Rating; provided,
however, that, notwithstanding the foregoing or anything else herein to the
contrary, if at any time the Debt Rating is not available from either Moody’s or
Standard & Poor’s, at all times from and including the date on which such Debt
Rating is not available to the date on which either Moody’s or Standard & Poor’s
shall make publicly available such Debt Rating, each Applicable Percentage shall
be determined in accordance with Level V of the above matrix.

“Approved Fund” means any Fund that is administered or managed by (i) a Lender,
(ii) an Affiliate of a Lender, or (iii) a Person (or an Affiliate of a Person)
that administers or manages a Lender.

“Arranger” means Wachovia Capital Markets, LLC and its successors.

 

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“Asset Disposition” means any sale, assignment, lease, conveyance, transfer or
other disposition by any Borrower or a Subsidiary thereof (whether in one or a
series of transactions) of all or any of its assets, business or other
properties (including Capital Stock of Subsidiaries, accounts receivable and
other financial assets), other than (i) any Asset Disposition permitted under
Sections 7.2(b)(i), 7.2(b)(v) (but only to the extent aggregate Net Cash
Proceeds of such dispositions are less than $35,000,000), 7.2(b)(vi) or 7.2(c),
(ii) any Casualty Event, (iii) any disposition in the ordinary course of
business of fixed or capital assets which are obsolete or worn out; (iv) the
sale or liquidation of investments made in the ordinary course of business of
the Borrowers and their Subsidiaries substantially as conducted on the
Restatement Closing Date, (v) any disposition by an Insurance Subsidiary if and
to the extent that the proceeds are required to be retained by the Insurance
Subsidiary in question in order to satisfy a regulatory requirement to which it
is subject or to the extent that such retention is in the opinion of any
applicable commissioner of insurance or other regulatory body necessary or
appropriate to maintain the soundness of such insurance Subsidiary whether or
not the opinion of such commissioner of insurance or regulatory body has the
force of law; (vi) any other dispositions for which the aggregate Net Cash
Proceeds do not exceed $100,000,000 in any single fiscal year and (vii) the PXP
Spin-Off.

“Assignment and Assumption” means an Assignment and Assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 11.6(b)), and accepted by the Administrative Agent, in substantially
the form of Exhibit D or any other form approved by the Administrative Agent.

“Authorized Officer” means, with respect to any action specified herein to be
taken by or on behalf of a Borrower, any officer of such Borrower duly
authorized by resolution of its board of directors or other governing body to
take such action on its behalf, and whose signature and incumbency shall have
been certified to the Administrative Agent by the secretary or an assistant
secretary of such Borrower.

“Bankruptcy Code” means 11 U.S.C. §§ 101 et seq., as amended from time to time,
and any successor statute.

“Bankruptcy Event” means the occurrence of an Event of Default pursuant to
Section 9.1(f) or Section 9.1(g).

“Base Rate” means the higher of (i) the per annum interest rate publicly
announced from time to time by Wachovia in Charlotte, North Carolina, to be its
prime rate (which may not necessarily be its lowest or best lending rate), as
adjusted to conform to changes as of the opening of business on the date of any
such change in such prime rate, and (ii) the Federal Funds Rate plus 0.5% per
annum, as adjusted to conform to changes as of the opening of business on the
date of any such change in the Federal Funds Rate.

“Base Rate Loan” means, at any time, any Loan that bears interest at such time
at the Base Rate.

“Borrower” and “Borrowers” have the meaning given to such term in the
introductory paragraph hereof.

 

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“Borrowing” means the incurrence by a Borrower (including as a result of
conversions and continuations of outstanding Loans pursuant to Section 2.11) on
a single date of a Loan of a single Type and, in the case of LIBOR Loans, as to
which a single Interest Period is in effect.

“Borrowing Date” means, with respect to any Borrowing, the date upon which such
Borrowing is made.

“Business Day” means (i) any day other than a Saturday or Sunday, a legal
holiday or a day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to be closed and (ii) in
respect of any determination relevant to a LIBOR Loan, any such day that is also
a day on which trading in Dollar deposits is conducted by banks in London,
England in the London interbank Eurodollar market.

“Capital Lease” means, with respect to any Person, any lease of property
(whether real, personal or mixed) by such Person as lessee that is or is
required to be, in accordance with GAAP, recorded as a capital lease on such
Person’s balance sheet.

“Capital Stock” means (i) with respect to any Person that is a corporation, any
and all shares, interests or equivalents in capital stock (whether voting or
nonvoting, and whether common or preferred) of such corporation, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership, limited liability company or other equity interests of such Person;
and in each case, any and all warrants, rights or options to purchase any of the
foregoing.

“Cash Equivalents” means (i) securities issued or unconditionally guaranteed or
insured by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within one year from the date of acquisition, (ii) commercial paper
issued by any Person organized under the laws of the United States of America,
maturing within 180 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by
Standard & Poor’s Ratings Services or at least P-1 or the equivalent thereof by
Moody’s Investors Service, Inc., (iii) time deposits and certificates of deposit
maturing within 180 days from the date of issuance and issued by a bank or trust
company organized under the laws of the United States of America or any state
thereof (y) that has combined capital and surplus of at least $500,000,000 or
(z) that has (or is a subsidiary of a bank holding company that has) a long-term
unsecured debt rating of at least A or the equivalent thereof by Standard &
Poor’s Ratings Services or at least A2 or the equivalent thereof by Moody’s
Investors Service, Inc., (iv) repurchase obligations with a term not exceeding
30 days with respect to underlying securities of the types described in
clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above, and (v) money market funds at
least 95% of the assets of which are continuously invested in securities of the
foregoing types.

“Casualty Event” means, with respect to any property (including any interest in
property) of any Borrower or its Subsidiaries, any loss of, damage to, or
condemnation or other taking of, such property for which such Borrower or
Subsidiary receives insurance proceeds, proceeds of a condemnation award or
other compensation.

 

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“CDO’s” means all collateralized debt obligations issued by an SPE the assets of
which are managed by the Borrowers or their Subsidiaries or, in the context of
any Acquisition, by the target of such Acquisition, which debt obligations are
non-recourse to the Borrowers and their Subsidiaries, or such Acquisition
target, (other than any SPE) regardless of whether or not such CDO’s are
reported or reflected on the consolidated balance sheets and other financial
statements of the Borrowers from time to time.

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

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute, and all rules and regulations from time to time
promulgated thereunder.

“Commitment” means, with respect to any Lender at any time, the commitment of
such Lender to make Loans in an aggregate principal amount at any time
outstanding up to the amount set forth opposite such Lender’s name on
Schedule 1.1(a) under the caption “Commitment” or, if such Lender has entered
into one or more Assignment and Assumptions, the amount set forth for such
Lender at such time in the Register maintained by the Administrative Agent
pursuant to Section 11.6(c) as such Lender’s “Commitment,” in either case, as
such amount may be reduced at or prior to such time pursuant to the terms
hereof.

“Commitment Increase” has the meaning given to such term in Section 2.20(a).

“Commitment Increase Date” has the meaning given to such term in
Section 2.20(c).

“Company Action Level” means 200% of the Authorized Control Level Risk-Based
Capital of PLIC. The Authorized Control Level Risk-Based Capital of PLIC shall
be computed in the manner from time to time prescribed by the Insurance
Department of the State of New York for inclusion in the Annual Statement of
PLIC to such Department. Such Authorized Control Level Risk-Based Capital
currently appears on page 23 of such statement in column 1, line 30.

“Compliance Certificate” means a fully completed and duly executed certificate
in the form of Exhibit C.

“Consolidated Indebtedness” means, at any time, the aggregate (without
duplication) of all Indebtedness (whether or not reflected on the Parent’s or
any Subsidiary’s balance sheet) of the Parent and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that any Indebtedness
(i) incurred in connection with a transaction of the type described in
Section 7.2(c)(iii), (ii) issued by an SPE and which is non-recourse to the
Borrowers and their Subsidiaries (other than the SPE) or (iii) consisting of the
net termination obligations under any Swap Contracts, in any such case, shall be
excluded from Consolidated Indebtedness.

 

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“Consolidated Net Income” means, for any period, net income (or loss) for the
Parent and its Subsidiaries for such period and as reflected on the consolidated
financial statements of the Parent and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

“Consolidated Net Worth” means, at any time, the consolidated shareholders’
equity of the Parent and its Subsidiaries determined in accordance with GAAP and
as reflected on the consolidated financial statements of the Parent and its
Subsidiaries; provided that the accounting effect of any CDO’s resulting from
the application of accounting standard FIN 46-R (Consolidation of Variable
Interest Entities) shall be excluded in calculating Consolidated Net Worth.

“Contingent Purchase Price Obligations” means any earnout obligations or similar
deferred or contingent purchase price obligations of the Parent or any of its
Subsidiaries incurred or created in connection with an Acquisition other than
those related to the Philadelphia Financial Group.

“Control” means, with respect to any Person, (i) the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise, or (ii) the beneficial ownership of securities or other
ownership interests of such Person having 10% or more of the combined voting
power of the then outstanding securities or other ownership interests of such
Person ordinarily (and apart from rights accruing under special circumstances)
having the right to vote in the election of directors or other governing body of
such Person; and the terms “Controlled” and “Controlling” have correlative
meanings.

“Credit Documents” means this Agreement, the Notes, the Fee Letter and all other
agreements, instruments, documents and certificates now or hereafter executed
and delivered to the Administrative Agent or any Lender by or on behalf of any
Borrower or any Subsidiary thereof with respect to this Agreement, in each case
as amended, modified, supplemented or restated from time to time.

“Credit Exposure” means, with respect to any Lender at any time, the sum of the
aggregate principal amount of all Loans made by such Lender that are outstanding
at such time.

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

“Defaulting Lender” means any Lender that (i) has refused to fund, or otherwise
defaulted in the funding of, its ratable share of any Borrowing requested and
permitted to be made hereunder, (ii) has failed to pay to the Administrative
Agent or any Lender when due an amount owed by such Lender pursuant to the terms
of this Credit Agreement, unless such amount is subject to a good faith dispute,
or (iii) has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar official, and such
refusal has not been withdrawn or such default has not been cured within three
Business Days.

“Disqualified Capital Stock” means, with respect to any Person, any Capital
Stock of such Person that, by its terms (or by the terms of any security into
which it is convertible or for

 

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which it is exchangeable), or upon the happening of any event or otherwise,
(i) matures or is mandatorily redeemable or subject to any mandatory repurchase
requirement, pursuant to a sinking fund obligation or otherwise, (ii) is
redeemable or subject to any mandatory repurchase requirement at the sole option
of the holder thereof, or (iii) is convertible into or exchangeable for (whether
at the option of the issuer or the holder thereof) (y) debt securities or
(z) any Capital Stock referred to in (i) or (ii) above, in each case under (i),
(ii) or (iii) above at any time on or prior to the first anniversary of the
Maturity Date; provided, however, that only the portion of Capital Stock that so
matures or is mandatorily redeemable, is so redeemable at the option of the
holder thereof, or is so convertible or exchangeable on or prior to such date
shall be deemed to be Disqualified Capital Stock.

“Dollars” or “$” means dollars of the United States of America.

“Environmental Claims” means any and all administrative, regulatory or judicial
actions, suits, written notices of noncompliance or violation, investigations or
proceedings (collectively, “Claims”) relating in any way to any actual or
alleged violation of or liability under any Environmental Law by any borrower or
any of its Subsidiaries in respect of the conduct of their business or the
ownership and/or operation of their respective properties, including, without
limitation, (i) any and all Claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from any alleged injury or threat of injury to human
health or the environment arising from exposure to, or the release or threatened
release of, any Hazardous Substances.

“Environmental Laws” means any and all federal, state and local laws, statutes,
ordinances, rules, regulations, permits, licenses, approvals, rules of common
law and orders of courts or Governmental Authorities, relating to the protection
of human health, occupational safety with respect to exposure to Hazardous
Substances, or the environment, now or hereafter in effect, and in each case as
amended from time to time, including, without limitation, requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Substances.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute, and all rules and regulations from
time to time promulgated thereunder.

“ERISA Affiliate” means any Person (including any trade or business, whether or
not incorporated) deemed to be under “common control” with, or a member of the
same “controlled group” as, the Borrowers or any of their Subsidiaries, within
the meaning of Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of
ERISA.

“ERISA Event” means any of the following with respect to a Plan or Multiemployer
Plan, as applicable: (i) a Reportable Event, (ii) a complete or partial
withdrawal by any Borrower or any ERISA Affiliate from a Multiemployer Plan that
results in liability under Section 4201 or 4204 of ERISA, or the receipt by any
Borrower or any ERISA Affiliate of notice

 

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from a Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA, (iii) the distribution by any Borrower or any
ERISA Affiliate under Section 4041 or 4041A of ERISA of a notice of intent to
terminate any Plan or the taking of any action to terminate any Plan, (iv) the
commencement of proceedings by the PBGC under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by any Borrower or any ERISA Affiliate of a notice from any
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan, (v) the institution of a proceeding by any fiduciary of
any Multiemployer Plan against any Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which is not dismissed within 30 days, (vi) the imposition
upon any Borrower or any ERISA Affiliate of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, or the imposition or threatened imposition of any Lien upon any assets of
any Borrower or any ERISA Affiliate as a result of any alleged failure to comply
with the Code or ERISA in respect of any Plan, (vii) the engaging in or
otherwise becoming liable for a nonexempt Prohibited Transaction by any Borrower
or any ERISA Affiliate, or a violation of the applicable requirements of
Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a)
of the Code by any fiduciary of any Plan for which any Borrower or any of their
ERISA Affiliates may be directly or indirectly liable, (viii) the occurrence
with respect to any Plan of any “accumulated funding deficiency” (within the
meaning of Section 302 of ERISA and Section 412 of the Code), whether or not
waived, or (ix) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss
of tax-exempt status of the trust of which such Plan is a part if any Borrower
or an ERISA Affiliate fails to timely provide security to such Plan in
accordance with the provisions of such sections.

“Event of Default” has the meaning given to such term in Section 9.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and any successor statute, and all rules and regulations from time to
time promulgated thereunder.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of any Borrowers hereunder, (i) taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable Lending Office
is located, (ii) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which any Borrower is located
and (iii) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrowers under Section 2.19(a)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new Lending Office) or is
attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 2.17(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrowers with respect to such withholding tax pursuant to
Section 2.17(a).

 

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“Existing Loans” has the meaning given to such term in Section 2.20(d).

“Federal Funds Rate” means, for any period, a fluctuating per annum interest
rate (rounded upwards, if necessary, to the nearest 1/100 of one percentage
point) equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Administrative Agent.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any successor thereto.

“Fee Letter” means the letter from the Administrative Agent and the Arranger to
the Borrowers, dated May 2, 2006, relating to certain fees payable by the
Borrowers in respect of the transactions contemplated by this Agreement, as
amended, modified, restated or supplemented from time to time.

“Financial Officer” means, with respect to each Borrower, the chief financial
officer, vice president - finance, principal accounting officer or treasurer of
such Borrower.

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

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

“GAAP” means generally accepted accounting principles in the United States of
America, as set forth in the statements, opinions and pronouncements of the
Accounting Principles Board, the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board, consistently applied
and maintained, as in effect from time to time (subject to the provisions of
Section 1.2).

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

“Guaranty Obligation” means, with respect to any Person, any direct or indirect
liability of such Person with respect to any Indebtedness, liability or other
obligation (the “primary obligation”) of another Person (the “primary obligor”),
whether or not contingent, (i) to

 

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purchase, repurchase or otherwise acquire such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
provide funds (x) for the payment or discharge of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor (including, without
limitation,, keep well agreements, maintenance agreements, comfort letters or
similar agreements or arrangements), (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor in respect thereof to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss or failure or inability to
perform in respect thereof; provided, however, that, with respect to the
Borrowers and their Subsidiaries, the term Guaranty Obligation shall not
include endorsements for collection or deposit in the ordinary course of
business. The amount of any Guaranty Obligation of any guaranteeing Person
hereunder shall be deemed to be the lower of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made and (b) the maximum amount for which such
guaranteeing Person may be liable pursuant to the terms of the instrument
embodying such Guaranty Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing Person may be liable are not stated
or determinable, in which case the amount of such Guaranty Obligation shall be
such guaranteeing Person’s maximum reasonably anticipated liability in respect
thereof as determined by such guaranteeing Person in good faith.

“Hazardous Substance” means any substance or material meeting any one or more of
the following criteria: (i) it is or contains a substance designated as a
hazardous waste, hazardous substance, hazardous material, pollutant, contaminant
or toxic substance under any Environmental Law, (ii) it is toxic, explosive,
corrosive, ignitable, infectious, radioactive, mutagenic or otherwise hazardous
to human health or the environment and is or becomes regulated by any
Governmental Authority, (iii) its presence may require investigation or response
under any Environmental Law, (iv) it constitutes a nuisance, trespass or health
or safety hazard to Persons or neighboring properties, or (v) it is or contains,
without limiting the foregoing, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.

“Increasing Lender” has the meaning given to such term in Section 2.20(a).

“Indebtedness” means, with respect to any Person, without duplication, (i) all
indebtedness for borrowed money; (ii) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary terms but
including Contingent Purchase Price Obligations as determined in good faith by
the Borrowers); (iii) all non-contingent reimbursement or payment obligations
with respect to Surety Instruments to the extent such Surety Instruments support
payment of Indebtedness; (iv) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of property, assets or businesses; (v) all
indebtedness created arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the Person (even though the rights and remedies

 

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of the seller or bank under such agreement in the event of default are limited
to repossession or sale of such property); (vi) all obligations with respect to
Capital Leases; (vii) all monetary obligations of such Person under a so-called
synthetic or tax retention lease, or any other agreement for the use or
possession of property creating obligations which do not appear on the balance
sheet of such Person but which, upon the insolvency or bankruptcy of such
Person, would be characterized as Indebtedness of such Person (without regard to
accounting treatment); (viii) all net termination obligations with respect to
Swap Contracts; (ix) all Disqualified Capital Stock issued by such Person, with
the amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price; (x) all indebtedness referred to in clauses
(i) through (ix) above (A) of any partnership or unincorporated Joint Venture in
which such Person is a general partner or joint venturer to the extent such
Person is liable therefor or (B) secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness; and (xi) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses
(i) through (x) above; provided that any obligations reflecting or arising from
any CDO’s shall not be considered Indebtedness.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Insurance Regulatory Authority” means, with respect to the Parent, PLIC or any
Insurance Subsidiary, the insurance department or similar Governmental Authority
charged with regulating insurance companies or insurance holding companies, in
its jurisdiction of domicile and, to the extent that it has regulatory authority
over such Person, in each other jurisdiction in which such Person conducts
business or is licensed to conduct business.

“Insurance Subsidiary” means any direct or indirect Subsidiary of the Parent the
ability of which to pay dividends is regulated by an Insurance Regulatory
Authority or that is otherwise required to be regulated thereby in accordance
with the applicable Requirements of Law of its jurisdiction of domicile.

“Intellectual Property” means (i) all inventions (whether or not patentable and
whether or not reduced to practice), all improvements thereto, and all patents,
patent applications, and patent disclosures, together with all reissues,
continuations, continuations-in-part, divisions, revisions, extensions, and
reexaminations thereof, (ii) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (iii) all copyrightable works and all copyrights (registered and
unregistered), (iv) all trade secrets and confidential information (including,
without limitation, financial, business and marketing plans and customer and
supplier lists and related information), (v) all computer software and software
systems (including, without limitation, data, databases and related
documentation), (vi) all Internet web sites and domain names, (vii) all
technology, know-how, processes and other proprietary rights, and (viii) all
licenses or other agreements to or from third parties regarding any of the
foregoing.

“Interest Period” has the meaning given to such term in Section 2.10.

 

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“Investments” has the meaning given to such term in Section 7.4.

