Exhibit 10.2

 

 

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

dated as of

October 21, 2011

among

LENNOX INTERNATIONAL INC.,

as the Borrower,

The Lenders Party Hereto

J.P.Morgan

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

as Administrative Agent,

BANK OF AMERICA, N.A. and WELLS FARGO BANK, N.A.

as Syndication Agents,

PNC BANK, NATIONAL ASSOCIATION and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

as Documentation Agents,

and

U.S. BANK NATIONAL ASSOCIATION,

as Managing Agent

 

 

J.P. MORGAN SECURITIES LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

and

WELLS FARGO SECURITIES, LLC

as Joint Lead Arrangers,

and

J.P. MORGAN SECURITIES LLC,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

and

WELLS FARGO SECURITIES, LLC,

as Joint Bookrunners

 

 

 

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Table of Contents

 

 

       Page  # 

ARTICLE I.

 

DEFINITIONS

     1   

SECTION 1.01.

 

DEFINED TERMS

     1   

SECTION 1.02.

 

CLASSIFICATION OF LOANS AND BORROWINGS

     19   

SECTION 1.03.

 

TERMS GENERALLY

     19   

SECTION 1.04.

 

ACCOUNTING TERMS; GAAP

     19   

SECTION 1.05.

 

CONVERSION OF FOREIGN CURRENCIES

     19     

(a) Dollar Equivalents

     19     

(b) Rounding-Off

     20   

ARTICLE II.

 

THE CREDITS

     20   

SECTION 2.01.

 

COMMITMENTS

     20   

SECTION 2.02.

 

LOANS AND BORROWINGS

     20     

(a) Loans Made Ratably

     20     

(b) Loan Types

     20     

(c) Minimum Amounts; Limitation on Eurodollar Borrowings

     20     

(d) Limitation on Interest Periods

     20   

SECTION 2.03.

 

REQUESTS FOR BORROWINGS

     21   

SECTION 2.04.

 

SWINGLINE LOANS

     21     

(a) Commitment

     21     

(b) Borrowing Procedure

     21     

(c) Revolving Lender Participation in Swingline Loans

     22   

SECTION 2.05.

 

LETTERS OF CREDIT

     22     

(a) General

     22     

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions

     22     

(c) Expiration Date

     23     

(d) Participations

     23     

(e) Reimbursement

     23     

(f) Obligations Absolute

     24     

(g) Disbursement Procedures

     25     

(h) Interim Interest

     25     

(i) Replacement of the Issuing Bank

     25     

(j) Cash Collateralization

     25   

SECTION 2.06.

 

FUNDING OF BORROWINGS

     26     

(a) By Lenders

     26     

(b) Fundings Assumed Made

     26   

SECTION 2.07.

 

INTEREST ELECTIONS

     26     

(a) Conversion and Continuation

     26     

(b) Delivery of Interest Election Request

     27     

(c) Contents of Interest Election Request

     27     

(d) Notice to the Lenders

     27     

(e) Automatic Conversion

     27     

(f) Limitations on Election

     27   

SECTION 2.08.

 

TERMINATION AND REDUCTION OF COMMITMENTS

     28     

(a) Termination Date

     28     

(b) Optional Termination or Reduction

     28     

(c) Notice of Termination or Reduction

     28   

SECTION 2.09.

 

REPAYMENT OF LOANS; EVIDENCE OF DEBT

     28     

(a) Promise to Pay

     28     

(b) Lender Records

     28     

(c) Administrative Agent Records

     28     

(d) Prima Facie Evidence

     29     

(e) Request for a Note

     29   

 

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SECTION 2.10.

 

PREPAYMENT OF LOANS

     29     

(a) Optional Prepayment

     29     

(b) Mandatory Prepayment of Revolving Loans

     29     

(c) Selection of Borrowing to be Prepaid

     29     

(d) Notice of Prepayment; Application of Prepayments

     29   

SECTION 2.11.

 

FEES

     30   

SECTION 2.12.

 

INTEREST

     31     

(a) ABR Borrowings

     31     

(b) Eurodollar Borrowings

     31     

(c) Swingline Borrowings

     31     

(d) Default Interest

     31     

(e) Payment of Interest

     31     

(f) Computation

     31   

SECTION 2.13.

 

ALTERNATE RATE OF INTEREST

     31   

SECTION 2.14.

 

INCREASED COSTS

     32     

(a) Change In Law

     32     

(b) Capital Adequacy

     32     

(c) Delivery of Certificate

     32     

(d) Limitation on Compensation

     33   

SECTION 2.15.

 

BREAK FUNDING PAYMENTS

     33   

SECTION 2.16.

 

TAXES

     33     

(a) Gross Up

     33     

(b) Payment of Other Taxes

     33     

(c) Tax Indemnification

     34     

(d) Receipts

     34     

(e) Status of Lenders

     34   

SECTION 2.17.

 

PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS; PROCEEDS OF
GUARANTY AGREEMENT

     36     

(a) Payments Generally

     36     

(b) Pro Rata Application

     36     

(c) Sharing of Set-offs

     37     

(d) Payments from Borrower Assumed Made

     37     

(e) Set-Off Against Amounts Owed Lenders

     37     

(f) Application of Proceeds of Guaranty Agreement

     37     

(g) Noncash Proceeds

     38     

(h) Return of Proceeds

     38     

(i) Notice of Amount of Obligations

     38   

SECTION 2.18.

 

MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS

     39     

(a) Mitigation

     39     

(b) Replacement

     39   

SECTION 2.19.

 

INCREASE OF REVOLVING COMMITMENTS

     39   

SECTION 2.20.

 

DEFAULTING LENDERS

     40     

(a) Suspension of Commitment Fees

     40     

(b) Suspension of Voting

     40     

(c) Participation Exposure

     40     

(d) Suspension of Swingline Loans

     41   

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES

     41   

SECTION 3.01.

 

ORGANIZATION; POWERS

     42   

SECTION 3.02.

 

AUTHORIZATION; ENFORCEABILITY

     42   

SECTION 3.03.

 

GOVERNMENTAL APPROVALS; NO CONFLICTS

     42   

SECTION 3.04.

 

FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE

     42   

SECTION 3.05.

 

PROPERTIES

     43   

SECTION 3.06.

 

LITIGATION AND ENVIRONMENTAL MATTERS

     43   

SECTION 3.07.