“Joint Venture” means a single-purpose corporation, partnership, joint venture
or other similar legal arrangement (whether created by contract or conducted
through a separate legal entity), excluding any such entity that qualifies as a
Subsidiary, now or hereafter formed by any Borrower or a Subsidiary thereof with
another Person in order to conduct a common venture or enterprise with such
Person; provided that, for the avoidance of doubt, an investment limited
partnership or similar arrangement between the Borrowers and their Subsidiaries
and one or more other Persons such as a private equity fund, hedge fund or like
investment vehicle or any similar kind of venture capital investment shall not
be a Joint Venture where the Investment by the Borrowers and their Subsidiaries
does not include material management or operational control and is being made in
the ordinary course of business of the Borrowers and their Subsidiaries.

“Lender” means each Person signatory hereto as a “Lender” and each other Person
that becomes a “Lender” hereunder pursuant to Section 2.20 or Section 11.6, and
their respective successors and assigns.

“Lending Office” means, with respect to any Lender, the office of such Lender
designated as such in such Lender’s Administrative Questionnaire or in
connection with an Assignment and Assumption, or such other office as may be
otherwise designated in writing from time to time by such Lender to the
Borrowers and the Administrative Agent. A Lender may designate separate Lending
Offices as provided in the foregoing sentence for the purposes of making or
maintaining different Types of Loans, and, with respect to LIBOR Loans, such
office may be a domestic or foreign branch or Affiliate of such Lender.

“LIBOR Loan” means, at any time, any Loan that bears interest at such time at
the applicable Adjusted LIBOR Rate.

“LIBOR Rate” means, with respect to each LIBOR Loan comprising part of the same
Borrowing for any Interest Period, an interest rate per annum obtained by
dividing (i) (y) the rate of interest (rounded upward, if necessary, to the
nearest 1/16 of one percentage point) appearing on Telerate Page 3750 (or any
successor page) or (z) if no such rate is available, the rate of interest
determined by the Administrative Agent to be the rate or the arithmetic mean of
rates (rounded upward, if necessary, to the nearest 1/16 of one percentage
point) at which Dollar deposits in immediately available funds are offered to
first-tier banks in the London interbank Eurodollar market, in each case under
(y) and (z) above at approximately 11:00 a.m., London time, two Business Days
prior to the first day of such Interest Period for a period substantially equal
to such Interest Period and in an amount substantially equal to the amount of
Wachovia’s LIBOR Loan comprising part of such Borrowing, by (ii) the amount
equal to 1.00 minus the Reserve Requirement (expressed as a decimal) for such
Interest Period.

“Lien” means any mortgage, pledge, hypothecation, assignment, security interest,
lien (statutory or otherwise), charge or other encumbrance of any nature,
whether voluntary or involuntary, including, without limitation, the interest of
any vendor or lessor under any conditional sale agreement, title retention
agreement, Capital Lease or any other lease or arrangement having substantially
the same effect as any of the foregoing.

 

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“Loan” or “Loans” has the meaning given to such term in Section 2.1.

“Margin Stock” has the meaning given to such term in Regulation U.

“Material Adverse Effect” means a material adverse effect upon (A) the business,
assets, properties, liabilities (actual or contingent), operations, condition
(financial or otherwise) or prospects of the Parent and its Subsidiaries, taken
as a whole, (B) the ability of any Borrower or a Subsidiary thereof to perform
its obligations under this Agreement or any of the other Credit Documents to
which it is a party or (C) the legality, validity or enforceability of this
Agreement or any of the other Credit Documents or the rights and remedies of the
Administrative Agent and the Lenders hereunder and thereunder. The PXP Spin-Off
shall not be deemed to constitute or cause a Material Adverse Effect.

“Maturity Date” means June 6, 2009.

“Moody’s” means Moody’s Investors Service, Inc., and its successors and assigns.

“Multiemployer Plan” means any “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate makes,
is making or is obligated to make contributions or has made or been obligated to
make contributions.

“Net Cash Proceeds” means, in the case of any Asset Disposition or Casualty
Event, the aggregate cash proceeds received by any Borrower or a Subsidiary
thereof in respect thereof, less (i) reasonable fees and out-of-pocket expenses
payable by the Parent or any of its Subsidiaries in connection therewith,
(ii) taxes paid or payable as a result thereof and (iii) any amount of proceeds
retained in escrow or by another party to assure performance of the transaction
(including debt service reserve funds), it being understood that the term “Net
Cash Proceeds” shall include, as and when received, any cash released from
escrow or other restrictions under clause (iii) or received upon the sale or
other disposition of any non-cash consideration received by any Borrower or a
Subsidiary thereof in respect of any Asset Disposition.

“Notes” means, with respect to any Lender requesting the same, the promissory
notes of the Borrowers in favor of such Lender evidencing the Loans made by such
Lender pursuant to Section 2.1, in substantially the form of Exhibit A, together
with any amendments, modifications and supplements thereto, substitutions
therefor and restatements thereof.

“Notice of Borrowing” has the meaning given to such term in Section 2.2(b).

“Notice of Conversion/Continuation” has the meaning given to such term in
Section 2.11(b).

“Obligations” means, with respect to any Borrower, all principal of and interest
(including interest accruing after the filing of a petition or commencement of a
case by or with respect to such Borrower seeking relief under any applicable
federal and state laws pertaining to bankruptcy, reorganization, arrangement,
moratorium, readjustment of debts, dissolution, liquidation or other debtor
relief, specifically including, without limitation, the Bankruptcy Code and any
fraudulent transfer and fraudulent conveyance laws, whether or not the claim for
such interest is allowed in such proceeding) on the Loans and all fees,
expenses, indemnities and other

 

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obligations owing, due or payable at any time by such Borrower to the
Administrative Agent, any Lender or any other Person entitled thereto, under
this Agreement or any of the other Credit Documents, and all payment and other
obligations owing or payable at any time by such Borrower to any of the
foregoing, in each case whether direct or indirect, joint or several, absolute
or contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, and whether existing by contract, operation of law or otherwise.

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control, and any successor thereto.

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

“Parent” has the meaning given to such term in the introductory paragraph
hereof.

“Participant” has the meaning given to such term in Section 11.6(d).

“PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT Act
of 2001), as amended from time to time, and any successor statute, and all rules
and regulations from time to time promulgated thereunder.

“Payment Office” means the office of the Administrative Agent designated on
Schedule 1.1(a) under the heading “Instructions for wire transfers to the
Administrative Agent,” or such other office as the Administrative Agent may
designate to the Lenders and the Borrowers for such purpose from time to time.

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

“Permitted Acquisition” has the meaning given to such term in Section 7.4(v).

“Permitted Joint Venture” has the meaning given to such term in Section 7.4(vi).

“Permitted Liens” has the meaning given to such term in Section 7.1.

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

“Plan” means any “employee pension benefit plan” within the meaning of
Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA
(other than a Multiemployer Plan) and to which any Borrower or any ERISA
Affiliate may have any liability.

“Prior Credit Agreement” has the meaning given to such term in the recitals
hereof.

 

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“Prohibited Transaction” means any transaction described in (i) Section 406 of
ERISA that is not exempt by reason of Section 408 of ERISA or by reason of a
Department of Labor prohibited transaction individual or class exemption or
(ii) Section 4975(c) of the Code that is not exempt by reason of
Section 4975(c)(2) or 4975(d) of the Code.

“PXP” has the meaning given to such term in the recitals hereof.

“PXP Spin-Off” means the spin-off by the Parent to its shareholders of PXP in a
transaction substantially as announced by the Parent on February 7, 2008, which
transaction is expected to occur in the third calendar quarter of 2008.

“Reference Period” with respect to any date of determination, means (except as
may be otherwise expressly provided herein) the period of 12 consecutive fiscal
months of the Borrowers immediately preceding such date or, if such date is the
last day of a fiscal quarter, the period of four consecutive fiscal quarters
ending on such date.

“Register” has the meaning given to such term in Section 11.6(c).

“Regulations D, T, U and X” means Regulations D, T, U and X, respectively, of
the Federal Reserve Board, and any successor regulations.

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

“Reportable Event” means, with respect to any Plan, (i) any “reportable event”
within the meaning of Section 4043(c) of ERISA for which the 30-day notice under
Section 4043(a) of ERISA has not been waived by the PBGC (including, without
limitation, any failure to meet the minimum funding standard of, or timely make
any required installment under, Section 412 of the Code or Section 302 of ERISA,
regardless of the issuance of any waivers in accordance with Section 412(d) of
the Code), (ii) any such “reportable event” subject to advance notice to the
PBGC under Section 4043(b)(3) of ERISA, (iii) any application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Code, and (iv) a cessation of operations described in Section 4062(e) of ERISA.

“Required Lenders” means, at any time, the Lenders holding outstanding Loans and
Unutilized Commitments (or, after the termination of the Commitments,
outstanding Loans) representing at least 51% of the aggregate, at such time, of
all outstanding Loans and Unutilized Commitments (or, after the termination of
the Commitments, the aggregate at such time of all outstanding Loans).

“Requirement of Law” means, with respect to any Person, the charter, articles or
certificate of organization or incorporation and bylaws or other organizational
or governing documents of such Person, and any statute, law, treaty, rule,
regulation, order, decree, writ, injunction or determination of any arbitrator
or court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject or otherwise pertaining to any or all of the transactions
contemplated by this Agreement and the other Credit Documents.

 

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“Reserve Requirement” means, with respect to any Interest Period, the reserve
percentage (expressed as a decimal and rounded upwards, if necessary, to the
next higher 1/100th of 1%) in effect from time to time during such Interest
Period, as provided by the Federal Reserve Board, applied for determining the
maximum reserve requirements (including, without limitation, basic,
supplemental, marginal and emergency reserves) applicable to Wachovia under
Regulation D with respect to “Eurocurrency liabilities” within the meaning of
Regulation D, or under any similar or successor regulation with respect to
Eurocurrency liabilities or Eurocurrency funding.

“Responsible Officer” means, with respect to any Borrower, the president, the
chief executive officer, the chief financial officer, any executive officer, or
any other Financial Officer of such Borrower, and any other officer or similar
official thereof responsible for the administration of the obligations of such
Borrower in respect of this Agreement or any other Credit Document.

“Restatement Closing Date” means the first date upon which each of the
conditions set forth in Section 3.1 shall have been satisfied or waived in
accordance with the terms of this Agreement.

“Risk Based Capital Ratio” means, as of any time the same is to be determined,
the ratio of adjusted capital of PLIC to the Company Action Level of PLIC.
Adjusted capital, for the purpose of this definition, shall be computed in the
manner from time to time prescribed by the Insurance Department of the State of
New York as total adjusted capital for inclusion in the Annual Statement of PLIC
to such department (currently appearing on page 23 of such annual statement in
column 1, line 29 and currently consisting of capital and surplus, the asset
valuation reserve of PLIC and 50% of PLIC’s dividend liability).

“Sanctioned Country” means a country subject to a sanctions program identified
on the list maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/, or as otherwise published from
time to time.

“Sanctioned Person” means (i) a Person named on the list of Specially Designated
Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/-offices/enforcement/ofac/sdn/index.shtml, or as otherwise
published from time to time, or (ii) (A) an agency of the government of a
Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or
(C) a Person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.

“SAP” means, with respect to PLIC and any other Insurance Subsidiary, the
statutory accounting practices prescribed or permitted by the relevant Insurance
Regulatory Authority of its jurisdiction of domicile, consistently applied and
maintained, as in effect from time to time (subject to the provisions of
Section 1.2).

“SPE” means any special purpose entity that (i) is a Subsidiary of a Borrower or
(ii) the assets of which are managed by the Borrowers or their Subsidiaries and,
in either case, which is established for the limited purposes of (x) issuing
CDO’s, or other securities, interests or obligations in a securitization,
monetization or other structured transaction, (y) holding assets to
collateralize such CDO’s, securities, interests or obligations, and/or
(z) taking other actions reasonably related to the foregoing.

 

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“Standard & Poor’s” means Standard & Poor’s Ratings Services, a division of The
McGraw Hill Companies, Inc. and its successors and assigns.

“Subsequent Borrowings” has the meaning given to such term in Section 2.20(d).

“Subsidiary” means, with respect to any Person, any corporation or other Person
of which more than 50% of the outstanding Capital Stock having ordinary voting
power to elect a majority of the board of directors, board of managers or other
governing body of such Person, is at the time, directly or indirectly, owned or
controlled by such Person and one or more of its other Subsidiaries or a
combination thereof (irrespective of whether, at the time, securities of any
other class or classes of any such corporation or other Person shall or might
have voting power by reason of the happening of any contingency). When used
without reference to a parent entity, the term “Subsidiary” shall be deemed to
refer to a Subsidiary of any Borrower.

“Surety Instrument” means all letters of credit (including standby and
commercial), banker’s acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.

“Swap Contract” means any agreement (including any master agreement and any
agreement, whether or not in writing, relating to any single transaction) that
is an interest rate swap agreement, basis swap, forward rate agreement,
commodity swap, commodity option, equity or equity index swap or option, bond
option, interest rate option, forward foreign exchange agreement, rate cap,
collar or floor agreement, currency swap agreement, cross currency rate swap
agreement, swaption, currency option or any other, similar agreement (including
any option to enter into any of the foregoing).

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

“Termination Date” means the Maturity Date or such earlier date of termination
of the Commitments pursuant to Section 2.5, Section 2.6(e) or Section 9.2.

“Total Capitalization” means, as of any date of determination, the sum of
(i) Consolidated Net Worth as of such date and (ii) Consolidated Indebtedness as
of such date.

“Type” has the meaning given to such term in Section 2.2(a).

“Unutilized Commitment” means, with respect to any Lender at any time, such
Lender’s Commitment at such time less the aggregate principal amount of all
Loans made by such Lender that are outstanding at such time.

“Wachovia” means Wachovia Bank, National Association, and its successors and
assigns.

 

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1.2 Accounting Terms; GAAP and SAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP or SAP, as the context requires, each as in effect from
time to time; provided that, the covenants set forth in Sections 6.1 through 6.3
and other computations under the Credit Documents will be calculated based upon
relevant accounting principles and risk based capital rules in effect as of
June 6, 2006. Any Borrower may notify the Administrative Agent that the
Borrowers request an amendment to any provision hereof to eliminate or reflect
the effect of any change occurring after the date hereof in GAAP or SAP or the
risk based capital rules, as the case may be, or in the application thereof on
the operation of such provision (or the Administrative Agent may notify the
Borrowers that the Required Lenders request an amendment to any provision hereof
for such purpose), and the parties agree to negotiate in good faith regarding
any such requested amendment.

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

ARTICLE II

AMOUNT AND TERMS OF THE LOANS

2.1 Commitments. Each Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make loans (each, a “Loan,” and collectively,
the “Loans”) to the Borrowers, from time to time on any Business Day during the
period from and including June 6, 2006 to but not including the Termination
Date, in an aggregate principal amount at any time outstanding not exceeding its
Commitment, provided that no Borrowing of Loans shall be made if, immediately
after giving effect thereto, (y) the Credit Exposure of any Lender would exceed
its Commitment at such time or (z) the Aggregate Credit Exposure would exceed
the aggregate Commitments at such time. Subject to and on the terms and
conditions of this Agreement, the Borrowers may borrow, repay and reborrow
Loans.

 

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2.2 Borrowings.

(a) The Loans shall, at the option of the applicable Borrower and subject to the
terms and conditions of this Agreement, be either Base Rate Loans or LIBOR Loans
(each, a “Type” of Loan), provided that (i) all Loans comprising the same
Borrowing shall, unless otherwise specifically provided herein, be of the same
Type, and (ii) no LIBOR Loans may be borrowed at any time prior to the third
Business Day after June 6, 2006.

(b) In order to make a Borrowing, the applicable Borrower will give the
Administrative Agent written notice not later than 11:00 a.m., Charlotte time,
three Business Days prior to each Borrowing to be comprised of LIBOR Loans and
on the Business Day of each Borrowing to be comprised of Base Rate Loans;
provided, however, that requests for the Borrowing of Loans to be made on
June 6, 2006 may, at the discretion of the Administrative Agent, be given with
less advance notice than as specified hereinabove. Each such notice (each, a
“Notice of Borrowing”) shall be irrevocable, shall be given in the form of
Exhibit B-1 and shall specify (1) the Borrower to which the Loans are to be
made, (2) the aggregate principal amount and initial Type of the Loans to be
made pursuant to such Borrowing, (3) in the case of a Borrowing of LIBOR Loans,
the initial Interest Period to be applicable thereto, and (4) the requested
Borrowing Date, which shall be a Business Day. Upon its receipt of a Notice of
Borrowing, the Administrative Agent will promptly notify each applicable Lender
of the proposed Borrowing. Notwithstanding anything to the contrary contained
herein:

(i) the aggregate principal amount of each Borrowing comprised of Base Rate
Loans shall not be less than $3,000,000 or, if greater, an integral multiple of
$1,000,000 in excess thereof, and the aggregate principal amount of each
Borrowing comprised of LIBOR Loans shall not be less than $5,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof (or, in each case,
if less, in the amount of the aggregate Commitments less the Aggregate Credit
Exposure);

(ii) if the Borrower shall have failed to designate the Type of Loans comprising
a Borrowing, the Borrower shall be deemed to have requested a Borrowing
comprised of Base Rate Loans; and

(iii) if the Borrower shall have failed to select the duration of the Interest
Period to be applicable to any Borrowing of LIBOR Loans, then the Borrower shall
be deemed to have selected an Interest Period with a duration of one month.

(c) Not later than 1:00 p.m., Charlotte time, on the requested Borrowing Date,
each applicable Lender will make available to the Administrative Agent at the
Payment Office an amount, in Dollars and in immediately available funds, equal
to the amount of the Loan or Loans to be made by such Lender. To the extent such
Lenders have made such amounts available to the Administrative Agent as provided
hereinabove, the Administrative Agent will make the aggregate of such amounts
available to the Borrower in accordance with Section 2.3(a) and in like funds as
received by the Administrative Agent.

 

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2.3 Disbursements; Funding Reliance; Domicile of Loans.

(a) Each Borrower hereby authorizes the Administrative Agent to disburse the
proceeds of each Borrowing in accordance with the terms of any written
instructions from any Authorized Officer of the Borrower, provided that the
Administrative Agent shall not be obligated under any circumstances to forward
amounts to any account not listed in an Account Designation Letter. Each
Borrower may at any time deliver to the Administrative Agent an Account
Designation Letter listing any additional accounts or deleting any accounts
listed in a previous Account Designation Letter.

(b) Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.2 and may, in reliance upon such
assumption, make available to the applicable Borrower a corresponding amount. In
such event, if a Lender has not in fact made its share of the applicable
Borrowing available to the Administrative Agent, then the applicable Lender and
Borrower severally agree to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at (i) in the case of a payment to be
made by such Lender, the greater of the Federal Funds Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation and (ii) in the case of a payment to be made by the
applicable Borrower, the Base Rate. If such Borrower and Lender shall pay such
interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Borrower the amount of such
interest paid by the Borrower for such period. If such Lender pays its share of
the applicable Borrowing to the Administrative Agent, then the amount so paid
shall constitute such Lender’s Loan included in such Borrowing. Any payment by a
Borrower shall be without prejudice to any claim the Borrowers may have against
a Lender that shall have failed to make such payment to the Administrative
Agent.

(c) The obligations of the Lenders hereunder to make Loans and to make payments
pursuant to Section 11.1(c) are several and not joint. The failure of any Lender
to make any Loan or to make any such payment on any date shall not relieve any
other Lender of its corresponding obligation, if any, hereunder to do so on such
date, but no Lender shall be responsible for the failure of any other Lender to
so make its Loan, purchase its participation or to make any such payment
required hereunder.