 

COMPLIANCE WITH LAWS AND AGREEMENTS

     43   

 

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SECTION 3.08.

 

INVESTMENT COMPANY STATUS

     43   

SECTION 3.09.

 

TAXES

     43   

SECTION 3.10.

 

ERISA

     44   

SECTION 3.11.

 

DISCLOSURE

     44   

SECTION 3.12.

 

MATERIAL SUBSIDIARIES

     44   

SECTION 3.13.

 

INSURANCE

     44   

SECTION 3.14.

 

LABOR MATTERS

     44   

SECTION 3.15.

 

SOLVENCY

     45   

SECTION 3.16.

 

MARGIN SECURITIES

     45   

ARTICLE IV.

 

CONDITIONS

     45   

SECTION 4.01.

 

CONDITIONS OF INITIAL CREDIT EXTENSION

     45     

(a) Execution and Delivery of This Agreement

     45     

(b) Guaranty Agreement

     45     

(c) Prior Credit Agreement

     46     

(d) Legal Opinion

     46     

(e) Corporate Authorization Documents

     46     

(f) Closing Certificate

     46     

(g) Fees

     46     

(h) Exiting Lenders

     46   

SECTION 4.02.

 

EACH CREDIT EVENT

     46     

(a) Representations and Warranties

     47     

(b) Revolving Commitments

     47     

(c) No Default

     47   

SECTION 4.03.

 

EFFECTIVE DATE ADVANCES AND ADJUSTMENTS

     47   

ARTICLE V.

 

AFFIRMATIVE COVENANTS

     47   

SECTION 5.01.

 

FINANCIAL STATEMENTS AND OTHER INFORMATION

     47     

(a) Annual Audit

     47     

(b) Quarterly Financial Statements

     48     

(c) Compliance Certificate

     48     

(d) Debt Rating

     48     

(e) Senior Unsecured Notes

     48     

(f) Additional Information

     48   

SECTION 5.02.

 

NOTICES OF MATERIAL EVENTS

     49     

(a) Default

     49     

(b) Notice of Proceedings

     49     

(c) ERISA Event

     49     

(d) Material Adverse Effect

     49   

SECTION 5.03.

 

EXISTENCE; CONDUCT OF BUSINESS

     49   

SECTION 5.04.

 

PAYMENT OF OBLIGATIONS

     49   

SECTION 5.05.

 

MAINTENANCE OF PROPERTIES

     49   

SECTION 5.06.

 

INSURANCE

     49   

SECTION 5.07.

 

GUARANTEE AND SECURE LOANS EQUALLY

     49   

SECTION 5.08.

 

BOOKS AND RECORDS; INSPECTION AND AUDIT RIGHTS

     50   

SECTION 5.09.

 

COMPLIANCE WITH LAWS

     50   

SECTION 5.10.

 

USE OF PROCEEDS

     50   

SECTION 5.11.

 

NEW MATERIAL SUBSIDIARIES

     50   

SECTION 5.12.

 

FURTHER ASSURANCES

     51   

ARTICLE VI.

 

NEGATIVE COVENANTS

     51   

SECTION 6.01.

 

INDEBTEDNESS; CERTAIN EQUITY SECURITIES

     51   

SECTION 6.02.

 

LIENS

     52   

SECTION 6.03.

 

FUNDAMENTAL CHANGES

     53   

SECTION 6.04.

 

INVESTMENTS, LOANS, ADVANCES AND ACQUISITIONS

     54   

SECTION 6.05.

 

ASSET SALES

     55   

 

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SECTION 6.06.

 

SALE AND LEASEBACK TRANSACTIONS

     56   

SECTION 6.07.

 

SWAP AGREEMENTS

     57   

SECTION 6.08.

 

RESTRICTED PAYMENTS

     57   

SECTION 6.09.

 

TRANSACTIONS WITH AFFILIATES

     57   

SECTION 6.10.

 

RESTRICTIVE AGREEMENTS

     57   

SECTION 6.11.

 

AMENDMENT OF MATERIAL DOCUMENTS

     58   

SECTION 6.12.

 

CHANGE IN FISCAL YEAR

     58   

ARTICLE VII.

 

FINANCIAL COVENANTS

     58   

SECTION 7.01.

 

LEVERAGE RATIO

     58   

SECTION 7.02.

 

INTEREST COVERAGE RATIO

     58   

ARTICLE VIII.

 

EVENTS OF DEFAULT

     59   

SECTION 8.01.

 

EVENTS OF DEFAULT; REMEDIES

     59     

(a) Principal Payments

     59     

(b) Interest, Fees, and other Payments

     59     

(c) Representations or Warranties

     59     

(d) Covenant Violation; Immediate Default

     59     

(e) Covenant Violation with Cure Period

     59     

(f) Cross Payment Default

     59     

(g) Cross Covenant Default

     60     

(h) Involuntary Bankruptcy

     60     

(i) Voluntary Bankruptcy

     60     

(j) Other Insolvency

     60     

(k) Judgments

     60     

(l) ERISA Event

     60     

(m) Invalidity of Loan Documents

     60     

(n) Change in Control

     60   

SECTION 8.02.

 

PERFORMANCE BY THE ADMINISTRATIVE AGENT

     61   

SECTION 8.03.

 

LIMITATION ON SEPARATE SUIT

     61   

ARTICLE IX.

 

THE ADMINISTRATIVE AGENT

     61   

SECTION 9.01.

 

APPOINTMENT

     61   

SECTION 9.02.

 

RIGHTS AS A LENDER

     61   

SECTION 9.03.

 

LIMITATION OF DUTIES AND IMMUNITIES

     62   

SECTION 9.04.

 

RELIANCE ON THIRD PARTIES

     62   

SECTION 9.05.

 

SUB-AGENTS

     62   

SECTION 9.06.

 

SUCCESSOR AGENT

     62   

SECTION 9.07.

 

INDEPENDENT CREDIT DECISIONS

     63   

SECTION 9.08.

 

OTHER AGENTS

     63   

SECTION 9.09.

 

POWERS AND IMMUNITIES OF ISSUING BANK

     63   

SECTION 9.10.

 

AUTHORIZED RELEASE OF SUBSIDIARY GUARANTOR

     64   

SECTION 9.11.

 

LENDER AFFILIATES RIGHTS

     64   

SECTION 9.12.

 

RESIGNATION OF BANK OF AMERICA, N.A

     64   

ARTICLE X.