(d) Each Lender may, at its option, make and maintain any Loan at, to or for the
account of any of its Lending Offices, provided that any exercise of such option
shall not affect the obligation of the applicable Borrower to repay such Loan to
or for the account of such Lender in accordance with the terms of this
Agreement.

2.4 Evidence of Debt; Notes.

(a) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of each Borrower to the applicable
Lending Office of such

 

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Lender resulting from each Loan made by such Lending Office of such Lender from
time to time, including the amounts of principal and interest payable and paid
to such Lending Office of such Lender from time to time under this Agreement.

(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.6(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the Borrower and amount of
each Loan, the Type of each Loan and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due
and payable from each Borrower to each Lender hereunder in respect of each Loan
and (iii) the amount of any sum received by the Administrative Agent hereunder
from the Borrowers in respect of each Loan and each Lender’s share thereof.

(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to Section 2.4(b) (and, if consistent with the entries of the
Administrative Agent, Section 2.4(a)) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrowers therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain such account, such
Register or such subaccount, as applicable, or any error therein, shall not in
any manner affect the obligation of each Borrower to repay (with applicable
interest) the Loans made to such Borrower by such Lender in accordance with the
terms of this Agreement.

(d) The Loans made by each Lender shall, if requested by the applicable Lender
(which request shall be made to the Administrative Agent), be evidenced Notes
appropriately completed in substantially the form of Exhibit A, in each case
executed by a Borrower and payable to the order of such Lender. Each Note shall
be entitled to all of the benefits of this Agreement and the other Credit
Documents and shall be subject to the provisions hereof and thereof.

2.5 Termination and Reduction of Commitments.

(a) The Commitments shall be automatically and permanently terminated on the
Maturity Date, unless sooner terminated pursuant to any other provision of this
Section 2.5, Section 2.6(e) or Section 9.2.

(b) At any time and from time to time after the date hereof, upon not less than
five Business Days’ prior written notice to the Administrative Agent, the
Borrowers may terminate in whole or reduce in part the aggregate Unutilized
Commitments, provided that any such partial reduction shall be in an aggregate
amount of not less than $5,000,000 or, if greater, an integral multiple of
$1,000,000 in excess thereof. The amount of any termination or reduction made
under this Section 2.5(a) may not thereafter be reinstated.

(c) Each reduction of the Commitments pursuant to this Section shall be applied
ratably among the Lenders according to their respective Commitments.

 

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2.6 Mandatory Payments and Prepayments.

(a) Maturity Date. Except to the extent due or paid sooner pursuant to the
provisions of this Agreement, the aggregate outstanding principal of the Loans
shall be due and payable in full on the Maturity Date.

(b) Excess of Commitments. In the event that, at any time, the Aggregate Credit
Exposure shall exceed the aggregate Commitments at such time (after giving
effect to any concurrent termination or reduction thereof), the Borrowers will
immediately prepay the outstanding principal amount of the Loans in the amount
of such excess.

(c) Casualty Events. Not later than 270 days after receipt by any Borrower or a
Subsidiary thereof of any proceeds of insurance, condemnation award or other
compensation in respect of any Casualty Event (or, if earlier, upon its
determination not to repair or replace any property subject to such Casualty
Event or to acquire assets used or useable in the business of the Parent and its
Subsidiaries), the Borrowers will prepay the outstanding principal amount of the
Loans in an amount equal to 100% of the Net Cash Proceeds from such Casualty
Event, less any amounts (A) under $2,500,000 for each occurrence or series of
related occurrences or (B) theretofore applied (or contractually committed to be
applied) to the repair or replacement of property subject to such Casualty Event
or to acquire assets used or useable in the business of the Parent and its
Subsidiaries and will deliver to the Administrative Agent, concurrently with
such prepayment, a certificate signed by a Financial Officer of the Borrowers in
form and substance satisfactory to the Administrative Agent and setting forth
the calculation of such Net Cash Proceeds; provided, however, that,
notwithstanding the foregoing, (i) except as otherwise provided in this
Agreement (including in clause (ii) below) or in any other Credit Document, the
Administrative Agent shall turn over to the Borrowers any such proceeds received
during such 270-day period (unless the Borrowers have, prior to the
Administrative Agent’s receipt of such proceeds, notified the Administrative
Agent of their determination not to repair or replace the property subject to
the applicable Casualty Event or to acquire assets used or useable in the
business of the Borrowers and their Subsidiaries), and (ii) any and all such
proceeds received or held by the Administrative Agent or the Borrowers or any of
their Subsidiaries during the continuance of an Event of Default (regardless of
any proposed or actual use thereof for repair, replacement or reinvestment)
shall be applied to prepay the outstanding principal amount of the Loans; and
provided further that no prepayment shall be required with respect to Net Cash
Proceeds received by an Insurance Subsidiary to the extent that such proceeds
must be retained by such Insurance Subsidiary to satisfy an applicable
Requirement of Law or if such retention is, in the opinion of any applicable
Governmental Authority, necessary or appropriate to maintain the soundness of
such Insurance Subsidiary, whether or not the opinion of such Governmental
Authority has the force of law.

(d) Asset Dispositions. Not later than 180 days after receipt by any Borrower or
a Subsidiary thereof of proceeds in respect of any Asset Disposition (or, if
earlier, upon its determination not to apply such proceeds to the acquisition of
assets used or useable in the business of the Parent and its Subsidiaries), the
Borrowers will prepay the outstanding principal amount of the Loans in an amount
equal to 100% of the Net Cash Proceeds from such Asset Disposition, less any
amounts theretofore applied (or contractually committed to be applied) to
acquire assets used or useable in the business of the Parent and its
Subsidiaries, and will deliver to the Administrative Agent, concurrently with
such prepayment, a certificate signed by a Financial Officer of the Borrowers in
form and substance satisfactory to the Administrative

 

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Agent and setting forth the calculation of such Net Cash Proceeds.
Notwithstanding the foregoing, nothing in this Section 2.6(d) shall be deemed to
permit any Asset Disposition not expressly permitted under Section 7.2 or any
Acquisition, Joint Venture or other use of proceeds otherwise not permitted
under the Credit Documents.

(e) Application of Payments. Each prepayment of the Loans made pursuant to
Section 2.6(b) shall be applied to reduce the outstanding principal amount of
the Loans (and applied to specific Loans in the manner designated by the
Borrowers or, if there is no such designation, in any manner reasonably
determined by the Agent) but without any corresponding permanent reduction of
the Commitments. Each prepayment of the Loans made pursuant to Sections 2.6(c)
and (d) shall be applied to reduce the outstanding principal amount of the Loans
of the Borrower experiencing the Casualty Event or making the Asset Disposition
(and, thereafter, of PLIC if it is not such Borrower) with a corresponding
permanent reduction of the Commitments (and if the outstanding Loans are less
than the amount of the required prepayment, the Commitments shall nevertheless
be reduced by the full amount of the required prepayment). Such prepayments
shall be applied first to prepay all Base Rate Loans, and then to prepay LIBOR
Loans in direct order of Interest Period maturities. Each payment or prepayment
pursuant to the provisions of this Section 2.6 shall be applied ratably among
the Lenders holding the Loans being prepaid, in proportion to the principal
amount held by each. Each payment or prepayment of a LIBOR Loan made pursuant to
the provisions of this Section on a day other than the last day of the Interest
Period applicable thereto shall be made together with all amounts required under
Section 2.18 to be paid as a consequence thereof.

(f) Notice. In the event the Administrative Agent receives a notice of
prepayment, the Administrative Agent will give prompt notice thereof to the
Lenders; provided that if such notice has also been furnished to the Lenders,
the Administrative Agent shall have no obligation to notify the Lenders with
respect thereto.

2.7 Voluntary Prepayments.

(a) At any time and from time to time, the Borrowers shall have the right to
prepay the Loans, in whole or in part, without premium or penalty (except as
provided in clause (iii) below), upon written notice given to the Administrative
Agent not later than 11:00 a.m., Charlotte time, three Business Days prior to
each intended prepayment of LIBOR Loans and one Business Day prior to each
intended prepayment of Base Rate Loans, provided that (i) each partial
prepayment of LIBOR Loans shall be in an aggregate principal amount of not less
than $5,000,000 or, if greater, an integral multiple of $1,000,000 in excess
thereof, and each partial prepayment of Base Rate Loans shall be in an aggregate
principal amount of not less than $3,000,000 or, if greater, an integral
multiple of $1,000,000 in excess thereof, (ii) no partial prepayment of LIBOR
Loans made pursuant to any single Borrowing shall reduce the aggregate
outstanding principal amount of the remaining LIBOR Loans under such Borrowing
to less than $5,000,000 or to any greater amount not an integral multiple of
$1,000,000 in excess thereof, and (iii) unless made together with all amounts
required under Section 2.18 to be paid as a consequence of such prepayment, a
prepayment of a LIBOR Loan may be made only on the last day of the Interest
Period applicable thereto. Each such notice shall specify the proposed date of
such prepayment, the applicable Borrower and the aggregate principal amount and
Type of the Loans to be prepaid (and, in the case of LIBOR Loans, the Interest
Period of the Borrowing

 

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pursuant to which made), and shall be irrevocable and shall bind the applicable
Borrower to make such prepayment on the terms specified therein. Loans prepaid
pursuant to this Section 2.7(a) may be reborrowed, subject to the terms and
conditions of this Agreement. In the event the Administrative Agent receives a
notice of prepayment under this Section, the Administrative Agent will give
prompt notice thereof to the Lenders; provided that if such notice has also been
furnished to the Lenders, the Administrative Agent shall have no obligation to
notify the Lenders with respect thereto.

(b) Each prepayment of the Loans made pursuant to Section 2.7(a) shall be
applied ratably among the Lenders holding the Loans being prepaid, in proportion
to the principal amount held by each.

2.8 Interest.

(a) Interest Rates. Each Borrower will pay interest in respect of the unpaid
principal amount of each of its Loans, from the date of Borrowing thereof until
such principal amount shall be paid in full, (i) at the Base Rate, as in effect
from time to time during such periods as such Loan is a Base Rate Loan, and
(ii) at the Adjusted LIBOR Rate, as in effect from time to time during such
periods as such Loan is a LIBOR Loan.

(b) Default Rate. Upon the occurrence and during the continuance of any Event of
Default by any Borrower in the payment of any principal of or interest on any
Loan, any fees or other amount hereunder when due (whether at maturity, pursuant
to acceleration or otherwise), and, at the election of the Required Lenders,
upon the occurrence and during the continuance of any other Event of Default,
all outstanding principal amounts of the Loans and, to the greatest extent
permitted by law, all interest accrued on the Loans and all other accrued and
outstanding fees and other amounts hereunder, shall bear interest at a rate per
annum equal to the interest rate applicable from time to time thereafter to such
Loans (whether the Base Rate or the Adjusted LIBOR Rate) plus 2% (or, in the
case of interest, fees and other amounts for which no rate is provided
hereunder, at the Base Rate plus 2%), and, in each case, such default interest
shall be payable on demand. To the greatest extent permitted by law, interest
shall continue to accrue after the filing by or against any Borrower of any
petition seeking any relief in bankruptcy or under any law pertaining to
insolvency or debtor relief.

(c) Payment Dates. Accrued (and theretofore unpaid) interest shall be payable as
follows:

(i) in respect of each Base Rate Loan (including any Base Rate Loan or portion
thereof paid or prepaid pursuant to the provisions of Section 2.6, except as
provided herein below), in arrears on the last Business Day of each calendar
quarter, beginning with the first such day to occur after June 6, 2006;
provided, that in the event the Loans are repaid or prepaid in full and the
Commitments have been terminated, then accrued interest in respect of all Base
Rate Loans shall be payable together with such repayment or prepayment on the
date thereof;

(ii) in respect of each LIBOR Loan (including any LIBOR Loan or portion thereof
paid or prepaid pursuant to the provisions of Section 2.6, except as provided

 

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hereinbelow), in arrears (y) on the last Business Day of the Interest Period
applicable thereto (subject to the provisions of Section 2.10(iv)) and (z) in
addition, in the case of a LIBOR Loan with an Interest Period having a duration
of six months or longer, on each date on which interest would have been payable
under clause (y) above had successive Interest Periods of three months’ duration
been applicable to such LIBOR Loan; provided, that in the event all LIBOR Loans
made pursuant to a single Borrowing are repaid or prepaid in full, then accrued
interest in respect of such LIBOR Loans shall be payable together with such
repayment or prepayment on the date thereof; and

(iii) in respect of any Loan, at maturity (whether pursuant to acceleration or
otherwise) and, after maturity, on demand.

(d) Maximum Lawful Rate. Nothing contained in this Agreement or in any other
Credit Document shall be deemed to establish or require the payment of interest
to any Lender at a rate in excess of the maximum rate permitted by applicable
law. If the amount of interest payable for the account of any Lender on any
interest payment date would exceed the maximum amount permitted by applicable
law to be charged by such Lender, the amount of interest payable for its account
on such interest payment date shall be automatically reduced to such maximum
permissible amount. In the event of any such reduction affecting any Lender, if
from time to time thereafter the amount of interest payable for the account of
such Lender on any interest payment date would be less than the maximum amount
permitted by applicable law to be charged by such Lender, then the amount of
interest payable for its account on such subsequent interest payment date shall
be automatically increased to such maximum permissible amount, provided that at
no time shall the aggregate amount by which interest paid for the account of any
Lender has been increased pursuant to this sentence exceed the aggregate amount
by which interest paid for its account has theretofore been reduced pursuant to
the previous sentence.

(e) Notice of Rate Determinations. The Administrative Agent shall promptly
notify the Borrowers and the Lenders upon determining the interest rate for each
Borrowing of LIBOR Loans after its receipt of the relevant Notice of Borrowing
or Notice of Conversion/Continuation, and upon each change in the Base Rate;
provided, however, that the failure of the Administrative Agent to provide the
Borrowers or the Lenders with any such notice shall neither affect any
obligations of the Borrowers or the Lenders hereunder nor result in any
liability on the part of the Administrative Agent to the Borrowers or any
Lender. Each such determination (including each determination of the Reserve
Requirement) shall, absent manifest error, be conclusive and binding on all
parties hereto.

2.9 Fees. The Borrowers agree to pay:

(a) To the Administrative Agent, for the account of each Lender, a facility fee
(the “Facility Fee”) for each calendar quarter (or portion thereof) for the
period from the date of this Agreement to the Termination Date, at the per annum
rate specified in the definition of “Applicable Percentage” for such fee from
time to time during such quarter on such Lender’s ratable share (based on the
proportion that its Commitment bears to the aggregate Commitments) of the
average daily aggregate Commitments, payable in arrears (i) on the last Business
Day of each calendar quarter, beginning with the first such day to occur after
June 6, 2006, and (ii) on the Termination Date;

 

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(b) To the Administrative Agent, for its own account, the annual administrative
fee described in the Fee Letter, on the terms, in the amount and at the times
set forth therein.

2.10 Interest Periods. Concurrently with the giving of a Notice of Borrowing or
Notice of Conversion/Continuation in respect of any Borrowing comprised of Base
Rate Loans to be converted into, or LIBOR Loans to be continued as, LIBOR Loans,
the applicable Borrower shall have the right to elect, pursuant to such notice,
the interest period (each, an “Interest Period”) to be applicable to such LIBOR
Loans, which Interest Period shall, at the option of the Borrowers, be a one,
two, three or six-month period; provided, however, that:

(i) all LIBOR Loans comprising a single Borrowing shall at all times have the
same Interest Period;

(ii) the initial Interest Period for any LIBOR Loan shall commence on the date
of the Borrowing of such LIBOR Loan (including the date of any continuation of,
or conversion into, such LIBOR Loan), and each successive Interest Period
applicable to such LIBOR Loan shall commence on the day on which the next
preceding Interest Period applicable thereto expires;

(iii) LIBOR Loans may not be outstanding under more than eight separate Interest
Periods at any one time (for which purpose Interest Periods shall be deemed to
be separate even if they are coterminous);

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

(v) the Borrowers may not select any Interest Period that expires after the
Maturity Date, with respect to Loans that are to be maintained as LIBOR Loans;

(vi) if any Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month during which such Interest Period would
otherwise expire, such Interest Period shall expire on the last Business Day of
such calendar month; and

(vii) the Borrowers may not select any Interest Period (and consequently, no
LIBOR Loans shall be made) if a Default or Event of Default shall have occurred
and be continuing at the time of such Notice of Borrowing or Notice of
Conversion/Continuation with respect to any Borrowing.

2.11 Conversions and Continuations.

(a) The Borrowers shall have the right, on any Business Day occurring on or
after June 6, 2006, to elect (i) to convert all or a portion of the outstanding
principal amount of any Base Rate Loans into LIBOR Loans, or to convert any
LIBOR Loans the Interest Periods for which end on the same day into Base Rate
Loans, or (ii) upon the expiration of any Interest Period, to continue all or a
portion of the outstanding principal amount of any LIBOR Loans the

 

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Interest Periods for which end on the same day for an additional Interest
Period, provided that (w) any such conversion of LIBOR Loans into Base Rate
Loans shall involve an aggregate principal amount of not less than $3,000,000
or, if greater, an integral multiple of $1,000,000 in excess thereof; any such
conversion of Base Rate Loans into, or continuation of, LIBOR Loans shall
involve an aggregate principal amount of not less than $5,000,000 or, if
greater, an integral multiple of $1,000,000 in excess thereof; and no partial
conversion of LIBOR Loans made pursuant to a single Borrowing shall reduce the
outstanding principal amount of such LIBOR Loans to less than $5,000,000 or to
any greater amount not an integral multiple of $1,000,000 in excess thereof,
(x) except as otherwise provided in Section 2.16(f), LIBOR Loans may be
converted into Base Rate Loans only on the last day of the Interest Period
applicable thereto (and, in any event, if a LIBOR Loan is converted into a Base
Rate Loan on any day other than the last day of the Interest Period applicable
thereto, the applicable Borrower will pay, upon such conversion, all amounts
required under Section 2.18 to be paid as a consequence thereof and (y) no
conversion of Base Rate Loans into LIBOR Loans or continuation of LIBOR Loans
shall be permitted during the continuance of a Default or Event of Default.

(b) The applicable Borrower shall make each such election by giving the
Administrative Agent written notice not later than 11:00 a.m., Charlotte time,
three Business Days prior to the intended effective date of any conversion of
Base Rate Loans into, or continuation of, LIBOR Loans and on the same Business
Day as the intended effective date of any conversion of LIBOR Loans into Base
Rate Loans. Each such notice (each, a “Notice of Conversion/Continuation”) shall
be irrevocable, shall be given in the form of Exhibit B-2 and shall specify
(x) the date of such conversion or continuation (which shall be a Business Day),
(y) in the case of a conversion into, or a continuation of, LIBOR Loans, the
Interest Period to be applicable thereto, and (z) the aggregate amount and Type
of the Loans being converted or continued. Upon the receipt of a Notice of
Conversion/Continuation, the Administrative Agent will promptly notify each
applicable Lender of the proposed conversion or continuation. In the event that
the applicable Borrower shall fail to deliver a Notice of
Conversion/Continuation as provided herein with respect to any outstanding LIBOR
Loans, such LIBOR Loans shall automatically be converted to Base Rate Loans upon
the expiration of the then current Interest Period applicable thereto (unless
repaid pursuant to the terms hereof). In the event the applicable Borrower shall
have failed to select in a Notice of Conversion/Continuation the duration of the
Interest Period to be applicable to any conversion into, or continuation of,
LIBOR Loans, then the Borrower shall be deemed to have selected an Interest
Period with a duration of one month.