 

MISCELLANEOUS

     64   

SECTION 10.01.

 

NOTICES

     64   

SECTION 10.02.

 

WAIVERS; AMENDMENTS

     65     

(a) No Waiver; Rights Cumulative

     65     

(b) Amendments

     65   

SECTION 10.03.

 

ExpENSES; INDEMNITY; DAMAGE WAIVER

     66     

(a) Expenses

     66     

(b) Indemnity

     66     

(c) Lender’s Agreement to Pay

     67     

(d) Waiver of Damages

     67     

(e) Payment

     68   

 

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SECTION 10.04.

 

SUCCESSORS AND ASSIGNS

     68     

(a) Successors and Assigns

     68     

(b) Assignment

     68     

(c) Participations

     70     

(d) Pledge

     70   

SECTION 10.05.

 

SURVIVAL

     70   

SECTION 10.06.

 

COUNTERPARTS; INTEGRATION; EFFECTIVENESS; AMENDMENT AND RESTATEMENT

     70   

SECTION 10.07.

 

SEVERABILITY

     71   

SECTION 10.08.

 

RIGHT OF SETOFF

     71   

SECTION 10.09.

 

GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS

     71     

(a) Governing Law

     71     

(b) Jurisdiction

     71     

(c) Venue

     72     

(d) Service of Process

     72   

SECTION 10.10.

 

WAIVER OF JURY TRIAL

     72   

SECTION 10.11.

 

HEADINGS

     72   

SECTION 10.12.

 

CONFIDENTIALITY

     72   

SECTION 10.13.

 

MAXIMUM INTEREST RATE

     73     

(a) Limitation to Maximum Rate; Recapture

     73     

(b) Cure Provisions

     74   

SECTION 10.14.

 

NO DUTY

     74   

SECTION 10.15.

 

NO FIDUCIARY RELATIONSHIP

     74   

SECTION 10.16.

 

EQUITABLE RELIEF

     74   

SECTION 10.17.

 

CONSTRUCTION

     74   

SECTION 10.18.

 

INDEPENDENCE OF COVENANTS

     75   

SECTION 10.19.

 

USA PATRIOT ACT

     75   

SECTION 10.20.

 

JUDGMENT CURRENCY

     75   

 

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LIST OF SCHEDULES AND EXHIBITS

 

SCHEDULES:

Schedule 1.01

     –      

Existing Letters of Credit

Schedule 2.01

     –      

Commitments

Schedule 3.12

     –      

Material Subsidiaries

Schedule 6.01

     –      

Existing Indebtedness

Schedule 6.02

     –      

Existing Liens

Schedule 6.04

     –      

Existing Investments

Schedule 6.10

     –      

Existing Restrictions

EXHIBITS:

     

Exhibit A

     –      

Form of Assignment and Assumption

Exhibit B

     –      

Form of Compliance Certificate

Exhibit C

     –      

Form of Guaranty Agreement (Material Subsidiaries)

Exhibit D

     –      

Form of Increased Commitment Supplement

Exhibit E

     –      

Form of Borrowing Request

Exhibit F

     –      

Form of Interest Election Request

LIST OF SCHEDULES AND EXHIBITS, Solo Page

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FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT dated as of
October 21, 2011, among LENNOX INTERNATIONAL INC., a Delaware corporation, the
LENDERS party hereto, and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as
Administrative Agent.

W I T N E S S E T H

A. The Borrower, Bank of America, N.A., as administrative agent, and certain
lenders entered into that certain Third Amended and Restated Revolving Credit
Facility Agreement dated as of October 12, 2007 (as amended by that certain
First Amendment to Third Amended and Restated Revolving Credit Facility
Agreement dated as of February 22, 2010, the “Prior Credit Agreement”).

B. The Borrower and the other Loan Parties have requested that the Prior Credit
Agreement be amended to, among other things, extend the Revolving Maturity Date.
The parties have agreed to amend and restate the Prior Credit Agreement on the
terms and conditions set forth herein.

C. Contemporaneously with the execution of this Agreement, RBS Citizens, N.A.
and UBS Loan Finance LLC shall assign all of their interests as Lenders under
the Prior Credit Agreement to JPMorgan Chase Bank, National Association pursuant
to those certain Assignment and Assumption Agreements dated as of the date
hereof.

D. Pursuant to their execution of this Agreement, Branch Banking and Trust
Company, Fifth Third Bank, and Morgan Stanley Bank, N.A. are becoming Lenders
hereunder.

E. Bank of America, N.A. is hereby resigning as the administrative agent under
the Prior Credit Agreement. As a result, the Loan Parties have requested that
Bank of America, N.A. assign all of its right, title and interest as the
“Administrative Agent” and “Swingline Lender” under the Prior Credit Agreement
and the “Loan Documents” (as defined in the Prior Credit Agreement) to JPMorgan
Chase Bank, National Association in connection with the execution of this
Agreement.

The parties hereto agree as follows:

ARTICLE I.

Definitions

Section 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.

“Adjusted EBITDA” means, for any period (the “Subject Period”), the total of the
following calculated without duplication for such period: (a) Borrower’s EBITDA;
plus (b), on a pro forma basis, the pro forma EBITDA of each Prior Target or, as
applicable, the EBITDA of a Prior Target attributable to the assets acquired
from such Prior Target, for any portion of such Subject Period occurring prior
to the date of the acquisition of such Prior Target or the related assets but
only to the extent such EBITDA for such Prior Target can be established in a
manner reasonably satisfactory to the Administrative Agent based on financial
statements of the Prior Target prepared in accordance with GAAP; minus (c) the
EBITDA of each Prior Company and, as applicable but without duplication, the
EBITDA of Borrower and each Subsidiary attributable to all Prior Assets, in each
case for any portion of such Subject Period occurring prior to the date of the
disposal of such Prior Companies or Prior Assets.

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 1

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“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period or with respect to the determination of the Alternate Base Rate
and the Eurodollar Daily Floating Rate, an interest rate per annum equal to
(a) the LIBO Rate for such Interest Period or, with respect to the determination
of the Alternate Base Rate and the Eurodollar Daily Floating Rate, for a one
month interest period multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMorgan Chase Bank, National Association, in its
capacity as administrative agent for the Lenders hereunder.

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

“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.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 0.5% and (c) the Adjusted LIBO Rate for a one
month interest period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted LIBO Rate shall be effective from and including the effective date of
such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted
LIBO Rate, respectively.

“Applicable Percentage” means, with respect to any Revolving Lender, the
percentage of the total Revolving Commitments represented by such Lender’s
Revolving Commitment; provided that, in accordance with Section 2.20, so long as
any Lender shall be a Defaulting Lender, such Defaulting Lender’s Commitment
shall be disregarded in the foregoing calculations. If the Revolving Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Revolving Commitments most recently in effect, giving effect to any
assignments.

“Applicable Rate” means, for any day, with respect to any ABR Loan (including
any Swingline Loan bearing interest at the Alternate Base Rate), any Eurodollar
Loan, any Swingline Loan bearing interest at the Eurodollar Daily Floating Rate,
or with respect to the commitment fees payable hereunder, as the case may be,
the applicable rate per annum set forth below under the caption “ABR Spread”,
“Eurodollar Spread”, “Eurodollar Daily Swingline Spread” or “Commitment Fee
Rate”, as the case may be, based upon the Leverage Ratio as of the most recent
determination date:

 

Leverage Ratio

   ABR
Spread     Eurodollar
Spread     Eurodollar
Daily  Swingline
Spread     Commitment
Fee Rate  

Category 1

> 3.00 to 1.0

     1.00 %      2.00 %      2.00 %      0.35 % 

Category 2

£ 3.00 to 1.0 but

> 2.50 to 1.0

     0.75 %      1.75 %      1.75 %      0.30 % 

Category 3

£ 2.50 to 1.0 but

> 2.00 to 1.0

     0.50 %      1.50 %      1.50 %      0.25 % 

Category 4

£ 2.00 to 1.0 but

> 1.50 to 1.0

     0.25 %      1.25 %      1.25 %      0.20 % 

Category 5

£ 1.50 to 1.0

     0.00 %      1.00 %      1.00 %      0.15 % 

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 2

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For purposes of the foregoing, (i) the Leverage Ratio shall be determined as of
the end of each fiscal quarter of the Borrower’s fiscal year based upon the
Borrower’s consolidated financial statements delivered pursuant to
Section 5.01(a) or (b); provided that until the delivery to the Administrative
Agent of the Borrower’s consolidated financial statements for the fiscal quarter
ending September 30, 2011 pursuant to Section 5.01(b), the “Applicable
Rate” shall be the applicable rate per annum set forth in Category 3 and
(ii) each change in the Applicable Rate resulting from a change in the Leverage
Ratio shall be effective during the period commencing on and including the date
of delivery to the Administrative Agent of such consolidated financial
statements indicating such change and ending on the date immediately preceding
the effective date of the next such change; provided that the Leverage Ratio
shall be deemed to be in Category 1 (A) at any time that an Event of Default has
occurred and is continuing or (B) at the option of the Administrative Agent or
at the request of the Required Lenders if the Borrower fails to deliver the
consolidated financial statements required to be delivered by it pursuant to
Section 5.01(a) or (b), during the period from the expiration of the time for
delivery thereof until such consolidated financial statements are delivered. If
it is ever subsequently determined that such financial statements did not
accurately report as of the date of such financial statements the information
necessary to determine the Leverage Ratio and as a result thereof the Leverage
Ratio utilized to determine the Applicable Rate was not correct and resulted in
(i) the Applicable Rate being otherwise lower than it should have been if the
Leverage Ratio was accurately determined, then the Borrower shall pay to the
Administrative Agent the amount that would have been due under the terms hereof
if the Leverage Ratio was calculated correctly or (ii) the Applicable Rate being
otherwise higher than it should have been if the Leverage Ratio was accurately
determined, then the Borrower shall receive a credit equal to the amount of the
overpayment to be applied to future Obligations. A certificate of the
Administrative Agent setting forth the amount or amounts (including a reasonably
detailed calculation thereof) of any such difference shall be delivered to the
Borrower and the Borrower shall pay the Administrative Agent the amount shown as
due on any such certificate within 30 days after receipt thereof.

“Approved Fund” has the meaning assigned to such term in Section 10.04.

“Assignment and Assumption” means an Assignment and Assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 10.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business, appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, provided, further, that
such ownership interest does not result in or provide such Person with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Person (or such
Governmental Authority or instrumentality), to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

 

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

“Borrower” means Lennox International Inc., a Delaware corporation.

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

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City and Dallas, Texas are authorized or
required by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

“Capital Expenditures” means, for any period and a Person, the additions to
property, plant and equipment and other capital expenditures of such Person and
its consolidated subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of such Person for such period prepared in accordance
with GAAP.

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

“Change in Control” means the acquisition by any New Owner of beneficial
ownership of 40% or more of the outstanding shares of common stock of the
Borrower entitled to vote for members of the board of directors of the Borrower.
As used in this definition,

“Norris Family” means all Persons who are lineal descendants of D.W. Norris (by
birth or adoption), all spouses of such descendants, all estates of such
descendants or spouses which are in the course of administration, all trusts for
the benefit of such descendants or spouses, and all corporations or other
entities in which, directly or indirectly, such descendants or spouses (either
alone or in conjunction with other such descendants or spouses) have the right,
whether by ownership of stock or other Equity Interests or otherwise, to direct
the management and policies of such corporations or other entities (each such
person, spouse, estate, trust, corporation or entity being referred to herein as
a “member” of the Norris Family).

“New Owner” means any Person (other than a member of the Norris Family), or any
syndicate or group of Persons (exclusive of all members of the Norris Family)
which would be deemed a Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof), who directly or indirectly acquires
shares in the Borrower.

 

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“Change in Law” means (a) the adoption of any law, rule, regulation or treaty
(including any rules or regulations issued under or implementing any existing
law) after the date of this Agreement, (b) any change in any law, rule,
regulation or treaty or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance by any
Lender or the Issuing Bank (or, for purposes of Section 2.14(b), by any lending
office of such Lender or by such Lender’s or the Issuing Bank’s holding company,
if any) with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement; provided that notwithstanding anything herein to the contrary,
(i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder, issued in connection
therewith or in implementation thereof, and (ii) all requests, rules, guidelines
and directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States or foreign regulatory authorities, in each case pursuant to
Basel III, shall in each case be deemed to be a “Change in Law”, regardless of
the date enacted, adopted, issued or implemented.

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

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Commitments” means the Revolving Commitment and the commitment of the Swingline
Lender to make Swingline Loans.