2.12 Method of Payments; Computations; Apportionment of Payments.

(a) All payments by the Borrowers hereunder shall be made without setoff,
counterclaim or other defense, in Dollars and in immediately available funds to
the Administrative Agent, for the account of the Lenders entitled to such
payment (except as otherwise expressly provided herein as to payments required
to be made directly to the Lenders) at the Payment Office prior to 12:00 noon,
Charlotte time, on the date payment is due. Any payment made as required
hereinabove, but after 12:00 noon, Charlotte time, shall be deemed to have been
made on the next succeeding Business Day. If any payment falls due on a day that
is not a Business Day, then such due date shall be extended to the next
succeeding Business Day (except that in the case of LIBOR Loans to which the
provisions of Section 2.10(iv) are applicable, such due date shall be the next
preceding Business Day), and such extension of time shall then be included in
the computation of payment of interest, fees or other applicable amounts.

 

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(b) The Administrative Agent will distribute to the Lenders like amounts
relating to payments made to the Administrative Agent for the account of the
Lenders as follows: (i) if the payment is received by 12:00 noon, Charlotte
time, in immediately available funds, the Administrative Agent will make
available to each relevant Lender on the same date, by wire transfer of
immediately available funds, such Lender’s ratable share of such payment (based
on the percentage that the amount of the relevant payment owing to such Lender
bears to the total amount of such payment owing to all of the relevant Lenders),
and (ii) if such payment is received after 12:00 noon, Charlotte time, or in
other than immediately available funds, the Administrative Agent will make
available to each such Lender its ratable share of such payment by wire transfer
of immediately available funds on the next succeeding Business Day (or in the
case of uncollected funds, as soon as practicable after collected). If the
Administrative Agent shall not have made a required distribution to the
appropriate Lenders as required hereinabove after receiving a payment for the
account of such Lenders, the Administrative Agent will pay to each such Lender,
on demand, its ratable share of such payment with interest thereon at the
Federal Funds Rate for each day from the date such amount was required to be
disbursed by the Administrative Agent until the date repaid to such Lender.

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

(d) All computations of interest and fees hereunder (including computations of
the Reserve Requirement) shall be made on the basis of a year consisting of
(i) in the case of interest on Base Rate Loans, 365/366 days, as the case may
be, or (ii) in all other instances, 360 days; and in each case under (i) and
(ii) above, with regard to the actual number of days (including the first day,
but excluding the last day) elapsed.

(e) Notwithstanding any other provision of this Agreement or any other Credit
Document to the contrary, all amounts collected or received by the
Administrative Agent or any Lender after acceleration of the Loans pursuant to
Section 9.2 shall be applied by the Administrative Agent as follows:

(i) first, to the payment of all reasonable out-of-pocket costs and expenses
(including, without limitation, reasonable attorneys’ and consultants’ fees
irrespective of whether such fees are allowed as a claim after the occurrence of
a Bankruptcy Event) of the Administrative Agent in connection with enforcing the
rights of the Lenders under the Credit Documents;

 

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(ii) second, to the payment of any fees owed to the Administrative Agent
hereunder or under any other Credit Document;

(iii) third, to the payment of all reasonable and documented out-of-pocket costs
and expenses (including, without limitation, reasonable attorneys’ and
consultants’ fees irrespective of whether such fees are allowed as a claim after
the occurrence of a Bankruptcy Event) of each of the Lenders in connection with
enforcing its rights under the Credit Documents or otherwise with respect to the
Obligations owing to such Lender;

(iv) fourth, to the payment of all of the Obligations consisting of accrued fees
and interest (including, without limitation, fees incurred and interest accruing
at the then applicable rate after the occurrence of a Bankruptcy Event
irrespective of whether a claim for such fees incurred and interest accruing is
allowed in such proceeding);

(v) fifth, to the payment of the outstanding principal amount of the
Obligations;

(vi) sixth, to the payment of all other Obligations and other obligations that
shall have become due and payable under the Credit Documents or otherwise and
not repaid; and

(vii) seventh, to the payment of the surplus (if any) to whomever may be
lawfully entitled to receive such surplus.

(f) In carrying out the foregoing, (x) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category and all amounts shall be apportioned ratably among the
Lenders in proportion to the amounts of such principal, interest, fees or other
Obligations owed to them respectively pursuant to clauses (iii) through
(vii) above.

2.13 Recovery of Payments.

(a) The Borrowers agree that to the extent the Borrowers make a payment or
payments to or for the account of the Administrative Agent or any Lender, which
payment or payments or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party under any bankruptcy, insolvency or similar
state or federal law, common law or equitable cause (whether as a result of any
demand, settlement, litigation or otherwise), then, to the extent of such
payment or repayment, the Obligation intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been received.

(b) If any amounts distributed by the Administrative Agent to any Lender are
subsequently returned or repaid by the Administrative Agent to the Borrowers,
their respective representatives or successors in interest, or any other Person,
whether by court order, by settlement approved by the Lender in question, or
pursuant to applicable Requirements of Law,

 

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such Lender will, promptly upon receipt of notice thereof from the
Administrative Agent, pay the Administrative Agent such amount. If any such
amounts are recovered by the Administrative Agent from the Borrowers, their
respective representatives or successors in interest or such other Person, the
Administrative Agent will redistribute such amounts to the Lenders on the same
basis as such amounts were originally distributed.

2.14 Use of Proceeds. The proceeds of the Loans shall be used to provide for
working capital and general corporate purposes and in accordance with the terms
and provisions of this Agreement.

2.15 Pro Rata Treatment.

(a) All fundings, continuations and conversions of Loans shall be made by the
Lenders pro rata on the basis of their respective Commitments to provide Loans
(in the case of the funding of Loans pursuant to Section 2.2) or on the basis of
their respective outstanding Loans (in the case of continuations and conversions
of Loans pursuant to Section 2.11, and additionally in all cases in the event
the Commitments have expired or have been terminated), as the case may be from
time to time. All payments on account of principal of or interest on any Loans,
fees or any other Obligations owing to or for the account of any one or more
Lenders shall be apportioned ratably among such Lenders in proportion to the
amounts of such principal, interest, fees or other Obligations owed to them
respectively.

(b) If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Loans or other Obligations hereunder resulting in such Lender’s receiving
payment of a proportion of the aggregate amount of its Loans and accrued
interest thereon or other such Obligations greater than its pro rata share
thereof as provided herein, then the Lender receiving such greater proportion
shall (a) notify the Administrative Agent of such fact, and (b) purchase (for
cash at face value) participations in the Loans and such other Obligations of
the other Lenders, or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this Section shall not be construed to apply to (x) any
payment made by the Borrowers pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by a Lender as consideration
for the assignment of or sale of a participation in any of its Loans to any
assignee or participant, other than to the Parent or any Subsidiary thereof (as
to which the provisions of this Section 2.15(b) shall apply). Each Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Borrower rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation. If under
any applicable bankruptcy, insolvency or similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section 2.15(b) 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 entitled
under this Section 2.15(b) to share in the benefits of any recovery on such
secured claim.

 

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2.16 Increased Costs; Change in Circumstances; Illegality.

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender
(except the Reserve Requirement reflected in the LIBOR Rate);

(ii) subject any Lender to any tax of any kind whatsoever with respect to this
Agreement or any LIBOR Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Indemnified Taxes or
Other Taxes covered by Section 2.17 and the imposition of, or any change in the
rate of, any Excluded Tax payable by such Lender); or

(iii) impose on any Lender or the London interbank market any other condition,
cost or expense affecting this Agreement or LIBOR Loans made by such Lender;

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

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

(c) A certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in Section 2.16(a) or Section 2.16(b) and delivered to the Borrowers shall be
conclusive absent manifest error. The Borrowers shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

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

 

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demand such compensation, provided that the Borrowers shall not be required to
compensate a Lender pursuant to the foregoing provisions of this Section for any
increased costs incurred or reductions suffered more than nine months prior to
the date that such Lender notifies the Borrowers of the Change in Law giving
rise to such increased costs or reductions and of such Lender’s intention to
claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

(e) If, on or prior to the first day of any Interest Period, (y) the
Administrative Agent shall have determined that adequate and reasonable means do
not exist for ascertaining the applicable LIBOR Rate for such Interest Period or
(z) the Administrative Agent shall have received written notice from the
Required Lenders of their determination that the rate of interest referred to in
the definition of “LIBOR Rate” upon the basis of which the Adjusted LIBOR Rate
for LIBOR Loans for such Interest Period is to be determined will not adequately
and fairly reflect the cost to such Lenders of making or maintaining LIBOR Loans
during such Interest Period, the Administrative Agent will forthwith so notify
the Borrowers and the Lenders. Upon such notice, (i) all then outstanding LIBOR
Loans shall automatically, on the expiration date of the respective Interest
Periods applicable thereto (unless then repaid in full), be converted into Base
Rate Loans, (ii) the obligation of the Lenders to make, to convert Base Rate
Loans into, or to continue, LIBOR Loans shall be suspended (including pursuant
to the Borrowing to which such Interest Period applies), and (iii) any Notice of
Borrowing or Notice of Conversion/Continuation given at any time thereafter with
respect to LIBOR Loans shall be deemed to be a request for Base Rate Loans, in
each case until the Administrative Agent or the Required Lenders, as the case
may be, shall have determined that the circumstances giving rise to such
suspension no longer exist (and the Required Lenders, if making such
determination, shall have so notified the Administrative Agent), and the
Administrative Agent shall have so notified the Borrowers and the Lenders.

(f) Notwithstanding any other provision in this Agreement, if, at any time after
the date hereof and from time to time, any Lender shall have determined in good
faith that the introduction of or any change in any applicable law, rule or
regulation or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, or compliance with any guideline or request from any such Governmental
Authority (whether or not having the force of law), has or would have the effect
of making it unlawful for such Lender to make or to continue to make or maintain
LIBOR Loans, such Lender will forthwith so notify the Administrative Agent and
the Borrowers. Upon such notice, (i) each of such Lender’s then outstanding
LIBOR Loans shall automatically, on the expiration date of the respective
Interest Period applicable thereto (or, to the extent any such LIBOR Loan may
not lawfully be maintained as a LIBOR Loan until such expiration date, upon such
notice) and to the extent not sooner prepaid, be converted into a Base Rate
Loan, (ii) the obligation of such Lender to make, to convert Base Rate Loans
into, or to continue, LIBOR Loans shall be suspended (including pursuant to any
Borrowing for which the Administrative Agent has received a Notice of Borrowing
but for which the Borrowing Date has not arrived), and (iii) any Notice of
Borrowing or Notice of Conversion/Continuation given at any time thereafter with
respect to LIBOR Loans shall, as to such Lender, be deemed to be a request for a
Base Rate Loan, in each case until such Lender shall have determined that the
circumstances giving rise to such suspension no longer exist and shall have so
notified the Administrative Agent, and the Administrative Agent shall have so
notified the Borrowers.

 

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2.17 Taxes.

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

(b) Without limiting the provisions of Section 2.17(a), the Borrowers shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.

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

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

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

 

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Without limiting the generality of the foregoing, in the event that any Borrower
is resident for tax purposes in the United States, any Foreign Lender shall
deliver to the Borrowers and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrowers or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:

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

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

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

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

(f) If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrowers or with respect to which the
Borrowers have paid additional amounts pursuant to this Section, it shall
promptly pay to the Borrowers an amount equal to such refund or, at the
Borrower’s direction, offset the amount of such refund against another
obligation of such Borrower to such Lender (but, in either case, only to the
extent of indemnity payments made, or additional amounts paid, by the Borrowers
under this Section with respect to the Taxes or Other Taxes giving rise to such
refund), without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that the
Borrowers, upon the request of the Administrative Agent or such Lender, agrees
to repay the amount paid over to the Borrowers (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority.
This Section 2.17(f) shall not be construed to require the Administrative Agent
or any Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrowers or any other
Person.

 

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2.18 Compensation. The Borrowers will compensate each Lender upon demand for all
losses, expenses and liabilities (including, without limitation, any loss,
expense or liability incurred by reason of the liquidation or reemployment of
deposits or other funds required by such Lender to fund or maintain LIBOR Loans)
that such Lender may incur or sustain (i) if for any reason (other than a
default by such Lender) a Borrowing or continuation of, or conversion into, a
LIBOR Loan does not occur on a date specified therefor in a Notice of Borrowing
or Notice of Conversion/Continuation, (ii) if any repayment, prepayment or
conversion of any LIBOR Loan occurs on a date other than the last day of an
Interest Period applicable thereto (including as a consequence of any assignment
made pursuant to Section 2.19(a) or any acceleration of the maturity of the
Loans pursuant to Section 9.2), (iii) if any prepayment of any LIBOR Loan is not
made on any date specified in a notice of prepayment given by the Borrowers or
(iv) as a consequence of any other failure by the Borrowers to make any payments
with respect to any LIBOR Loan when due hereunder. Calculation of all amounts
payable to a Lender under this Section 2.18 shall be made as though such Lender
had actually funded its relevant LIBOR Loan through the purchase of a Eurodollar
deposit bearing interest at the LIBOR Rate in an amount equal to the amount of
such LIBOR Loan, having a maturity comparable to the relevant Interest Period;
provided, however, that each Lender may fund its LIBOR Loans in any manner it
sees fit and the foregoing assumption shall be utilized only for the calculation
of amounts payable under this Section 2.18. A certificate (which shall be in
reasonable detail) showing the bases for the determinations set forth in this
Section 2.18 by any Lender as to any additional amounts payable pursuant to this
Section 2.18 shall be submitted by such Lender to the Borrowers either directly
or through the Administrative Agent. Determinations set forth in any such
certificate made in good faith for purposes of this Section 2.18 of any such
losses, expenses or liabilities shall be conclusive absent manifest error.

2.19 Replacement of Lenders; Mitigation of Costs.

(a) The Borrowers may, at any time at their sole expense and effort, require any
Lender (i) that has requested compensation from the Borrowers under
Sections 2.16(a) or 2.16(b) or payments from the Borrowers under Section 2.17,
or (ii) the obligation of which to make or maintain LIBOR Loans has been
suspended under Section 2.16(f) or (iii) that is a Defaulting Lender, in any
case upon notice to such Lender and the Administrative Agent, to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 11.6), all of its interests,
rights and obligations under this Agreement and the related Credit Documents to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that:

(i) the Borrowers shall have paid to the Administrative Agent the assignment fee
specified in Section 11.6(b)(iv);

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Credit Documents
(including any amounts under Section 2.18) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrowers (in
the case of all other amounts);

 

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(iii) in the case of any such assignment resulting from a request for
compensation under Sections 2.16(a) or 2.16(b) or payments required to be made
pursuant to Section 2.17, such assignment will result in a reduction in such
compensation or payments thereafter; and

(iv) such assignment does not conflict with applicable Requirements of Law.

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

(b) If any Lender requests compensation under Sections 2.16(a) or 2.16(b), or
the Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender gives a notice pursuant to Section 2.16(f), then such Lender
shall use reasonable efforts to designate a different Lending Office for funding
or booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Sections 2.16(a), 2.16(b) or 2.17, as the case may be, in
the future, or eliminate the need for the notice pursuant to Section 2.16(f), as
applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

2.20 Commitment Increase.

(a) The Borrowers shall have the right, at any time and from time to time by
written notice to and in consultation with the Administrative Agent, to request
an increase in the aggregate Commitments (each such requested increase, a
“Commitment Increase”), by having one or more existing Lenders increase their
respective Commitments then in effect (each, an “Increasing Lender”), by adding
as a Lender with a new Commitment hereunder one or more Persons that are not
already Lenders (each, an “Additional Lender”), or a combination thereof;
provided that (i) each Commitment Increase shall be offered first to the Lenders
pro rata (based on their then-existing Commitments), (ii) each request for a
Commitment Increase shall be in an aggregate minimum amount of $10,000,000 or an
integral multiple of $5,000,000 in excess thereof, (iii) the aggregate of all
Commitment Increases shall not exceed $50,000,000, and (iv) no existing Lender
shall be obligated to increase its Commitment as a result of any request for a
Commitment Increase by the Borrower unless it agrees in writing and in its sole
discretion.

(b) Each Additional Lender must be approved by the Administrative Agent (such
approval not to be unreasonably withheld or delayed) and the Borrowers. Each
Additional Lender, the Borrowers and the Administrative Agent shall execute a
joinder agreement to evidence the Commitment of such Additional Lender and its
status as a Lender hereunder and each Increasing Lender, the Borrowers and the
Administrative Agent shall sign an agreement evidencing the increased Commitment
of such Lender, in each case together with all such other documentation
(including evidence of the Borrowers’ authorization of the increase) as the
Administrative Agent, the Additional Lender or the Increasing Lender may
reasonably require, all in form and substance reasonably satisfactory to the
Administrative Agent, the Borrowers and the Additional Lender or the Increasing
Lender.

 

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(c) If the aggregate Commitments are increased in accordance with this Section,
the Administrative Agent and the Borrowers shall determine the effective date
(the “Commitment Increase Date”, which shall be a Business Day not less than
thirty (30) days prior to the Termination Date) and the final allocation of such
increase. The Administrative Agent shall promptly notify the Borrowers and the
Lenders of the final allocation of such increase and the Commitment Increase
Date. The Administrative Agent is hereby authorized, on behalf of the Lenders,
to enter into any amendments to this Agreement and the other Credit Documents as
the Administrative Agent shall reasonably deem appropriate to effect such
Commitment Increase.

(d) To the extent necessary to keep the outstanding Loans ratable in the event
of any non-ratable increase in the aggregate Commitments, on the Commitment
Increase Date, (i) all then outstanding LIBOR Loans (the “Existing Loans”) shall
automatically be converted into Base Rate Loans, (ii) immediately after the
effectiveness of the Commitment Increase, the Borrowers shall, if they so
request, convert such Base Rate Loans into LIBOR Loans (the “Subsequent
Borrowings”) in an aggregate principal amount equal to the aggregate principal
amount of the Existing Loans and of the Types and for the Interest Periods
specified in a Notice of Conversion/Continuation delivered to the Administrative
Agent in accordance with Section 2.11(b), (iii) each Lender shall pay to the
Administrative Agent in immediately available funds an amount equal to the
difference, if positive, between (y) such Lender’s ratable share (based on the
Commitments, calculated after giving effect to the Commitment Increase) of the
Subsequent Borrowings and (z) such Lender’s ratable share (based on the
Commitments, calculated without giving effect to the Commitment Increase) of the
Existing Loans, (iv) after the Administrative Agent receives the funds specified
in clause (iii) above, the Administrative Agent shall pay to each Lender the
portion of such funds equal to the difference, if positive, between (y) such
Lender’s ratable share (based on the Commitments, calculated without giving
effect to the Commitment Increase) of the Existing Loans and (z) such Lender’s
ratable share (based on the Commitments, calculated after giving effect to the
Commitment Increase) of the amount of the Subsequent Borrowings, (v) the Lenders
shall be deemed to hold the Subsequent Borrowings ratably in accordance with
their respective Commitments (calculated after giving effect to the Commitment
Increase), (vi) the Borrower shall pay all accrued but unpaid interest on the
Existing Loans to the Lenders entitled thereto and (vii) Schedule 1.1(a) shall
automatically be amended to reflect the Commitments of all Lenders after giving
effect to the Commitment Increase. The conversion of the Existing Loans pursuant
to clause (i) above shall be subject to indemnification by the Borrower pursuant
to the provisions of Section 2.18 if the Commitment Increase Date occurs other
than on the last day of the Interest Period relating thereto.

ARTICLE III

CONDITIONS OF CLOSING AND BORROWING

3.1 Conditions of Closing. The effectiveness of this Agreement is subject to the
satisfaction of the following conditions precedent:

(a) The Administrative Agent shall have received the favorable opinions of
Debevoise & Plimpton, independent outside counsel to the Borrowers, and of
internal counsel to the Borrowers, each dated as of the Restatement Closing Date
and in form and substance reasonably satisfactory to the Administrative Agent.