“Consolidated Net Income” means, for any period, the net income (or net loss) of
the Borrower and its Subsidiaries for such period, determined in accordance with
GAAP.

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

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
Swingline Loans or (iii) pay over to any Loan Party any other amount required to
be paid by it hereunder, unless, in the case of clause (i) above, such Lender
notifies the Administrative Agent in writing that such failure is the result of
such Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular Default, if any) has not
been satisfied; (b) has notified the Borrower or any Loan Party in writing, or
has made a public statement, to the effect that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent to funding a
Revolving Loan under this Agreement (specifically identified and including the
particular Default, if any) cannot be satisfied) or generally under other
agreements in which it commits to extend credit, (c) has failed, within three
Business Days after request by a Loan Party, acting in good faith, to provide a
certification in writing from an authorized officer of such Lender that it will
comply with its obligations to fund prospective Loans and participations in then
outstanding Letters of Credit and Swingline Loans under this Agreement, provided
that such Lender shall cease to be a Defaulting Lender pursuant to this clause
(c) upon such Loan Party’s receipt of such certification in form and substance
satisfactory to it and the Administrative Agent, or (d) has become the subject
of a Bankruptcy Event.

 

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“Deposit Obligations” means all obligations, indebtedness, and liabilities of
the Borrower or any Subsidiaries, or any one of them, to any Lender or any
Affiliate of any Lender arising pursuant to any deposit, lock box, automated
clearing house or cash management arrangements entered into by any Lender or any
Affiliate of any Lender with the Borrower or any Subsidiaries, whether now
existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, including the obligation, indebtedness, and liabilities of the Borrower
or any Subsidiaries, or any one of them, to repay any credit extended in
connection with such arrangements, interest thereon, and all fees, costs, and
expenses (including attorneys’ fees and expenses) provided for in the
documentation executed in connection therewith.

“Disclosed Matters” means all the matters disclosed in the Borrower’s reports to
the Securities and Exchange Commission on Form 10-Q for the quarterly period
ended June 30, 2011, on any Form 8-K filed after the Form 10-Q for the quarterly
period ended June 30, 2011 but before the Effective Date, and on Form 10-K for
the fiscal year ended December 31, 2010.

“Dollars”, “dollars” or “$” refers to lawful money of the United States of
America.

“Dollar Amount” means, as of any date of determination, (a) in the case of any
amount denominated in Dollars, such amount, and (b) in the case of any amount
denominated in another currency, the amount of Dollars which is equivalent to
such amount of other currency as of such date, determined by using the Spot Rate
on the date two (2) Business Days prior to such date or on such other date as
may be requested by the Borrower and approved by the Administrative Agent.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States of America, any state thereof or the District of Columbia.

“EBITDA” means, for any period, the total of the following calculated for
Borrower and its Subsidiaries without duplication on a consolidated basis in
accordance with GAAP consistently applied for such period: (a) Consolidated Net
Income; plus (b) without duplication and to the extent deducted in determining
Consolidated Net Income for such period, the sum of: (i) income and franchise
taxes, (ii) Interest Expense, (iii) amortization and depreciation expense,
(iv) non-cash charges resulting from the application of GAAP that requires a
charge against earnings for the impairment of assets (including goodwill),
(v) any non-cash expenses that arose in connection with the grant of stock
options or other equity based awards to officers, directors, consultants, and
employees of the Borrower and its Subsidiaries, (vi) any non-recurring charges
which relate to the discontinuance of Subsidiary operations, (vii) any
non-recurring charges which relate to restructuring and severance activities;
provided, that the total cash amount of such charges shall not exceed
$15,000,000 during any four fiscal quarter period (not taking into account any
cash charges under (viii) below), (viii) any non-recurring charges which relate
to the refinance of the lease of the Borrower’s headquarters building located at
2140 Lake Park Blvd., Richardson, Texas (the “Synthetic Lease”); provided, that
the total cash amount of such charges shall not exceed $15,000,000 during the
term of this Agreement, (ix) any non-cash loss (or minus any gain) associated
with the sale of assets not in the ordinary course of business,
(x) extraordinary loss or other items (or minus any extraordinary gain or
income), (xii) any non-cash loss (or minus any non-cash gain) related to
financial instrument hedges (other than foreign currency hedges), and (xiii) the
cumulative non-cash effects of changes in accounting policies; minus (c) cash
payments made in such period related to a non-cash expense (other than with
respect to restructuring activities) added to Consolidated Net Income in a
previous period.

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 10.02).

 

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

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

“Equity Interests” means shares of the capital stock, partnership interests,
membership interest in a limited liability company, beneficial interests in a
trust or other equity interests or any warrants, options or other rights to
acquire such interests.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

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

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the failure of any Plan
to satisfy the “minimum funding standards” in any respect (as described in
Sections 412 or 430 of the Code or Section 302 of ERISA), determined without
regard to whether any such contribution required under the Code or ERISA has or
has not been waived by the Internal Revenue Service; (c) the filing pursuant to
Section 412 of the Code or Section 303 of ERISA of an application for a waiver
of the minimum funding standard with respect to any Plan; (d) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

“euro” or “Euro” means the single currency of the Participating Member States.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate but not including any
Loan or Borrowing bearing interest at a rate determined by reference to
(a) clause (c) of the definition of the term “Alternate Base Rate” or (b) the
term “Eurodollar Daily Floating Rate”.

 

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“Eurodollar Daily Floating Rate” means, for any day, the daily fluctuating rate
per annum equal to the Adjusted LIBO Rate for a one month interest period. Any
change in the Eurodollar Daily Floating Rate due to a change in the LIBO Rate
shall be effective from and including the effective date of such change in the
LIBO Rate.

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

“Excluded Foreign Subsidiary” means any Foreign Subsidiary in respect of which
the guaranteeing of the Obligations would result in an adverse tax consequence
to the Borrower.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) taxes imposed on (or
measured by) its net overall income (however denominated) and franchise taxes
imposed on such Lender or other recipient by the United States of America, or by
the jurisdiction under the laws of which such recipient is organized or in which
its principal office is located or, in the case of any Lender, in which its
applicable lending office is located or by any other jurisdiction as a result of
any other present or former connection between such recipient and such
jurisdiction (other than any connection arising from the execution, delivery or
performance of any Loan Documents), (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction in
which the Borrower is located, (c) in the case of a Lender (other than an
assignee pursuant to a request by the Borrower under Section 2.18(b)), any
United States federal withholding tax that is imposed on amounts payable to such
Lender at the time such Lender becomes a party to this Agreement or designates a
new lending office, except to the extent that the Lender (or its assignor, in
the case of assignment) was entitled at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.16(a), (d) any United
States federal withholding tax that would not have been imposed but for the
Recipient’s failure to comply with Section 2.16(e); and (e) any United States
federal withholding tax that would not have been imposed but for a failure by
such Recipient to comply with the applicable requirements of FATCA.