 

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(b) The Administrative Agent shall have received a certificate, signed by the
president, the chief executive officer or the chief financial officer of each
Borrower, dated the Restatement Closing Date and in form and substance
reasonably satisfactory to the Administrative Agent, certifying that (i) all
representations and warranties of the Borrowers contained in this Agreement and
the other Credit Documents are true and correct as of the Restatement Closing
Date (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty shall be true and correct as of such date), (ii) no
Default or Event of Default has occurred and is continuing on the Restatement
Closing Date, both immediately before and after giving effect to this Agreement,
(iii) no Material Adverse Effect has occurred since December 31, 2007, and there
exists no event, condition or state of facts that would reasonably be expected
to result in a Material Adverse Effect, and (iv) all conditions to the
effectiveness of this Agreement set forth in this Section 3.1 (and, as
applicable, to any extension of credit to be made on the Restatement Closing
Date as set forth in Section 3.2) have been satisfied or waived as required
hereunder.

(c) The Administrative Agent shall have received a certificate of the secretary
or an assistant secretary of each Borrower, dated the Restatement Closing Date
and in form and substance reasonably satisfactory to the Administrative Agent,
certifying (i) that attached thereto is a true and complete copy of the articles
or certificate of incorporation, certificate of formation or other
organizational document and all amendments thereto of such Borrower, certified
as of a recent date by the Secretary of State (or comparable Governmental
Authority) of its jurisdiction of organization, and that the same has not been
amended since the date of such certification, (ii) that attached thereto is a
true and complete copy of the bylaws, operating agreement or similar governing
document of such Borrower, as then in effect and as in effect at all times from
the date on which the resolutions referred to in clause (iii) below were adopted
to and including the date of such certificate, and (iii) that attached thereto
is a true and complete copy of resolutions adopted by the board of directors (or
similar governing body) of such Borrower, authorizing the execution, delivery
and performance of this Agreement and the other Credit Documents to which it is
a party, and as to the incumbency and genuineness of the signature of each
officer of such Borrower executing this Agreement or any of such other Credit
Documents, and attaching all such copies of the documents described above.

(d) The Administrative Agent shall have received a certificate as of a recent
date of the good standing of each Borrower executing any Credit Documents as of
the Restatement Closing Date, under the laws of its jurisdiction of
organization, from the Secretary of State (or comparable Governmental Authority)
of such jurisdiction.

(e) Since December 31, 2007, there shall not have occurred (i) a Material
Adverse Effect or (ii) any event, condition or state of facts that would
reasonably be expected to have a Material Adverse Effect.

 

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(f) No Loans shall be outstanding to PXP and PXP shall have paid in full all
Obligations owed by it under the Prior Credit Agreement.

(g) Each of the Administrative Agent and each Lender shall have received such
other documents, certificates, opinions and instruments in connection with the
transactions contemplated hereby as it shall have reasonably requested.

3.2 Conditions of Borrowings. The obligation of each Lender to make any Loans
hereunder, is subject to the satisfaction of the following conditions precedent
on the relevant Borrowing Date:

(a) The Administrative Agent shall have received a Notice of Borrowing in
accordance with Section 2.2(b);

(b) Each of the representations and warranties contained in Article IV and in
the other Credit Documents shall be true and correct on and as of such Borrowing
Date, both immediately before and after giving effect to the Loans to be made on
such date (except to the extent any such representation or warranty is expressly
stated to have been made as of a specific date, in which case such
representation or warranty shall be true and correct as of such date); and

(c) No Default or Event of Default shall have occurred and be continuing on such
date, both immediately before and after giving effect to the Loans to be made on
such date.

Each giving of a Notice of Borrowing and the consummation of each Borrowing
shall be deemed to constitute a representation by the Borrowers that the
statements contained in Sections 3.2(b) and 3.2(c) are true, both as of the date
of such notice or request and as of the relevant Borrowing Date or date of
issuance.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into this Agreement
and to induce the Lenders to extend the credit contemplated hereby, each of the
Parent and the Borrowers represents and warrants to the Administrative Agent and
the Lenders as follows:

4.1 Corporate Organization and Power. Each Borrower and each Subsidiary thereof
(i) is a corporation duly organized or formed, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or formation,
as the case may be, (ii) has the full corporate power and authority to execute,
deliver and perform the Credit Documents to which it is or will be a party, to
own and hold its property and to engage in its business as presently conducted,
and (iii) is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where the nature of its business or the
ownership of its properties requires it to be so qualified, except where the
failure to be so qualified, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.

 

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4.2 Authorization; Enforceability. Each Borrower has taken, or on the
Restatement Closing Date will have taken, all necessary corporate action to
execute, deliver and perform each of the Credit Documents to which it is or will
be a party, and has, or on the Restatement Closing Date (or any later date of
execution and delivery) will have, validly executed and delivered each of the
Credit Documents to which it is or will be a party. This Agreement constitutes,
and each of the other Credit Documents upon execution and delivery will
constitute, the legal, valid and binding obligation of each Borrower or
Subsidiary thereof that is a party hereto or thereto, enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, by general equitable principles or by
principles of good faith and fair dealing (regardless of whether enforcement is
sought in equity or at law).

4.3 No Violation. The execution, delivery and performance by each Borrower or
Subsidiary thereof of each of the Credit Documents to which it is or will be a
party, and compliance by it with the terms hereof and thereof, do not and will
not (i) violate any provision of its articles or certificate of incorporation,
its bylaws or other applicable formation or organizational documents,
(ii) contravene any other Requirement of Law applicable to it, (iii) conflict
with, result in a breach of or constitute (with notice, lapse of time or both) a
default under any indenture, mortgage, lease, agreement, contract or other
instrument to which it is a party, by which it or any of its properties is bound
or to which it is subject, or (iv) result in or require the creation or
imposition of any Lien upon any of its properties, revenues or assets; except,
in the case of clauses (ii) and (iii) above, where such violations, conflicts,
breaches or defaults, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.

4.4 Governmental and Third-Party Authorization; Permits.

(a) No consent, approval, authorization or other action by, notice to, or
registration or filing with, any Governmental Authority or other Person is or
will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by each Borrower or Subsidiary thereof of
this Agreement or any of the other Credit Documents to which it is or will be a
party or the legality, validity or enforceability hereof or thereof, other than
(i) consents, authorizations and filings that have been (or on or prior to the
Restatement Closing Date will have been) made or obtained and that are (or on
the Restatement Closing Date will be) in full force and effect, and
(ii) consents and filings the failure to obtain or make which, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect. Each Borrower and each of its Subsidiaries has, and is in good standing
with respect to, all governmental approvals, licenses, permits and
authorizations necessary to conduct its business as presently conducted and to
own or lease and operate its properties, except for those the failure to obtain
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.

(b) Each Insurance Subsidiary holds licenses (including, without limitation,
licenses or certificates of authority from relevant Insurance Regulatory
Authorities), permits or authorizations to transact insurance and reinsurance
business (collectively, the “Licenses”) from each Insurance Regulatory Authority
from which it is required to have any such license, permit or other
authorization, except where the failure to have such license, permit or other

 

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authorization, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. (i) No such License is the subject
of a proceeding for suspension, revocation or limitation or any similar
proceedings, and (ii) no such suspension, revocation or limitation is threatened
in writing by any relevant Insurance Regulatory Authority, that, in each
instance under (i) and (ii) above, would individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

4.5 Litigation. There are no actions, investigations, suits or proceedings
pending or, to the knowledge of the Borrowers, threatened, at law, in equity or
in arbitration, before any court, other Governmental Authority, arbitrator or
other Person, (i) against or affecting any of the Borrowers or their
Subsidiaries, or any of their respective properties that, if adversely
determined, would reasonably be expected to have a Material Adverse Effect, or
(ii) with respect to this Agreement, any of the other Credit Documents or any of
the transactions contemplated hereby.

4.6 Taxes. Each Borrower and each of its Subsidiaries has timely filed all
federal, state, local and foreign tax returns and reports required to be filed
by it and has paid, prior to the date on which penalties would attach thereto or
a Lien would attach to any of the properties of a Borrower or its Subsidiaries
if unpaid, all taxes, assessments, fees and other charges levied upon it or upon
its properties that are shown thereon as due and payable, other than those
(i) that are not yet delinquent or that are being contested in good faith and by
proper proceedings and for which adequate reserves have been established in
accordance with GAAP or (ii) that, if not properly filed or paid, or if
otherwise adversely determined, would not reasonably be expected to have a
Material Adverse Effect, including those set forth on Schedule 4.6. Such returns
accurately reflect in all material respects all liability for taxes of the
Borrowers and their Subsidiaries for the periods covered thereby. As of the
Restatement Closing Date, there is no ongoing audit or examination or, to the
knowledge of the Borrowers, other investigation by any Governmental Authority of
the tax liability of any of the Borrowers and their Subsidiaries, and there is
no material unresolved claim by any Governmental Authority concerning the tax
liability of any Borrower or its Subsidiaries for any period for which tax
returns have been or were required to have been filed, other than (i) unsecured
claims for which adequate reserves have been established in accordance with GAAP
or (ii) audits, examinations or investigations that, if adversely determined,
would not reasonably be expected to have a Material Adverse Effect, including
those set forth on Schedule 4.6. Except as set forth on Schedule 4.6, as of the
Restatement Closing Date, no Borrower or any Subsidiary thereof has waived or
extended or has been requested to waive or extend the statute of limitations
relating to the payment of any taxes.

4.7 Subsidiaries. Schedule 4.7 sets forth a list, as of the Restatement Closing
Date, of each of the Subsidiaries of the Parent (including the other Borrowers)
that has capital or a net worth in excess of $25,000,000 and (i) as to each such
Subsidiary, the percentage ownership of the parent entity in each class of its
Capital Stock, and (ii) as to each Borrower and each of such Subsidiaries (other
than the Parent), the number of shares of each class of Capital Stock
outstanding, and the number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and similar rights.

4.8 Full Disclosure. All factual information heretofore, contemporaneously or
hereafter furnished in writing to the Administrative Agent, the Arranger or any
Lender by or on

 

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behalf of any Borrower or its Subsidiaries for purposes of or in connection with
this Agreement or the other Credit Documents is or will be true and accurate in
all material respects on the date as of which such information is dated or
certified (or, if such information has been updated, amended or supplemented, on
the date as of which any such update, amendment or supplement is dated or
certified) and not made incomplete by omitting to state a material fact
necessary to make the statements contained herein and therein, in light of the
circumstances under which such information was provided, not misleading;
provided that, with respect to projections, budgets and other estimates, the
Borrowers represent only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time. As of the Restatement
Closing Date, there is no fact known to any Borrower or its Subsidiaries that
has, or would reasonably be expected to have, a Material Adverse Effect, which
fact has not been set forth herein, in the financial statements of the Parent
and its Subsidiaries furnished to the Administrative Agent and/or the Lenders,
or in any certificate, opinion or other written statement made or furnished by
any Borrower to the Administrative Agent and/or the Lenders.

4.9 Margin Regulations. No Borrower or any Subsidiary thereof is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock. No proceeds of
the Loans will be used, directly or indirectly, to purchase or carry any Margin
Stock, to extend credit for such purpose or for any other purpose, in each case
that would violate or be inconsistent with Regulations T, U or X or any
provision of the Exchange Act.

4.10 Financial Matters.

(a) The Borrowers have heretofore furnished to the Administrative Agent copies
of the audited consolidated balance sheet of the Parent and its Subsidiaries as
of December 31, 2007, and the related statements of income, cash flows and
stockholders’ equity for the fiscal year then ended. Such financial statements
have been prepared in accordance with GAAP (subject, with respect to the
unaudited financial statements, to the absence of notes required by GAAP and to
normal year-end adjustments) and present fairly in all material respects the
financial condition of the Parent and its Subsidiaries on a consolidated basis
as of the respective dates thereof and the results of operations of the Parent
and its Subsidiaries on a consolidated basis for the respective periods then
ended.

(b) The Parent has furnished to the Administrative Agent copies of the Annual
Statements of each Insurance Subsidiary as of December 31, 2007 for the fiscal
year then ended, each as filed with the relevant Insurance Regulatory Authority,
each as filed with the relevant Insurance Regulatory Authority (collectively,
the “Historical Statutory Statements”). The Historical Statutory Statements
(including, without limitation, the provisions made therein for investments and
the valuation thereof, reserves, policy and contract claims and statutory
liabilities) have been prepared, in all material respects, in accordance with
SAP (except as may be reflected in the notes thereto and subject, with respect
to the quarterly statements, to the absence of notes required by SAP and to
normal year end adjustments), were in all material respects, in compliance with
applicable Requirements of Law when filed and present fairly in all material
respects the financial condition of the respective Insurance Subsidiaries
covered thereby as of the respective dates thereof and the results of
operations, changes in capital and surplus and cash flows of the respective
Insurance Subsidiaries covered thereby for the respective periods then ended.

 

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4.11 ERISA.

(a) Each Borrower and its Subsidiaries and the ERISA Affiliates thereof is in
compliance with the applicable provisions of ERISA, and each Plan is and has
been administered in compliance with all applicable Requirements of Law,
including, without limitation, the applicable provisions of ERISA and the Code,
in each case except where the failure so to comply, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect,
including those matters set forth on Schedule 4.11. Except as set forth on
Schedule 4.11, no ERISA Event (i) has occurred within the five-year period prior
to the Restatement Closing Date, (ii) has occurred and is continuing, or
(iii) to the knowledge of the Borrowers, is reasonably expected to occur with
respect to any Plan.

(b) No Borrower or its Subsidiaries or any ERISA Affiliates thereof has any
outstanding liability on account of a complete or partial withdrawal from any
Multiemployer Plan, and no Borrower or its Subsidiaries or any ERISA Affiliates
thereof would become subject to any liability under ERISA if any such Borrower
or its Subsidiaries or any ERISA Affiliates thereof were to withdraw completely
from all Multiemployer Plans as of the most recent valuation date. No
Multiemployer Plan is in “reorganization” or is “insolvent” within the meaning
of such terms under ERISA.

4.12 Environmental Matters. Except with respect to any matters that,
individually or in the aggregate, would not reasonably be expected to result in
a Material Adverse Effect, neither the Parent nor any of its Subsidiaries
(i) has failed to comply with any Environmental Law or to obtain, maintain or
comply with any permit, license or other approval required for its business
under any Environmental Law, or (ii) is involved in any suit, action or
proceeding, or has received any written notice, complaint or other request for
information from any Governmental Authority or other Person, with respect to any
actual or alleged Environmental Claims.

4.13 Compliance with Laws. Each Borrower and each of its Subsidiaries has timely
filed all material reports, documents and other materials required to be filed
by it under all applicable Requirements of Law with any Governmental Authority,
has retained all material records and documents required to be retained by it
under all applicable Requirements of Law, and is otherwise in compliance with
all applicable Requirements of Law in respect of the conduct of its business and
the ownership and operation of its properties, except in each case to the extent
that the failure to comply therewith, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.

4.14 Intellectual Property. Each Borrower and each of its Subsidiaries owns, or
has the legal right to use, all Intellectual Property necessary for it to
conduct its business as currently conducted. No claim has been asserted or is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor do the Borrowers know of any such claim, and to the knowledge of
the Borrowers, the use of such Intellectual Property by any Borrower or its
Subsidiaries does not infringe on the known rights of any Person, except for
such claims and infringements that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.

 

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4.15 Investment Company Act. No Borrower or any Subsidiary thereof is an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

4.16 Insurance. The assets, properties and business of each of the Borrowers and
their respective Subsidiaries are insured against such hazards and liabilities,
under such coverages and in such amounts, as are customarily maintained by
prudent companies similarly situated and under policies issued by insurers of
recognized responsibility.

4.17 OFAC; Anti-Terrorism Laws.

(a) No Borrower or any Subsidiary thereof or any Affiliate of any of the
foregoing (i) is a Sanctioned Person, (ii) has more than 15% of its assets in
Sanctioned Countries, or (iii) derives more than 15% of its operating income
from investments in, or transactions with, Sanctioned Persons or Sanctioned
Countries. No part of the proceeds of any Loan hereunder will be used directly
or indirectly to fund any operations in, finance any investments or activities
in or make any payments to, a Sanctioned Person or a Sanctioned Country.

(b) Neither the making of the Loans hereunder nor the use of the proceeds
thereof will violate the PATRIOT Act, the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto. The Borrowers and their
Subsidiaries are in compliance in all material respects with the PATRIOT Act.

ARTICLE V

AFFIRMATIVE COVENANTS

Each Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full in cash of all principal and interest with
respect to the Loans together with all fees, expenses and other amounts then due
and owing hereunder:

5.1 Financial Statements. The Borrowers will deliver to the Administrative Agent
and to each Lender:

(a) Quarterly Statements. As soon as available and in any event within 60 days
(or, if earlier, the quarterly report deadline under the Exchange Act rules and
regulations) after the end of each of the first three fiscal quarters of each
fiscal year, unaudited consolidated balance sheets of the Parent and its
Subsidiaries as of the end of such fiscal quarter and unaudited consolidated
statements of income, cash flows and stockholders’ equity for the Parent and its
Subsidiaries for the fiscal quarter then ended and for that portion of the
fiscal year then ended, in each case setting forth comparative consolidated
figures as of the end of and for the corresponding period in the preceding
fiscal year, all in reasonable detail and prepared in accordance with GAAP

 

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(subject to the absence of notes required by GAAP and subject to normal year-end
adjustments) applied on a basis consistent with that of the preceding quarter or
containing disclosure of the effect on the financial condition or results of
operations of any change in the application of accounting principles and
practices during such quarter.

(b) Annual Statements. As soon as available and in any event within 120 days
(or, if earlier, the annual report deadline under the Exchange Act rules and
regulations) after the end of each fiscal year, an audited consolidated balance
sheet of the Parent and its Subsidiaries as of the end of such fiscal year and
the related audited consolidated statements of income, cash flows and
stockholders’ equity for the Parent and its Subsidiaries for the fiscal year
then ended, including the notes thereto, in each case setting forth comparative
consolidated figures as of the end of and for the preceding fiscal year, all in
reasonable detail and (with respect to the audited statements) certified by the
independent certified public accounting firm regularly retained by the Parent or
another independent certified public accounting firm of recognized national
standing reasonably acceptable to the Administrative Agent, together with a
report thereon by such accountants that is not qualified as to going concern or
scope of audit and to the effect that such financial statements present fairly
in all material respects the consolidated financial condition and results of
operations of the Parent and its Subsidiaries as of the dates and for the
periods indicated in accordance with GAAP applied on a basis consistent with
that of the preceding year or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such year.

(c) PLIC Quarterly Statements. As soon as possible, but no later than 60 days
after the end of each of the first three fiscal quarters of each fiscal year, a
copy of the quarterly statement of PLIC for each such fiscal quarter, all
prepared in accordance with SAP and accompanied by the certification of a
Responsible Officer of PLIC that all such quarterly statements present fairly in
accordance with SAP the financial position of PLIC for the period then ended.

(d) Other Annual Statements. As soon as available, but not later than 120 days
after the end of each fiscal year, (i) a copy of the Annual Statement of PLIC
for such fiscal year prepared in accordance with SAP and accompanied by the
certification of a Responsible Officer of PLIC that such Annual Statement
presents fairly in accordance with SAP the financial position of PLIC for the
period then ended and, (ii) for each such fiscal year end prior to the
consummation of the PXP Spin-Off, a copy of the unaudited consolidated balance
sheet of PXP and its Subsidiaries as of the end of such year and the related
consolidated statements of income, shareholders’ equity and cashflows for the
period commencing on the first day of such fiscal year and ending on the last
day thereof and certified by a Responsible Officer of PXP as fairly presenting,
in accordance with GAAP, the financial positions and results of operations of
PXP and its Subsidiaries.

(e) Other PLIC Filings. As soon as available, (i) a copy of PLIC’s “Statement of
Actuarial Opinion” which is provided to the Insurance Regulatory Authority as to
the adequacy of policyholder reserves of PLIC, and (ii) a copy of the
“Management Discussion and Analysis” filed by PLIC with the Insurance Regulatory
Authority with respect to any of the foregoing financial statements and such
other information.