“Existing Letters of Credit” means the letters of credit issued for the account
of the Borrower or a Subsidiary outstanding on the Effective Date and described
on Schedule 1.01.

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

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding 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 (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

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

 

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“Foreign Subsidiary” means any Subsidiary that is organized under the laws of a
jurisdiction other than the United States of America or any State thereof or the
District of Columbia.

“Fully Satisfied” or “Full Satisfaction” means, as of any date, that on or
before such date:

(a) with respect to the Loan Obligations: (i) the principal of and interest
accrued to such date on the Loan Obligations (other than the contingent LC
Exposure) shall have been paid in full in cash, (ii) all fees, expenses and
other amounts then due and payable which constitute Loan Obligations (other than
the contingent LC Exposure and other contingent amounts not then liquidated)
shall have been paid in full in cash, (iii) the Commitments shall have expired
or irrevocably been terminated, and (iv) the contingent LC Exposure shall have
been secured by: (A) the grant of a first priority, perfected Lien on cash or
cash equivalents in an amount at least equal to 105% of the amount of such LC
Exposure or other collateral which is reasonably acceptable to the Issuing Bank
or (B) the issuance of a letter of credit in form and substance reasonably
acceptable to the Issuing Bank with an original face amount at least equal to
105% of the amount of such LC Exposure;

(b) with respect to the Swap Obligations (i) all termination payments, fees,
expenses and other amounts then due and payable under the related Swap
Agreements which constitute Swap Obligations shall have been paid in full in
cash; and (ii) all contingent amounts which could be payable under the related
Swap Agreements shall have been secured by: (A) the grant of a first priority,
perfected Lien on cash or cash equivalents in an amount at least equal to 105%
of the amount of such contingent Swap Obligations or other collateral which is
reasonably acceptable to the Lender or Affiliate of a Lender holding the
applicable Swap Obligations or (B) the issuance of a letter of credit in form
and substance reasonably acceptable to the Lender or Affiliate of a Lender
holding the applicable Swap Obligations and in an amount at least equal to 105%
of the amount of such contingent Swap Obligations; and

(c) with respect to the Deposit Obligations: (i) all fees, expenses and other
amounts then due and payable which constitute Deposit Obligations shall have
been paid in full in cash, (ii) any further commitments to extend credit in
connection with such Deposit Obligations shall have expired or irrevocably been
terminated or reasonably satisfactory arrangements to secure the same shall be
made with the depository bank, and (iii) all contingent amounts which could be
payable in connection with the Deposit Obligations shall have been secured by:
(A) the grant of a first priority, perfected Lien on cash or cash equivalents in
an amount at least equal to 105% of the amount of such contingent Deposit
Obligations or other collateral which is acceptable to the Lender or Affiliate
of a Lender holding the applicable Deposit Obligations or (B) the issuance of a
letter of credit in form and substance reasonably acceptable to the Lender or
Affiliate of a Lender holding the applicable Deposit Obligations and in an
amount at least equal to 105% of the amount of such contingent Deposit
Obligations.

“GAAP” means generally accepted accounting principles in the United States of
America.

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank) and any group or body charged with setting financial accounting or
regulatory capital rules or standards (including the Financial Accounting
Standards Board, the Bank for International Settlements or the Basel Committee
on Banking Supervision or any successor or similar authority to any of the
foregoing).

 

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“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation (including any
obligations under an operating lease) of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation (including any obligations under an operating
lease) of the payment thereof, (c) to maintain working capital, equity capital
or any other financial statement condition or liquidity of the primary obligor
so as to enable the primary obligor to pay such Indebtedness or other obligation
or (d) as an account party in respect of any letter of credit or letter of
guaranty issued to support such Indebtedness or obligation; provided, that the
term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

“Guaranty Agreement” means the Fourth Amended and Restated Subsidiary Guaranty
Agreement executed by the Subsidiary Guarantors dated as of the date hereof,
substantially in the form of Exhibit C hereto.

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

“Increase Amount” has the meaning assigned to such term in Section 2.19.

“Increased Commitment Supplement” has the meaning specified in Section 2.19.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind (including the Receivable Securitization Outstandings); (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments;
(c) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person; (d) all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding accounts payable incurred in the ordinary course of
business); (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed; (f) all Guarantees by such
Person; (g) all Capital Lease Obligations of such Person; (h) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty (but excluding obligations in respect
of (1) trade or commercial letters of credit issued for the account of such
Person in the ordinary course of business and (2) stand-by letters of credit
issued to support obligations of such Person that are not of the type described
in any of clauses (a) through (g) and (i) through (k) of this definition);
(i) all obligations, contingent or otherwise, of such Person in respect of
bankers’ acceptances; (j) all obligations of such Person under any Swap
Agreement; and (k) all obligations of such Person to pay rent or other amounts
under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which lease is required or is
permitted to be classified and accounted for as an operating lease under GAAP
but which is intended by the parties thereto for tax, bankruptcy, regulatory,
commercial law, real estate law and all other purposes as a financing
arrangement. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is

 

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liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. The amount of the
obligations of the Borrower or any Subsidiary in respect of any Swap Agreement
shall, at any time of determination and for all purposes under this Agreement,
be the maximum aggregate amount (giving effect to any netting agreements) that
the Borrower or such Subsidiary would be required to pay if such Swap Agreement
were terminated at such time giving effect to current market conditions
notwithstanding any contrary treatment in accordance with GAAP.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Information Memorandum” means the Confidential Information Memorandum dated
September 28, 2011 relating to the Borrower and the Transactions.

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.07.

“Interest Expense” means the sum of the following calculated on a consolidated
basis without duplication in accordance with GAAP: (a) total interest expense
(excluding interest expense derived from amortization of fees and including any
interest expense attributable to any Receivable Securitization Facility); plus
(b) that portion of amounts paid under synthetic lease obligations that is
representative of the interest expense that would have been paid if such
transaction were accounted for as a capital lease or otherwise as a financing.