 

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5.2 Other Business and Financial Information. The Borrowers will deliver to the
Administrative Agent and each Lender:

(a) Compliance Certificates. Concurrently with each delivery of the financial
statements described in Sections 5.1(a) through 5.1(d), a Compliance Certificate
with respect to the period covered by the financial statements being delivered
thereunder, executed by a Financial Officer of the Borrowers and reflecting the
computation of the financial covenants set forth in Article VI as of the last
day of the period covered by such financial statements;

(b) Shareholder and SEC Reports, etc. Promptly upon the sending, filing or
receipt thereof, copies of (i) all financial statements, reports, notices and
proxy statements that any Borrower or a Subsidiary thereof shall send or make
available generally to its shareholders, (ii) all regular, periodic and special
reports, registration statements and prospectuses (other than on Form S-8) that
any Borrower or a Subsidiary thereof shall render to or file with the Securities
and Exchange Commission, the National Association of Securities Dealers, Inc. or
any national securities exchange, and (iii) all press releases and other
statements made available generally by any Borrower or a Subsidiary thereof to
the public concerning material developments in the business of the Borrowers and
their Subsidiaries;

(c) Material Events. Promptly upon (and in any event within five Business Days
after) any Responsible Officer of any Borrower or a Subsidiary thereof obtaining
knowledge thereof, written notice of any of the following:

(i) the occurrence of any Default or Event of Default, together with a written
statement of a Responsible Officer of the Borrowers specifying the nature of
such Default or Event of Default, the period of existence thereof and the action
that the Borrowers have taken and propose to take with respect thereto;

(ii) the institution or threatened institution of any action, suit,
investigation or proceeding against or affecting any Borrower or a Subsidiary
thereof, including any such investigation or proceeding by any Governmental
Authority (other than routine periodic inquiries, investigations or reviews),
that, if adversely determined, would reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect,;

(iii) the receipt by any Borrower or a Subsidiary thereof from any Governmental
Authority of (A) any notice asserting any failure by any Borrower or a
Subsidiary thereof to be in compliance with applicable Requirements of Law or
that threatens the taking of any action against any Borrower or a Subsidiary
thereof or sets forth circumstances that, if taken or adversely determined,
would reasonably be expected to have a Material Adverse Effect, or (B) any
notice of any actual or threatened suspension, limitation or revocation of,
failure to renew, or imposition of any restraining order, escrow or impoundment
of funds in connection with, any license, permit, accreditation or authorization
of any Borrower or a Subsidiary thereof, where such action would reasonably be
expected to have a Material Adverse Effect;

(iv) any other matter or event that has, or would reasonably be expected to
have, a Material Adverse Effect, together with a written statement of a
Responsible

 

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Officer of the Borrowers setting forth the nature and period of existence
thereof and the action that the affected Borrowers or Subsidiaries have taken
and propose to take with respect thereto; and

(d) Other Information. As promptly as reasonably possible, such other
information about the business, condition (financial or otherwise), operations
or properties of any Borrower or Subsidiary thereof as the Administrative Agent
or any Lender may from time to time reasonably request.

5.3 Existence; Franchises; Maintenance of Properties. Each of the Parent and the
Borrowers will, and will cause each of their respective Subsidiaries to,
(i) maintain and preserve in full force and effect its legal existence, except
as expressly permitted otherwise by Section 7.2, (ii) obtain, maintain and
preserve in full force and effect all other rights, franchises, licenses,
permits, certifications, approvals and authorizations required by Governmental
Authorities and necessary to the ownership, occupation or use of its properties
or the conduct of its business, except to the extent the failure to do so would
not reasonably be expected to have a Material Adverse Effect, and (iii) keep all
material properties in good working order and condition (normal wear and tear
and damage by casualty excepted) and from time to time make all necessary
repairs to and renewals and replacements of such properties, except to the
extent that any of such properties are obsolete or are being replaced or, in the
good faith judgment of the Borrowers, are no longer useful or desirable in the
conduct of the business of the Borrowers and their Subsidiaries.

5.4 Compliance with Laws. Each Borrower will, and will cause each of its
Subsidiaries to, comply in all respects with all Requirements of Law applicable
in respect of the conduct of its business and the ownership and operation of its
properties, except to the extent the failure so to comply would not reasonably
be expected to have a Material Adverse Effect.

5.5 Payment of Obligations. Each Borrower will, and will cause each of its
Subsidiaries to, (i) pay, discharge or otherwise satisfy at or before maturity
all liabilities and obligations as and when due (subject to any applicable
subordination, grace and notice provisions), except to the extent failure to do
so would not reasonably be expected to have a Material Adverse Effect, and
(ii) pay and discharge all taxes, assessments and governmental charges or levies
imposed upon it, upon its income or profits or upon any of its properties, prior
to the date on which penalties would attach thereto, and all lawful claims that,
if unpaid, would become a Lien (other than a Permitted Lien) upon any of the
properties of any Borrower or a Subsidiary thereof; provided, however, that no
Borrower or Subsidiary thereof shall be required to pay any such tax,
assessment, charge, levy or claim that is being contested in good faith and by
proper proceedings and as to which such Borrower or Subsidiary is maintaining
adequate reserves with respect thereto in accordance with GAAP.

5.6 Insurance. Each Borrower will, and will cause each of its Subsidiaries to,
maintain with financially sound and reputable insurance companies insurance with
respect to its assets, properties and business, against such hazards and
liabilities, of such types and in such amounts, as is customarily maintained by
companies in the same or similar businesses similarly situated.

 

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5.7 Maintenance of Books and Records; Inspection. Each Borrower will, and will
cause each of its Subsidiaries to, (i) maintain adequate books, accounts and
records, in which full, true and correct entries shall be made of all financial
transactions in relation to its business and properties, and prepare all
financial statements required under this Agreement, in each case in accordance
with GAAP and in compliance with the requirements of any Governmental Authority
having jurisdiction over it, and (ii) permit employees or agents of the
Administrative Agent or any Lender to visit and inspect its properties and
examine or audit its books, records, working papers and accounts and make copies
and memoranda of them, and to discuss its affairs, finances and accounts with
its officers and employees and, upon notice to the Borrowers, the independent
public accountants of the Parent and its Subsidiaries (and by this provision the
Parent authorizes such accountants to discuss the finances and affairs of the
Parent and its Subsidiaries), all at such times and from time to time, upon
reasonable notice and during business hours, as may be reasonably requested.

5.8 Environmental Laws. Each Borrower will, and will cause each of its
Subsidiaries to, (i) comply in all material respects with, and use commercially
reasonable efforts to ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and use commercially
reasonable efforts to ensure that all tenants and subtenants obtain and comply
in all material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except to the extent that the failure to do so would not reasonably be
expected to have a Material Adverse Effect, and (ii) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions, required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws, except to the extent that the same are
being contested in good faith by appropriate proceedings or to the extent the
failure to conduct or complete any of the foregoing would not reasonably be
expected to have a Material Adverse Effect.

5.9 OFAC, PATRIOT Act Compliance. Each Borrower will, and will cause each of its
Subsidiaries to, (i) refrain from doing business in a Sanctioned Country or with
a Sanctioned Person in violation of the economic sanctions of the United States
administered by OFAC, and (ii) provide, to the extent commercially reasonable,
such information and take such actions as are reasonably requested by the
Administrative Agent or any Lender in order to assist the Administrative Agent
and the Lenders in maintaining compliance with the PATRIOT Act.

5.10 Further Assurances. Each Borrower will, and will cause each of its
Subsidiaries to, make, execute, endorse, acknowledge and deliver any amendments,
modifications or supplements hereto and restatements hereof and any other
agreements, instruments or documents, and take any and all such other actions,
as may from time to time be reasonably requested by the Administrative Agent or
the Required Lenders to effect, confirm or further assure or protect and
preserve the interests, rights and remedies of the Administrative Agent and the
Lenders under this Agreement and the other Credit Documents.

 

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ARTICLE VI

FINANCIAL COVENANTS

Each Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full in cash of all principal and interest with
respect to the Loans together with all fees, expenses and other amounts then due
and owing hereunder:

6.1 Maximum Consolidated Indebtedness to Total Capitalization. The ratio of
Consolidated Indebtedness to Total Capitalization shall not be greater than 0.30
to 1.0 at any time.

6.2 Minimum Consolidated Net Worth.

(a) Prior to the consummation of the PXP Spin-Off, Consolidated Net Worth shall
be at all times an amount not less than the sum of (x) 80% of Consolidated Net
Worth as of March 31, 2006, plus (y) 50% of Consolidated Net Income for each
fiscal quarter (beginning with the fiscal quarter ending June 30, 2006) for
which Consolidated Net Income (measured at the end of each such fiscal quarter)
is a positive amount plus (z) 100% of the aggregate increases in shareholders’
equity of the Parent by reason of the issuance or sale of Capital Stock of the
Parent or any Subsidiary of the Parent.

(b) Following the consummation of the PXP Spin-Off, Consolidated Net Worth shall
be at all times an amount not less than the sum of (i) the greater of (x) 75% of
Consolidated Net Worth immediately following the PXP Spin-Off and
(y) $1,125,000,000, plus (ii) 50% of Consolidated Net Income for each fiscal
quarter (beginning with the first full fiscal quarter immediately following the
PXP Spin-Off) for which Consolidated Net Income (measured at the end of each
such fiscal quarter) is a positive amount plus (iii) 100% of the aggregate
increases in shareholders’ equity of the Parent by reason of the issuance or
sale of Capital Stock of the Parent or any Subsidiary of the Parent.

6.3 Minimum Risk-Based Capital. PLIC shall, as of the last day of each calendar
quarter, have a Risk Based Capital Ratio of not less than 2.50 to 1

6.4 Minimum A.M. Best Financial Strength Rating. The “Financial Strength Rating”
of PLIC issued by A.M. Best shall at all times be “A-” or better.

ARTICLE VII

NEGATIVE COVENANTS

Each Borrower covenants and agrees that, until the termination of the
Commitments and the payment in full in cash of all principal and interest with
respect to the Loans together with all fees, expenses and other amounts then due
and owing hereunder:

 

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7.1 Liens. The Borrowers will not, nor will they permit or cause any of their
Subsidiaries or any SPE to, directly or indirectly, make, create, incur, assume
or suffer to exist, any Lien upon or with respect to any part of its property or
assets, whether now owned or hereafter acquired, or file or consent to the
filing of, or knowingly permit to remain in effect, any financing statement or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the Uniform Commercial Code of any state or under any
similar recording or notice statute, or agree to do any of the foregoing, other
than the following (collectively, “Permitted Liens”):

(i) Liens in existence on the Restatement Closing Date and set forth on
Schedule 7.1, and any extensions, renewals or replacements thereof; provided
that any such extension, renewal or replacement Lien shall be limited to all or
a part of the property that secured the Lien so extended, renewed or replaced
(plus any improvements on such property) and shall secure only those obligations
that it secures on the date hereof (and any renewals, replacements, refinancings
or extensions of such obligations that do not increase the outstanding principal
amount thereof);

(ii) Liens imposed by law, such as Liens of carriers, warehousemen, mechanics,
materialmen and landlords, incurred in the ordinary course of business for sums
not constituting borrowed money that are not overdue for a period of more than
30 days or that are being contested in good faith by appropriate proceedings and
for which adequate reserves have been established in accordance with GAAP (if so
required);

(iii) Liens (other than any Lien imposed by ERISA, the creation or incurrence of
which would result in an Event of Default under Section 9.1(i)) incurred in the
ordinary course of business in connection with worker’s compensation,
unemployment insurance or other forms of governmental insurance or benefits, or
to secure the performance of letters of credit, bids, tenders, statutory
obligations, surety and appeal bonds, leases, public or statutory obligations,
government contracts and other similar obligations (other than obligations for
borrowed money) entered into in the ordinary course of business;

(iv) Liens for taxes, assessments or other governmental charges or statutory
obligations that are not delinquent or remain payable without any penalty or
that are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP (if so
required);

(v) any attachment or judgment Lien not constituting an Event of Default under
Section 9.1(h);

(vi) customary rights of set-off, revocation, refund or chargeback under deposit
agreements or under the Uniform Commercial Code of banks or other financial
institutions where the Parent or any of its Subsidiaries maintains deposits
(other than deposits intended as cash collateral) in the ordinary course of
business;

 

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(vii) Liens that arise in favor of banks under Article 4 of the Uniform
Commercial Code on items in collection and the documents relating thereto and
proceeds thereof;

(viii) Liens arising from the filing (for notice purposes only) of UCC-1
financing statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) in respect of true leases otherwise permitted hereunder;

(ix) with respect to any real property occupied by any Borrower or Subsidiary
thereof, (a) all easements, rights of way, reservations, licenses,
encroachments, variations and similar restrictions, charges and encumbrances on
title that do not secure monetary obligations and do not materially impair the
use of such property for its intended purposes or the value thereof, and (b) any
other Lien or exception to coverage described in mortgagee policies of title
insurance issued in favor of and accepted by the Administrative Agent;

(x) any leases, subleases, licenses or sublicenses granted by any Borrower or
any of their respective Subsidiaries to third parties in the ordinary course of
business and not interfering in any material respect with the business of such
Borrower and its Subsidiaries, and any interest or title of a lessor, sublessor,
licensor or sublicensor under any lease or license permitted under this
Agreement;

(xi) Liens on the common stock or other securities of any Subsidiary or SPE
formed in connection with a transaction of the type described in Section
7.2(c)(iii);

(xii) Liens securing obligations under Swap Contracts of any Borrower or its
Subsidiaries entered into in the ordinary course of business and not for
speculation;

(xiii) Liens on property held in any segregated separate account of an Insurance
Subsidiary and established pursuant to the applicable insurance code and other
Requirements of Law for the benefit of specified classes of policyholders,
annuitants or other third parties and securing Indebtedness that is non-recourse
to the Borrowers or their Subsidiaries;

(xiv) Liens on assets acquired in connection with any Permitted Acquisition and
securing obligations assumed in connection with such Permitted Acquisition;
provided that such Liens were not incurred in contemplation of or in connection
with the Permitted Acquisition or any transactions related thereto;

(xv) Liens securing Indebtedness of the Borrowers and their Subsidiaries or any
SPE incurred solely to finance the acquisition of new assets, provided that
(x) any such Lien shall attach to the property being acquired concurrently with
or within ninety (90) days after the acquisition by the applicable Borrower,
Subsidiary or SPE, (y) the amount of the Indebtedness secured by such Lien shall
not exceed 100% of the cost to the applicable Borrower, Subsidiary or SPE of
acquiring such assets, and (z) any such Lien shall not encumber any other
property of the applicable Borrower, Subsidiary or SPE; and

 

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(xvi) other Liens securing Indebtedness not in excess of $100,000,000.

7.2 Merger, Consolidation and Sales of Assets. The Borrowers will not, nor will
they permit or cause any of their Subsidiaries to:

(a) consolidate with or be a party to a merger with any other Person except
(i) in connection with a Permitted Acquisition or Permitted Joint Venture,
provided that if any Borrower is a party thereto, such Borrower is the surviving
entity and (ii) any Subsidiary (other than a Borrower) may merge or consolidate
with, or be liquidated into any Borrower (so long as the Borrower is the
surviving or continuing entity) or any other Subsidiary, in each case so long as
no Default or Event of Default has occurred and is continuing or would result
therefrom;

(b) sell, lease or otherwise dispose of any substantial part of its assets
provided that the foregoing shall not apply to or operate to prevent (i) either
(A) reinsurance and similar risk sharing arrangements entered into in the
ordinary course of business, or (B) reinsurance arrangements with respect to a
whole block of business, (ii) sales or other dispositions of assets acquired in
satisfaction of obligations owing to any Borrower or Subsidiary thereof,
(iii) the sale of all or any substantial part of the assets of, or of the equity
interests held by any Borrower in, any Subsidiary which is not a Borrower,
(iv) the sale of any partnership or other interests in investment vehicles by
the Borrowers or their subsidiaries in the ordinary course of business, (v) the
sale, or sale and leaseback, of the real property located at One American Row,
Hartford, Connecticut or 56 Prospect Street, Hartford, Connecticut, (vi) sale
and leaseback transactions (other than those specified in clause (v) above),
provided that the aggregate net proceeds of such transactions shall not exceed
$25,000,000, (vii) the sale or transfer of assets (other than the closed block
assets referred to in clause (d) below) from any of the Borrowers or their
Subsidiaries to any other of the Borrowers or their Subsidiaries, or (viii) the
PXP Spin-Off, so long as in the case of each of the matters described in clauses
(i) through (viii) above, no Default or Event of Default shall have occurred and
be continuing or would occur as a result thereof;

(c) sell, transfer or otherwise dispose of the specified life and annuity
policies forming a closed block established in the “Plan of Reorganization” of
Phoenix Home Life Mutual Insurance Company for the benefit of holders of the
policies in the closed block or the assets or liabilities relating thereto,
provided that the foregoing shall not apply to or operate to prevent:

(i) the Borrowers from entering into inter-company transactions relating to such
closed block, but only to the extent that such transactions would also be
permitted under Section 7.6;

(ii) PLIC from entering into ordinary course reinsurance agreements with regard
to such closed block; or

(iii) a monetization or securitization of such closed block, provided that
(A) no Default or Event of Default shall have occurred and be continuing at the
time of the consummation of such transaction or would exist immediately after
giving effect thereto, (B) immediately after giving effect to such transaction
and any Borrowings in connection therewith, the Borrowers shall be in compliance
with the financial covenants contained in

 

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Article VI, and (C) all Indebtedness and other material liabilities or
obligations arising from the transaction shall be non-recourse to the Borrowers
and their Subsidiaries (and their assets), other than Subsidiaries (and their
assets) that (x) are established in connection with the transaction and (y) are
not the parent entity (direct or indirect) of any of the Borrowers.

7.3 Indebtedness. The Borrowers will not, nor will they permit or cause any of
their Subsidiaries to, create, incur, assume or suffer to exist any Indebtedness
other than:

(i) Indebtedness of the Borrowers in favor of the Administrative Agent and the
Lenders incurred under this Agreement and the other Credit Documents; and

(ii) other Indebtedness, provided that (i) at the time of incurrence thereof, no
Default or Event of Default shall have occurred and be continuing and
(ii) immediately after giving effect to the incurrence thereof, the Borrowers
shall be in compliance with the financial covenants contained in Article VI.

7.4 Investments. The Borrowers will not, nor will they permit or cause any of
their Subsidiaries to, directly or indirectly, in any transaction or series of
related transactions, (a) acquire any going business, division thereof, line of
business, or block of business or all or substantially all of the assets, of any
Person, whether through purchase of assets, merger or otherwise, (b) acquire
securities or other ownership interests of any Person having at least a majority
of combined voting power of the then outstanding securities or other ownership
interests of such Person (any of the transactions described in clauses (a) or
(b), an “Acquisition”), or (c) otherwise purchase, own, invest in or otherwise
acquire any Capital Stock, evidence of indebtedness or other obligation or
security or any interest whatsoever in any other Person, or make or permit to
exist any loans, advances or extensions of credit to, or any investment in cash
or by delivery of property in, any other Person, or become a partner or joint
venturer in any partnership or joint venture (collectively, including
Acquisitions, “Investments”), or make a commitment or otherwise agree to do any
of the foregoing, other than:

(i) Investments consisting of Cash Equivalents;

(ii) Investments consisting of the extension of trade credit, the creation of
prepaid expenses, the purchase of inventory, supplies, equipment and other
assets, and other Investments made in the ordinary course of business;

(iii) Investments (other than Acquisitions and Joint Ventures) by PLIC and other
Insurance Subsidiaries in compliance with all applicable regulatory
requirements;

(iv) Investments by Parent in the ordinary course of business consistent with
past practices;

(v) any Acquisition (x) to which the Required Lenders (or the Administrative
Agent on their behalf) shall have given their prior written consent (which
consent may be in their sole discretion and may be given subject to such terms
and conditions as the Required Lenders shall establish), or (y) with respect to
which all of the following conditions, as applicable, are satisfied (any
Acquisition meeting all of the applicable conditions set forth under this clause
(y), a “Permitted Acquisition”):

(A) each business acquired shall be in or related to the life and annuity sector
of the insurance business;

 

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(B) in the case of an Acquisition involving the acquisition of Capital Stock of
any Person, immediately after giving effect to such Acquisition such Person (or
the surviving Person, if the Acquisition is effected through a merger or
consolidation) shall be a Subsidiary of any Borrower;

(C) the Person to be acquired (or its board of directors or equivalent governing
body) has not either announced it will oppose such Acquisition or commenced any
action which alleges that such Acquisition violates, or will violate, any
Requirement of Law;

(D) no Default or Event of Default shall have occurred and be continuing at the
time of the consummation of such Acquisition or would exist immediately after
giving effect thereto;

(E) immediately after giving effect to such Acquisition and any Borrowings in
connection therewith, the Borrowers shall be in compliance with the financial
covenants contained in Article VI; and

(F) the sum (without duplication) of (t) the amount of cash paid as purchase
price by the Borrowers and their Subsidiaries in connection with such
Acquisition, (u) the value of all Capital Stock issued or given as purchase
price in connection with such Acquisition (as determined by the parties thereto
under the definitive acquisition agreement), (v) the amount of all Indebtedness
incurred, assumed or acquired by the Borrowers and their Subsidiaries in
connection with such Acquisition which becomes Consolidated Indebtedness
(provided that any insurance policy, annuity contract, guaranteed investment
contract, funding agreement or other insurance product obligations incurred,
ceded or assumed in a reinsurance transaction shall not be included as such
Indebtedness), (w) the amount of any Contingent Purchase Price Obligations
payable in connection with such Acquisition, as determined in good faith by the
Borrowers, (x) all amounts paid in respect of noncompetition agreements,
consulting agreements and similar arrangements entered into in connection with
such Acquisition, (y) the aggregate fair market value of all other real, mixed
or personal property paid as purchase price by the Borrowers and their
Subsidiaries in connection with such Acquisition, and (z) in the case of a
reinsurance transaction, the ceding commission or other amount by which the
liabilities transferred exceed the assets transferred (collectively, the
“Acquisition Amount”) for all Permitted Acquisitions consummated during the term
of this Agreement plus the amount of Investments (net of returns of principal)
in all Permitted Joint Ventures, shall not at any time exceed $400,000,000; and

 

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(vi) any Joint Venture (x) to which the Required Lenders (or the Administrative
Agent on their behalf) shall have given their prior written consent (which
consent may be in their sole discretion and may be given subject to such terms
and conditions as the Required Lenders shall establish), or (y) with respect to
which all of the following conditions are satisfied (any Joint Venture meeting
all of the applicable conditions set forth under this clause (y), a “Permitted
Joint Venture”):

(A) no Default or Event of Default shall have occurred and be continuing at the
time of the consummation of such Joint Venture or would exist immediately after
giving effect thereto;

(B) immediately after giving effect to such Joint Venture and any Borrowings in
connection therewith, the Borrowers shall be in compliance with the financial
covenants contained in Article VI;

(C) immediately after giving effect to such Joint Venture, the aggregate amount
of Investments by the Borrowers and their Subsidiaries in all Permitted Joint
Ventures (excluding any Joint Ventures exclusively among the Borrowers and their
Subsidiaries) would not exceed 10% of Consolidated Net Worth; and

(D) the aggregate of the amount of Investments (net of returns of principal) in
all Permitted Joint Ventures plus the Acquisition Amounts for all Permitted
Acquisitions consummated during the term of this Agreement, shall not at any
time exceed $400,000,000.

7.5 Restricted Payments. The Parent shall not, declare or pay any dividend or
other distribution on account of its equity securities or directly or
indirectly, through a subsidiary or otherwise, purchase, redeem or otherwise
acquire or retire any such equity securities if after giving effect thereto a
Default or Event of Default shall have occurred and be continuing. The Parent
will not permit any Subsidiary (other than a Subsidiary formed in connection
with a transaction of the type described in Section 7.2(c)(iii)) to enter into,
or permit to remain outstanding, any agreement prohibiting or limiting the
amount of dividends or other distributions which it may make to the holders of
its equity securities.

7.6 Transactions with Affiliates. The Borrowers shall not, and shall not suffer
or permit any Subsidiary to, enter into any transaction with any Affiliate,
except upon fair and reasonable terms no less favorable to the Borrowers and
their Subsidiaries than would obtain in a comparable arm’s-length transaction
with a third-party; provided that the PXP Spin-Off shall not be considered a
transaction with an Affiliate for purposes of this section.

7.7 Lines of Business. The Borrowers shall not, and shall not suffer or permit
any Subsidiary to, engage in any material line of business other than lines of
business in or related to the lines of business carried on by PLIC and its
Subsidiaries on the date hereof.

7.8 Pari Passu Ranking. No Borrower shall enter into any agreement or take any
other action that would cause the Obligations to rank less than pari passu with
all other senior unsecured Indebtedness of such Borrower.

 

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7.9 Accounting Changes. Each Borrower will not, nor will it permit or cause any
of its Subsidiaries to, make or permit any material change in its accounting
policies or reporting practices, except as may be permitted by GAAP or SAP, and
any such change shall be subject to Section 1.2.

ARTICLE VIII

GUARANTY

8.1 Guaranty. The Parent hereby unconditionally and irrevocably guarantees the
full and punctual payment (whether at stated maturity, upon acceleration or
otherwise) of the principal of and interest on each Loan made to PLIC pursuant
to this Agreement, and the full and punctual payment of all Obligations of PLIC
under this Agreement. Upon failure by PLIC to pay punctually any such amount,
the Parent shall forthwith on demand pay the amount not so paid at the place and
in the manner specified in this Agreement.

8.2 Guaranty Unconditional. The obligations of the Parent under this Article
VIII shall be unconditional and absolute and, without limiting the generality of
the foregoing, shall not be released, discharged or otherwise affected by:

(a) any extension, renewal, settlement, compromise, waiver or release in respect
of any obligation of PLIC under this Agreement or any Note, by operation of law
or otherwise;

(b) any modification or amendment of or supplement to this Agreement or any
Note;

(c) any release, impairment, non-perfection or invalidity of any direct or
indirect security for any obligation of PLIC under this Agreement or any Note;

(d) any change in the corporate existence, structure or ownership of PLIC or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
PLIC or their assets or any resulting release or discharge of any obligation of
PLIC contained in this Agreement or any Note;

(e) the existence of any claim, set-off or other right which the Parent may have
at any time against PLIC, the Administrative Agent, any Lender or any other
Person, whether in connection herewith or any unrelated transaction, provided
that nothing herein shall prevent the assertion of any such claim by separate
suit or compulsory counterclaim;

(f) any invalidity or unenforceability relating to or against PLIC for any
reason of this Agreement or any Note, or any provision of applicable law or
regulation purporting to prohibit the payment by PLIC of the principal of or
interest on any Loan or any other amount payable by PLIC under this Agreement;
or

(g) any other act or omission to act or delay of any kind by PLIC, the
Administrative Agent, any Lender or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of PLIC or of the Parent’s obligations as guarantor
hereunder.

 

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8.3 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances.
The Parent’s obligations as guarantor hereunder shall remain in full force and
effect until all of the Commitments shall have terminated and all Obligations
shall have been indefeasibly paid in full in cash. If at any time any payment of
principal, interest or any other amount payable by PLIC under this Agreement or
any Note is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of PLIC or otherwise, the Parent’s
obligations hereunder with respect to such payment shall be reinstated as though
such payment had been due but not made at such time.

8.4 Waiver by the Parent. The Parent irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against PLIC
or any other Person.

8.5 Subrogation. Notwithstanding any payment made by or for the account of the
Parent pursuant to this Article VIII, the Parent shall not be subrogated to any
right of the Administrative Agent or any Lender until such time as the
Administrative Agent and the Lenders shall have received final payment in cash
of the full amount of all Obligations and all of the Commitments shall have
terminated.

8.6 Stay of Acceleration. If acceleration of the time for payment of any amount
payable by PLIC under this Agreement or any Note is stayed upon the insolvency,
bankruptcy or reorganization of PLIC, all such amounts otherwise subject to
acceleration under the terms of this Agreement shall nonetheless be payable by
the Parent hereunder forthwith on demand by the Administrative Agent made at the
request of the Required Lenders.

ARTICLE IX

EVENTS OF DEFAULT

9.1 Events of Default. The occurrence of any one or more of the following events
shall constitute an “Event of Default”:

(a) Non-Payment. The Borrowers shall fail to pay when due (i) any principal of
any Loan or (ii) any interest on any Loan, any fee payable under this Agreement
or any other Credit Document, and (in the case of this clause (ii) only) such
failure shall continue for a period of five days;

(b) Specific Defaults. The Borrowers or any of their Subsidiaries shall (i) fail
to observe, perform or comply with any condition, covenant or agreement
contained in any of Sections 2.14, 5.1, 5.2(a), 5.2(c)(i), or 5.3(i) or in
Articles VI or VII or (ii) fail to observe, perform or comply with any
condition, covenant or agreement contained in Section 5.2 (other than Sections
5.2(a) and 5.2(c)(i)) and (in the case of this clause (ii) only) such failure
shall continue unremedied for a period of five Business Days after the earlier
of (y) the date on which a Responsible Officer of the Borrowers acquires
knowledge thereof and (z) the date on which written notice thereof is delivered
by the Administrative Agent or any Lender to the Borrowers;

 

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(c) Other Defaults. The Borrowers or any of their Subsidiaries shall fail to
observe, perform or comply with any condition, covenant or agreement contained
in this Agreement or any of the other Credit Documents other than those
enumerated in Sections 9.1(a) and 9.1(b), and such failure (i) by the express
terms of such Credit Document, constitutes an Event of Default, or (ii) shall
continue unremedied for any grace period specifically applicable thereto or, if
no grace period is specifically applicable, for a period of 20 days after the
earlier of (y) the date on which a Responsible Officer of the Borrowers acquires
knowledge thereof and (z) the date on which written notice thereof is delivered
by the Administrative Agent or any Lender to the Borrowers;

(d) Representations and Warranties. Any representation or warranty made or
deemed made by or on behalf of the Borrowers or any of their Subsidiaries in
this Agreement, any of the other Credit Documents or in any certificate,
instrument, report or other document furnished at any time in connection
herewith or therewith shall prove to have been incorrect, false or misleading in
any material respect as of the time made, deemed made or furnished;

(e) Cross Default. The Borrowers or any of their Subsidiaries shall (i) fail to
pay when due (whether by scheduled maturity, acceleration or otherwise and after
giving effect to any applicable grace period or notice provisions) any principal
of or interest on any Indebtedness having an aggregate principal amount of at
least (A) $10,000,000 with respect to the Parent or PLIC or (B) $5,000,000 with
respect to any Subsidiary of any Borrower or (ii) fail to observe, perform or
comply with any condition, covenant or agreement contained in any agreement or
instrument evidencing or relating to any such Indebtedness, or any other event
shall occur or condition exist in respect thereof, and the effect of such
failure, event or condition is to cause, or permit the holder or holders of such
Indebtedness (or a trustee or agent on its or their behalf) to cause (with or
without the giving of notice, lapse of time, or both), without regard to any
subordination terms with respect thereto, such Indebtedness to become due, or to
be prepaid, redeemed, purchased or defeased, prior to its stated maturity,
provided that the early termination of a Swap Contract entered into in the
ordinary course of business and not for speculation shall not be treated as
subject to this clause (ii) and, provided further that for purposes of this
Section 9.1(e), Indebtedness shall not include (x) the Indebtedness incurred
pursuant to this Agreement or (y) Indebtedness of an SPE if such Indebtedness is
non-recourse to the Borrowers and their Subsidiaries (other than the SPE) and
if, in the case of any such Indebtedness incurred in connection with a
transaction described in Section 7.2(c)(iii), any such failure to pay or perform
with respect to such Indebtedness does not materially impair any rights of PLIC
under any related reinsurance agreement;

(f) Insolvency; Voluntary Proceedings. Any Borrower or any of its Subsidiaries
shall (i) file a voluntary petition or commence a voluntary case seeking
liquidation, winding-up, reorganization, dissolution, arrangement, readjustment
of debts or any other relief under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to controvert in a timely and
appropriate manner, any petition or case of the type described in Section
9.1(g), (iii) apply for or consent to the appointment of or taking possession by
a custodian, trustee, receiver or similar official for or of itself or all or a
substantial part of its properties or assets, (iv) fail generally, or admit in
writing its inability, to pay its debts generally as they become due, (v) make a
general assignment for the benefit of creditors or (vi) take any corporate
action to authorize or approve any of the foregoing;

 

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(g) Involuntary Proceedings. Any involuntary petition or case shall be filed or
commenced against any Borrower or any of its Subsidiaries seeking liquidation,
winding-up, reorganization, dissolution, arrangement, readjustment of debts, the
appointment of a custodian, trustee, receiver or similar official for it or all
or a substantial part of its properties or any other relief under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and
unstayed for a period of 60 days; or an order, judgment or decree approving or
ordering any of the foregoing shall be entered in any such proceeding;

(h) Judgments. Any one or more money judgments, writs or warrants of attachment,
executions or similar processes involving an aggregate amount (to the extent not
paid or fully bonded or covered by insurance as to which the surety or insurer,
as the case may be, has the financial ability to perform and has not disputed
coverage) in excess of $50,000,000 shall be entered or filed against any
Borrower or any of its Subsidiaries or any of their respective properties and
the same shall not be paid, dismissed, bonded, vacated, stayed or discharged
within a period of 30 days or in any event later than five days prior to the
date of any proposed sale of such property thereunder;

(i) ERISA. Any ERISA Event (other than as set forth on Schedule 4.11) or any
other event or condition shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result thereof, together with all other ERISA
Events and other events or conditions then existing, any Borrower or Subsidiary
thereof and its ERISA Affiliates have incurred, or would reasonably be expected
to incur, liability to any one or more Plans or Multiemployer Plans or to the
PBGC (or to any combination thereof) in excess of $10,000,000;

(j) Loss of Licenses. Any one or more licenses, permits, accreditations or
authorizations of any Borrower or any Subsidiary thereof shall be suspended,
limited or terminated or shall not be renewed, or any other action shall be
taken, by any Governmental Authority in response to any alleged failure by any
Borrower or Subsidiary thereof to be in compliance with applicable Requirements
of Law, and such action, individually or in the aggregate, has or would
reasonably be expected to have a Material Adverse Effect;

(k) Environmental. Any one or more Environmental Claims shall have been asserted
against any Borrower or any Subsidiary thereof (or a reasonable basis shall
exist therefor) or any Borrower or any Subsidiary thereof shall have incurred or
would reasonably be expected to incur liability, interruption of operations or
other adverse effects as a result thereof; and such Environmental Claims,
liability or other effect, individually or in the aggregate, has or would
reasonably be expected to have a Material Adverse Effect;

(l) Change of Control. Either (i) a Person, or two or more Persons acting in
concert, shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 30% or more of the voting power of the Parent; or (ii) the
Parent shall cease to own, directly or indirectly, free and clear of all Liens
or other encumbrances, 100% of the issued and outstanding Capital Stock of each
other Borrower.

 

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9.2 Remedies: Termination of Commitments, Acceleration, etc. Upon and at any
time after the occurrence and during the continuance of any Event of Default,
the Administrative Agent shall at the direction, or may with the consent, of the
Required Lenders, take any or all of the following actions at the same or
different times:

(a) Declare the Commitments to be terminated, whereupon the same shall
terminate; provided that, upon the occurrence of a Bankruptcy Event, the
Commitments shall automatically be terminated;

(b) Declare all or any part of the outstanding principal amount of the Loans to
be immediately due and payable, whereupon the principal amount so declared to be
immediately due and payable, together with all interest accrued thereon and all
other amounts payable under this Agreement and the other Credit Documents, shall
become immediately due and payable without presentment, demand, protest, notice
of intent to accelerate or other notice or legal process of any kind, all of
which are hereby knowingly and expressly waived by the Borrowers; provided that,
upon the occurrence of a Bankruptcy Event, all of the outstanding principal
amount of the Loans and all other amounts described in this Section 9.2(b) shall
automatically become immediately due and payable without presentment, demand,
protest, notice of intent to accelerate or other notice or legal process of any
kind, all of which are hereby knowingly and expressly waived by the Borrowers;

(c) Appoint or direct the appointment of a receiver for the properties and
assets of the Borrowers and their Subsidiaries, both to operate and to sell such
properties and assets, and each Borrower, for itself and on behalf of its
Subsidiaries, hereby consents to such right and such appointment and hereby
waives any objection any Borrower or any Subsidiary may have thereto or the
right to have a bond or other security posted by the Administrative Agent on
behalf of the Lenders, in connection therewith; and

(d) Exercise all rights and remedies available to it under this Agreement, the
other Credit Documents and applicable law.

9.3 Remedies: Set-Off. Upon and at any time after the occurrence and during the
continuance of any Event of Default, each Lender and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender or any such Affiliate to or for the credit or the
account of any Borrower against any and all of the obligations of such Borrower
now or hereafter existing under this Agreement or any other Credit Document to
such Lender, including, without limitation, the obligations of the Parent under
Article VIII, irrespective of whether or not such Lender shall have made any
demand under this Agreement or any other Credit Document and although such
obligations of such Borrower may be contingent or unmatured or are owed to a
branch or office of such Lender different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of each Lender and their
respective Affiliates under this Section are in

 

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addition to other rights and remedies (including other rights of setoff) that
such Lenders or their respective Affiliates may have. Each Lender agrees to
notify the Borrowers and the Administrative Agent promptly after any such setoff
and application; provided that the failure to give such notice shall not affect
the validity of such setoff and application.

ARTICLE X

THE ADMINISTRATIVE AGENT

10.1 Appointment and Authority. Each of the Lenders hereby irrevocably appoints
Wachovia to act on its behalf as the Administrative Agent hereunder and under
the other Credit Documents and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto. The provisions of this Article
are solely for the benefit of the Administrative Agent and the Lenders, and
neither the Borrowers nor any Subsidiary thereof shall have rights as a third
party beneficiary of any of such provisions.

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

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

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

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

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

 

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The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 11.5 and 9.2) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default or Event of Default unless and
until notice describing such Default or Event of Default is given to the
Administrative Agent by the Borrowers or a Lender.

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

10.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message, internet or intranet website posting
or other distribution) believed by it to be genuine and to have been signed,
sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon. In determining compliance with any condition hereunder to
the making of a Loan that by its terms must be fulfilled to the satisfaction of
a Lender, the Administrative Agent may presume that such condition is
satisfactory to such Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrowers), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

10.5 Delegation of Duties. The Administrative Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other
Credit Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

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10.6 Resignation of Administrative Agent. The Administrative Agent may at any
time give notice of its resignation to the Lenders and the Borrowers. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrowers, to appoint a successor, which shall
be a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if the Administrative Agent shall notify the
Borrowers and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Credit
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders under any of the Credit Documents,
the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and
(2) all payments, communications and determinations provided to be made by, to
or through the Administrative Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Credit Documents (if not already discharged
therefrom as provided above in this Section). The fees payable by the Borrowers
to a successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the
other Credit Documents, the provisions of this Article and Section 11.1 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

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

10.8 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none
of the Bookrunners, Arrangers, Syndication Agent, Documentation Agent or other
agents listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Credit Documents,
except in its capacity, as applicable, as the Administrative Agent or a Lender
hereunder.