“Interest Payment Date” means (a) with respect to any ABR Loan and any Swingline
Loan, the last day of each March, June, September and December, and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period.

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending seven days or one, two,
three or six months thereafter, in each case, as the Borrower may elect,
provided, that (y) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (z) any Interest Period (other than a seven day
Interest Period) that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Issuing Bank” means, collectively, each of JPMorgan Chase Bank, National
Association, Bank of America, N.A. and Wells Fargo Bank, N.A., in its capacity
as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.05(i), and each bank which has issued an
Existing Letter of Credit solely with respect to such Existing Letter of Credit.
The Issuing Bank may, in its discretion, arrange for one or more Letters of
Credit to be issued by Affiliates of the Issuing Bank, in which case the term
“Issuing Bank” shall include any such Affiliate with respect to Letters of
Credit issued by such Affiliate. Neither Bank of America, N.A. nor Wells Fargo
Bank, N.A. has any obligation to issue any Letter of Credit hereunder.

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

 

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“LC Exposure” means, at any time, without duplication, the sum of (a) the
aggregate undrawn Dollar Amount of all outstanding Letters of Credit at such
time plus (b) the aggregate Dollar amount of all LC Disbursements that have not
yet been reimbursed by or on behalf of the Borrower at such time. The LC
Exposure of any Revolving Lender at any time shall be its Applicable Percentage
of the total LC Exposure at such time.

“Lenders” means (a) for all purposes, the Persons listed on Schedule 2.01 and
any other Person that shall have become a party hereto pursuant to an Increased
Commitment Supplement or an Assignment and Assumption, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and Assumption
or otherwise and (b) for purposes of the definitions of “Swap Obligations” and
“Secured Parties” only, shall include any Person who was a Lender at the time a
Swap Agreement was entered into by one or more of the Loan Parties, even though,
at a later time of determination, such Person no longer holds any Commitments or
Loans hereunder. Unless the context otherwise requires, the term “Lenders”
includes the Swingline Lender. As a result of clause (b) of this definition, the
Swap Obligations owed to a Lender or its Affiliates shall continue to be “Swap
Obligations”, entitled to share in the benefits of the Guaranty Agreement as
herein provided, even though such Lender ceases to be a party hereto pursuant to
an Assignment and Assumption or otherwise.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement.

“Leverage Ratio” means the ratio of Total Indebtedness to Adjusted EBITDA, as
calculated in accordance with Section 7.01.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor
or substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period. For
purposes of determining the Alternate Base Rate or the Eurodollar Daily Floating
Rate, the LIBO Rate for any day shall be based on the rate appearing on the
Reuters Screen LIBOR01 Page (or on any successor or substitute page) at
approximately 11:00 a.m. London time on such day (without any rounding) for a
one month interest period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

“Loan Documents” means this Agreement, the Guaranty Agreement, and all other
certificates, agreements and other documents or instruments now or hereafter
executed and/or delivered pursuant to or in connection with the foregoing.

 

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“Loan Obligations” means all obligations, indebtedness, and liabilities of the
Borrower or any Subsidiaries, or any one of them, to the Administrative Agent
and the Lenders arising pursuant to any of the Loan Documents, whether now
existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, including the obligation of the Borrower or any Subsidiaries to repay
the Loans, the LC Disbursements, interest on the Loans and LC Disbursements, and
all fees, costs, and expenses (including attorneys’ fees and expenses) provided
for in the Loan Documents.

“Loan Parties” means the Borrower and the Subsidiary Guarantors.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

“Material Adverse Effect” means a material adverse effect on (a) the business,
operations, affairs, financial condition, assets or properties of the Borrower
and the Subsidiaries taken as a whole, (b) the ability of any Loan Party to
perform its obligations under the Loan Documents to which it is a party or
(c) the rights of or benefits available to the Administrative Agent, the Issuing
Bank, or any Lender.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit but including Receivable Securitization Outstandings and obligations in
respect of one or more Swap Agreements) of any one or more of the Borrower and
its Subsidiaries in an aggregate principal amount exceeding $75,000,000.

“Material Subsidiary” means any Subsidiary of the Borrower (except LPAC Corp.,
Lake Park Insurance, Ltd., and any Excluded Foreign Subsidiary), the book value
(as determined in accordance with GAAP) of whose total assets equals or exceeds
ten percent (10%) of the book value (determined in accordance with GAAP) of the
consolidated total assets of the Borrower and all of its Subsidiaries as
determined as of the last day of each fiscal quarter of the Borrower.

“Maximum Rate” has the meaning assigned to such term in Section 10.13(a).

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.

“New Lender” has the meaning assigned to such term in Section 2.19.

“Obligations” means all Loan Obligations, the Swap Obligations and all Deposit
Obligations.

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

“Participant” has the meaning set forth in Section 10.04.

“Participating Member State” means any member state of the European Communities
that adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Community relating to Economic and Monetary Union.

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

“Permitted Encumbrances” means:

 

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(a) Liens imposed by law for taxes that are not yet due or are being contested
in compliance with Section 5.04;

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 60 days or are being
contested in compliance with Section 5.04;

(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation and other casualty-related insurance programs,
unemployment insurance, employer’s health tax, other social security laws or
regulations, or retirement benefits (including, pledges or deposits or similar
Liens securing liabilities to insurance carriers under insurance or
self-insurance arrangements in the ordinary course);

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

(e) judgment Liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VIII;

(f) easements, zoning restrictions, leases or subleases granted to others in the
ordinary course of business and covering only the assets so leased,
rights-of-way, restrictive covenants, and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure
any monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;

(g) Liens arising from filing UCC financing statements regarding leases
permitted by this Agreement;

(h) leases or subleases entered into by Borrower or a Subsidiary in good faith
with respect to its property not used in its business and which do not
materially interfere with the ordinary conduct of business of the Borrower or
any Subsidiary;

(i) statutory and common law landlords’ liens under leases to which Borrower or
one of the Subsidiaries is a party; and

(j) customary Liens (including the right of set-off) in favor of banking
institutions encumbering deposits held by such banking institutions incurred in
the ordinary course of business.

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

“Permitted Investments” means:

(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

 

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(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, one of the two
highest credit ratings obtainable from S&P or from Moody’s;

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within one year from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;

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

(e) money market funds that (i) comply with the criteria set forth in Securities
and Exchange Commission Rule 2a–7 under the Investment Company Act of 1940,
(ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of
at least $5,000,000,000; and

(f) in the case of any Foreign Subsidiary, investments that are substantially
similar to those described above.