 

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ARTICLE XI

MISCELLANEOUS

11.1 Expenses; Indemnity; Damage Waiver.

(a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred
by the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent), in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Credit Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket
expenses incurred by the Administrative Agent or any Lender (including the fees,
charges and disbursements of any counsel for the Administrative Agent or any
Lender), in connection with the enforcement or protection of its rights (A) in
connection with this Agreement and the other Credit Documents, including its
rights under this Section, or (B) in connection with the Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.

(b) The Borrowers shall indemnify the Administrative Agent (and any sub-agent
thereof), each Lender, and each Related Party of any of the foregoing persons
(each such person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by the Borrowers or any Subsidiary thereof
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Credit Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan or the use or
proposed use of the proceeds therefrom, (iii) any actual or alleged presence or
release of Hazardous Substances on or from any property owned or operated by any
Borrower or Subsidiary thereof, or any Environmental Claim related in any way to
any Borrower or Subsidiary thereof, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by any Borrower or any Subsidiary thereof, and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by any Borrower or any Subsidiary thereof against an Indemnitee for
breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Credit Document, if such Borrower or such Subsidiary has obtained a final
and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction; provided further, that the Indemnitees shall, at the
request of the Borrowers, only use one counsel among them in any single matter
or related matters unless any such Indemnitee determines in its sole discretion
that its interests may differ from any other Indemnitee.

 

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(c) To the extent that any Borrower for any reason fails to indefeasibly pay any
amount required under Section 11.1(a) or Section 11.1(b) to be paid by it to the
Administrative Agent (or any sub-agent thereof) or any Related Party of any of
the foregoing, each Lender severally agrees to pay to the Administrative Agent
(or any such sub-agent) or such Related Party, as the case may be, such Lender’s
proportion (based on the percentages as used in determining the Required Lenders
as of the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the Administrative Agent (or any such
sub-agent) or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub-agent) in connection with such capacity.
The obligations of the Lenders under this Section 11.1(c) are subject to the
provisions of Section 2.3(c).

(d) To the fullest extent permitted by applicable law, no Borrower shall assert,
and each Borrower hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, any other Credit Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Loan or the use of the proceeds thereof. No Indemnitee referred to in
Section 11.1(b) shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
(including Intralinks, SyndTrak or similar systems) in connection with this
Agreement or the other Credit Documents or the transactions contemplated hereby
or thereby.

(e) All amounts due under this Section shall be payable by the Borrowers upon
demand therefor.

11.2 Governing Law; Submission to Jurisdiction; Waiver of Venue; Service of
Process.

(a) This Agreement and the other Credit Documents shall (except as may be
expressly otherwise provided in any Credit Document) be governed by, and
construed in accordance with, the law of the State of New York (including
Sections 5-1401 and 5-1402 of the New York General Obligations Law, but
excluding all other choice of law and conflicts of law rules).

(b) Each Borrower irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the courts of the State of New
York sitting in New York City and of the United States District Court for the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or any other
Credit Document, or for recognition or enforcement of any judgment, and each of
the parties hereto irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
state court or, to the fullest extent permitted by applicable law, in such
federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this

 

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Agreement or in any other Credit Document shall affect any right that the
Administrative Agent, any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Credit Document against any
Borrower or any Subsidiary thereof or its properties in the courts of any
jurisdiction.

(c) Each Borrower irrevocably and unconditionally waives, to the fullest extent
permitted by applicable law, any objection that it may now or hereafter have to
the laying of venue of any action or proceeding arising out of or relating to
this Agreement or any other Credit Document in any court referred to in
Section 11.2(b). Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, the defense of an inconvenient forum
to the maintenance of such action or proceeding in any such court.

(d) Each party hereto irrevocably consents to service of process in the manner
provided for notices in Section 11.4. Nothing in this Agreement will affect the
right of any party hereto to serve process in any other manner permitted by
applicable law.

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

11.4 Notices; Effectiveness; Electronic Communication.

(a) Except in the cases of notices and other communications expressly permitted
to be given by telephone (and except as provided in Section 11.4(b)), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows:

(i) if to the Borrowers or the Administrative Agent, to it at the address (or
telecopier number) specified for such person on Schedule 1.1(a); and

(ii) if to any Lender, to it at its address (or telecopier number) set forth in
its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in Section 11.4(b) shall be effective as provided in Section 11.4(b).

 

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(b) 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 the Administrative
Agent or any Lender pursuant to Article II. The Administrative Agent or the
Borrowers may, in their discretion, agree to accept notices and other
communications to it hereunder by electronic communication pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications. Unless the Administrative Agent
otherwise prescribes, (i) notices and other communications sent to an e-mail
address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function,
as available, return e-mail or other written acknowledgement), provided that if
such notice or other communication is not sent during the normal business hours
of the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next business day for the recipient, and
(ii) notices or other communications posted to an internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient at
its e-mail address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website address
therefor.

(c) Any party hereto may change its address or telecopier number for notices and
other communications hereunder by notice to the other parties hereto (except
that each Lender need not give notice of any such change to the other Lenders in
their capacities as such).

11.5 Amendments, Waivers, etc. No amendment, modification, waiver or discharge
or termination of, or consent to any departure by any Borrower or Subsidiary
thereof from, any provision of this Agreement or any other Credit Document shall
be effective unless in a writing signed by the Required Lenders (or by the
Administrative Agent at the direction or with the consent of the Required
Lenders), and then the same shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, modification, waiver, discharge, termination or consent shall:

(a) unless agreed to by each Lender directly affected thereby, (i) reduce or
forgive the principal amount of any Loan, reduce the rate of or forgive any
interest thereon (provided that only the consent of the Required Lenders shall
be required to waive the applicability of any post-default increase in interest
rates), or reduce or forgive any fees hereunder (other than fees payable to the
Administrative Agent or the Arranger for its own account), (ii) extend the final
scheduled maturity date or any other scheduled date for the payment of any
principal of or interest on any Loan (including any scheduled date for the
mandatory reduction or termination of any Commitments, but excluding any
mandatory prepayment of the Loans pursuant to Sections 2.6(c) and 2.6(d) or
reduction or termination of the Commitments in connection therewith), or extend
the time of payment of any fees hereunder (other than fees payable to the
Administrative Agent or the Arranger for its own account), or (iii) increase any
Commitment of any such Lender over the amount thereof in effect or extend the
maturity thereof (it being understood that a waiver of any condition precedent
set forth in Section 3.2 or of any Default or Event of Default or mandatory
reduction in the Commitments, if agreed to by the Required Lenders or all
Lenders (as may be required hereunder with respect to such waiver), shall not
constitute such an increase); or

 

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(b) unless agreed to by all of the Lenders, (i) release the Parent from its
obligations under Article VIII other than as may be otherwise specifically
provided in this Agreement, (ii) reduce the percentage of the aggregate
Commitments or of the aggregate unpaid principal amount of the Loans, or the
number or percentage of Lenders, that shall be required for the Lenders or any
of them to take or approve, or direct the Administrative Agent to take, any
action hereunder or under any other Credit Document (including as set forth in
the definition of “Required Lenders”), (iii) change any other provision of this
Agreement or any of the other Credit Documents requiring, by its terms, the
consent or approval of all the Lenders for such amendment, modification, waiver,
discharge, termination or consent, (iv) change or waive any provision of
Section 2.15, any other provision of this Agreement or any other Credit Document
requiring pro rata treatment of any Lenders, or this Section 11.5 or (v) amend,
modify or waive any condition precedent to any Borrowing set forth in
Section 3.2 (including in connection with any waiver of an existing Default or
Event of Default);

and provided further that the Fee Letter may only be amended or modified, and
any rights thereunder waived, in a writing signed by the parties thereto.

Notwithstanding the fact that the consent of all Lenders is required in certain
circumstances as set forth above, each Lender is entitled to vote as such Lender
sees fit on any bankruptcy reorganization plan that affects the Loans, and each
Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy
Code supersedes the unanimous consent provisions set forth herein.

11.6 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that neither the Borrowers nor any Subsidiary thereof
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of
Section 11.6(b), (ii) by way of participation in accordance with the provisions
of Section 11.6(d) or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of Section 11.6(e) (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in Section 11.6(d) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b) Any Lender may at any time assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments and the Loans at the time owing to it); provided that any
such assignment shall be subject to the following conditions:

 

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(i)(A) in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund,
no minimum amount need be assigned, and (B) in any case not described in
clause (A) above, the aggregate amount of the Commitment (which for this purpose
includes Loans outstanding thereunder) or, if the applicable Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $5,000,000, in any
case, treating assignments to two or more Approved Funds under common management
as one assignment for purposes of the minimum amounts, unless each of the
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, the Borrowers otherwise consent (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 Agreement
with respect to the Loan or the Commitment assigned;

(iii) no consent shall be required for any assignment except to the extent
required by clause (B) of Section 11.6(b)(i) and, in addition:

(A) the consent of the Borrowers (such consent not to be unreasonably withheld
or delayed) shall be required unless (y) an Default or Event of Default has
occurred and is continuing at the time of such assignment or (z) such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund; and

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments to a Person who is not a
Lender, an Affiliate of a Lender or an Approved Fund;

(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 for each assignment and the assignee, if it is not
a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire;

(v) no such assignment shall be made to any Borrower or any of such Borrower’s
Affiliates or Subsidiaries; and

(vi) no such assignment shall be made to a natural person.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to Section 11.6(c), from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement

 

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(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto) but shall continue to be entitled to the benefits of
Sections 2.16(a), 2.16(b), 2.17, 2.18 and 11.1 with respect to facts and
circumstances occurring prior to the effective date of such assignment. If
requested by or on behalf of the assignee, the Borrowers, at their own expense,
will execute and deliver to the Administrative Agent a new Note or Notes to the
order of the assignee (and, if the assigning Lender has retained any portion of
its rights and obligations hereunder, to the order of the assigning Lender),
prepared in accordance with the applicable provisions of Section 2.4 as
necessary to reflect, after giving effect to the assignment, the Commitments
and/or outstanding Loans, as the case may be, of the assignee and (to the extent
of any retained interests) the assigning Lender, in substantially the form of
Exhibit A. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 11.6(b) shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with Section 11.6(d).

(c) The Administrative Agent, acting solely for this purpose as an agent of the
Borrowers, shall maintain at its address for notices referred to in
Schedule 1.1(a) 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 Borrowers, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, 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
Borrowers or the Administrative Agent, sell participations to any Person (other
than a natural person, any Borrower or any of such Borrower’s Affiliates or
Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitments and/or the Loans; provided that (i) such Lender’s obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrowers, the Administrative Agent and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in Section 11.5(a) and clause (i) of
Section 11.5(b) that affects such Participant. Subject to Section 11.6(e), each
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.16(a), 2.16(b), 2.17 and 2.18 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 11.6(b).
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.3 as though it were a Lender; provided such Participant
agrees to be subject to Section 2.15(b) as though it were a Lender.

 

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(e) A Participant shall not be entitled to receive any greater payment under
Section 2.16(a), Section 2.16(b) or Section 2.17 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the Borrowers’ prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrowers are notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrowers, to
comply with Section 2.17(e) 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 Agreement (including under its Notes, 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) The words “execution,” “signed,” “signature,” and words of like import in
any Assignment and Assumption shall be deemed to include electronic signatures
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act or any state laws based on the
Uniform Electronic Transactions Act.

(h) Any Lender or participant may, in connection with any assignment,
participation, pledge or proposed assignment, participation or pledge pursuant
to this Section 11.6, disclose to the Assignee, Participant or pledgee or
proposed Assignee, Participant or pledgee any information relating to the
Borrowers and their respective Subsidiaries furnished to it by or on behalf of
any other party hereto, provided that such Assignee, Participant or pledgee or
proposed Assignee, Participant or pledgee agrees in writing to keep such
information confidential to the same extent required of the Lenders under
Section 11.11.

11.7 No Waiver. The rights and remedies of the Administrative Agent and the
Lenders expressly set forth in this Agreement and the other Credit Documents are
cumulative and in addition to, and not exclusive of, all other rights and
remedies available at law, in equity or otherwise. No failure or delay on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or be
construed to be a waiver of any Default or Event of Default. No course of
dealing between any Borrower or Subsidiary thereof, the Administrative Agent or
the Lenders or their agents or employees shall be effective to amend, modify or
discharge any provision of this Agreement or any other Credit Document or to
constitute a waiver of any Default or Event of Default. No notice to or demand
upon any Borrower or Subsidiary thereof in any case shall entitle any Borrower
or Subsidiary to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the right of the Administrative Agent or
any Lender to exercise any right or remedy or take any other or further action
in any circumstances without notice or demand.

 

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11.8 Survival. All representations, warranties and agreements made by or on
behalf of the Borrowers or their Subsidiaries in this Agreement and in the other
Credit Documents shall survive the execution and delivery hereof or thereof, the
making and repayment of the Loans. In addition, notwithstanding anything herein
or under applicable law to the contrary, the provisions of this Agreement and
the other Credit Documents relating to indemnification or payment of costs and
expenses, including, without limitation, the provisions of Sections 2.16(a),
2.16(b), 2.17, 2.18 and 11.1, shall survive the payment in full of all Loans,
the termination of the Commitments and any termination of this Agreement or any
of the other Credit Documents.

11.9 Severability. To the extent any provision of this Agreement is prohibited
by or invalid under the applicable law of any jurisdiction, such provision shall
be ineffective only to the extent of such prohibition or invalidity and only in
such jurisdiction, without prohibiting or invalidating such provision in any
other jurisdiction or the remaining provisions of this Agreement in any
jurisdiction.

11.10 Construction. The headings of the various articles, sections and
subsections of this Agreement and the table of contents have been inserted for
convenience only and shall not in any way affect the meaning or construction of
any of the provisions hereof. Except as otherwise expressly provided herein and
in the other Credit Documents, in the event of any inconsistency or conflict
between any provision of this Agreement and any provision of any of the other
Credit Documents, the provision of this Agreement shall control.

11.11 Confidentiality. Each of the Administrative Agent and the Lenders agree to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential to the same
extent required of the Administrative Agent and the Lenders hereunder), (b) to
the extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable Requirements of Law or by any subpoena or similar legal process,
(d) to any other party hereto, (e) to the extent reasonably required in
connection with the exercise of any remedies hereunder or under any other Credit
Document or any action or proceeding relating to this Agreement or any other
Credit Document or the enforcement of rights hereunder or thereunder,
(f) subject to a written agreement containing provisions substantially the same
as (but no less restrictive than) those of this Section, to (i) any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
each Borrower and its obligations, (g) with the prior written consent of the
Borrowers or (h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent, any Lender or any of their respective Affiliates on a
nonconfidential basis from a source other than any Borrower or any of its
Subsidiaries or Affiliates (provided that such source is not bound by a
confidentiality agreement with a Borrower or Subsidiary thereof with respect to
such information).

 

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

11.12 Separateness of Obligations. The Obligations with respect to each Loan,
the interest payable with respect thereto, and any fees, costs, or expenses
directly related to such Loan shall be the several Obligations of the Borrower
that borrowed such Loan, and such Obligations shall not be the joint Obligations
of any other Borrower as a co-borrower, guarantor or surety except as
specifically agreed in Article VIII hereof.

11.13 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto in different counterparts),
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement and the other Credit
Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof (except
for the Fee Letter). Except as provided in Section 3.1, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof that,
when taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.

11.14 Amendment and Restatement. This Agreement amends and restates the Prior
Credit Agreement. The Prior Credit Agreement had amended and restated the Credit
Agreement, dated as of November 22, 2004 (the “2004 Credit Agreement”), among
the Parent, PLIC, PXP, the lenders party thereto, Wachovia, as administrative
agent, The Bank of New York, as syndication agent and PNC Bank National
Association, JPMorgan Chase Bank and BMO Capital Markets Financing, Inc., as
documentation agents. All Notes issued pursuant to the 2004 Credit Agreement and
other Obligations (as such terms are defined in each of the Prior Credit
Agreement and the 2004 Credit Agreement) issued, existing or arising under such
previous agreements shall continue in full force and effect hereunder, except to
the extent amended, modified or replaced, as of the Restatement Closing Date or
thereafter, pursuant to this Agreement and the other Credit Documents.

11.15 Disclosure of Information. Each Borrower agrees and consents to the
Administrative Agent’s and the Arranger’s disclosure of information relating to
this transaction to Gold Sheets and other similar bank trade publications. Such
information will consist of deal terms and other information customarily found
in such publications.

 

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11.16 PATRIOT Act Notice. Each Lender that is subject to the PATRIOT Act and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrowers that pursuant to the requirements of the PATRIOT Act, it
is required to obtain, verify and record information that identifies each
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 PATRIOT Act.

11.17 Termination of PXP as a Borrower. Upon the satisfaction of the conditions
set forth in Section 3.1 and the effectiveness of this Agreement, (i) PXP will
have paid in full all principal, interest, fees and other amounts outstanding
under and in connection with the Prior Credit Agreement and the other Credit
Documents, (ii) the obligation of the Lenders to make Loans or otherwise extend
any additional credit to or for the benefit of PXP under the Prior Credit
Agreement and the other Credit Documents will automatically terminate and
(iii) PXP shall be released from all obligations and duties arising from or
under the Prior Credit Agreement and the other Credit Documents, other than any
obligations that may arise after the Restatement Closing Date with respect to
the indemnification, expense reimbursement and other provisions of Section 1.11
of the Prior Credit Agreement.

 

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

 

THE PHOENIX COMPANIES, INC. By:  

/s/ Daniel J. Moskey

Title:   Vice President and Treasurer PHOENIX LIFE INSURANCE COMPANY By:  

/s/ Daniel J. Moskey

Title:   Vice President and Treasurer

(signatures continued)

 

First Amended and Restated Credit Agreement   S-1   The Phoenix Companies, Inc.,
et al.    

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WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent and as a Lender

By:  

/s/ William R. Goley

Title:   Director

 

First Amended and Restated Credit Agreement   S-2   The Phoenix Companies, Inc.,
et al.    

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THE BANK OF NEW YORK,

as Syndication Agent and as a Lender

By:  

/s/ Richard G. Shaw

Title:   Vice President

 

First Amended and Restated Credit Agreement   S-3   The Phoenix Companies, Inc.,
et al.    

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BMO CAPITAL MARKETS FINANCING, INC.,

as Documentation Agent and as a Lender

By:  

/s/ Stephen Maenhout

Title:   Vice President

 

First Amended and Restated Credit Agreement   S-4   The Phoenix Companies, Inc.,
et al.    

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JPMORGAN CHASE BANK, N.A.,

as Documentation Agent and as a Lender

By:  

/s/ Lawrence Palumbo, Jr.

Title:   Vice President

 

First Amended and Restated Credit Agreement   S-5   The Phoenix Companies, Inc.,
et al.    

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PNC BANK, NATIONAL ASSOCIATION,

as Documentation Agent and as a Lender

By:   /s/ Kirk Seagers Title:   Vice President

 

First Amended and Restated Credit Agreement   S-6   The Phoenix Companies, Inc.,
et al.    

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FIFTH THIRD BANK, N.A.,

as a Lender

By:  

/s/ Garland F. Robeson

Title:   Assistant Vice President

 

First Amended and Restated Credit Agreement   S-7   The Phoenix Companies, Inc.,
et al.    

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STATE STREET BANK AND TRUST COMPANY,

as a Lender

By:  

/s/ Anne Muita

Title:   Assistant Vice President

 

First Amended and Restated Credit Agreement   S-8   The Phoenix Companies, Inc.,
et al.    

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WEBSTER BANK,

as a Lender

By:  

/s/ Lawrence Davis

Title:   Vice President

 

First Amended and Restated Credit Agreement   S-9   The Phoenix Companies, Inc.,
et al.