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

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, National Association as its prime rate in effect
at its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

“Prior Assets” means assets that have been disposed of by a division or branch
of Borrower or a Subsidiary in a transaction with an unaffiliated third party
approved in accordance with this Agreement which would not make the seller a
“Prior Company” but constitute all or substantially all of the assets of such
division or branch for which the total consideration to be paid exceeds
$25,000,000.

“Prior Company” means any Subsidiary whose capital stock or other equity
interests have been disposed of, or all or substantially all of whose assets
have been disposed of, in each case, in a transaction with an unaffiliated third
party approved in accordance with this Agreement for which the total
consideration to be paid exceeds $25,000,000.

“Prior Credit Agreement” has the meaning assigned to such term in the Recitals.

“Prior Target” means all targets acquired or whose assets have been acquired in
an acquisition permitted by Section 6.04 for which the total consideration to be
paid exceeds $25,000,000.

 

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“Receivable Securitization Facility” means, with respect to the Borrower or any
Subsidiary, a transaction or group of transactions typically referred to as a
securitization in which the Borrower or such Subsidiary sells its accounts
receivable in a transaction accounted for as a true sale to a special purpose
bankruptcy remote entity that obtains debt financing to finance the purchase
price.

“Receivable Securitization Outstandings” means the aggregate amount outstanding
(i.e., advanced as the purchase price and not repaid from collections) under all
Receivable Securitization Facilities of the Borrower and its Subsidiaries that
is representative of the principal amount that would be outstanding if such
Receivable Securitization Facilities were accounted for as financings.

“Register” has the meaning set forth in Section 10.04.

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

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders)
having Revolving Exposures and unused Commitments representing more than 50.00%
of the sum of the total Revolving Exposures and unused Commitments at such time.

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Equity Interests in the Borrower or any Subsidiary.

“Revolving Availability Period” means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Commitments.

“Revolving Commitment” means, with respect to each Lender, the commitment, if
any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08, (b) increased from time to time pursuant to an Increased
Commitment Supplement, and (c) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 10.04. The initial
amount of each Lender’s Revolving Commitment is set forth on Schedule 2.01, or
in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Revolving Commitment or in the Increased Commitment Supplement
pursuant to which such Lender shall have become a Lender, as applicable. As of
the Effective Date, the aggregate amount of the Lenders’ Revolving Commitments
is $650,000,000.

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

“Revolving Lender” means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.

“Revolving Loan” means a Loan made pursuant to Section 2.01 hereof or pursuant
to Section 2.01(a) of the Prior Credit Agreement that remains outstanding on the
Effective Date.

“Revolving Maturity Date” means October 21, 2016.

 

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“S&P” means Standard & Poor’s Rating Services, a division of the McGraw Hill
Companies.

“Secured Parties” means the Administrative Agent, the Lenders and each Affiliate
of a Lender who is owed any portion of the Obligations.

“Senior Unsecured Notes” means those 4.90% notes due 2017 issued pursuant to
that certain First Supplemental Indenture dated as of May 6, 2010 among the
Borrower, as issuer, certain of the Subsidiaries, as guarantors, and U.S. Bank
National Association, as trustee.

“Spot Rate” means, with respect to any day, the rate determined on such date on
the basis of the offered exchange rates, as reflected in the foreign currency
exchange rate display of the Reuters Group (or on any successor or substitute
page, or any successor to or substitute for Reuters Group, providing exchange
rate quotations comparable to those currently provided by the Reuters Group on
such page, as determined by the Administrative Agent from time to time) at or
about 10:00 a.m. (Dallas, Texas time), to purchase Dollars with the other
applicable currency, provided that, if at least two such offered rates appear on
such display, the rate shall be the arithmetic mean of such offered rates and,
if no such offered rates are so displayed, the Spot Rate shall be determined by
the Administrative Agent on the basis of the arithmetic mean of such offered
rates as determined by the Administrative Agent in accordance with its normal
practice.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to Regulation D of the Board.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D of the Board or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.

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

“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Guarantor” means each Subsidiary of the Borrower (other than an
Excluded Foreign Subsidiary) that is party to the Guaranty Agreement.

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar
plan providing for payments

 

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only on account of services provided by current or former directors, officers,
employees or consultants of the Borrower or the Subsidiaries shall be a Swap
Agreement. For the avoidance of doubt, agreements relating to accelerated share
repurchase programs, and similar programs or arrangements, shall not be
considered Swap Agreements.

“Swap Obligations” means all obligations, indebtedness, and liabilities of the
Borrower or any Subsidiaries, or any one of them, to any Lender or any Affiliate
of any Lender, arising pursuant to any Swap Agreements entered into by such
Lender or Affiliate with the Borrower or any Subsidiaries, or any one of them,
whether now existing or hereafter arising, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint
and several, including all fees, costs, and expenses (including attorneys’ fees
and expenses) provided for in such Swap Agreements.

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.

“Swingline Lender” means JPMorgan Chase Bank, National Association, in its
capacity as lender of Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.04.

“Synthetic Lease” has the meaning ascribed to such term in the definition of
“EBITDA” hereunder.

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

“Total Indebtedness” means, at the time of determination, the sum of the
following determined for Borrower and the Subsidiaries on a consolidated basis
(without duplication): (a) the outstanding principal amount of all obligations
for borrowed money (including the Loan Obligations and the Receivable
Securitization Outstandings) including all such obligations evidenced by bonds,
notes, debentures, or other similar instruments; plus (b) all obligations of
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (c) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
accounts payable incurred in the ordinary course of business); plus (d) all
obligations of others secured by (or for which the holder of such obligations
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed (provided that for purposes of this clause
(d) the amount of any such Indebtedness shall be deemed not to exceed the higher
of the market value or the book value of such assets), plus (e) all Capital
Lease Obligations; plus (f) all obligations, contingent or otherwise, of such
Person as an account party in respect of letters of credit and letters of
guaranty (but excluding obligations in respect of (1) trade or commercial
letters of credit issued for the account of such Person in the ordinary course
of business and (2) stand-by letters of credit issued to support obligations of
such Person that are not of the type described in any of clauses (a) through
(c) and (e) of this definition); plus (h) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances.

“Transactions” means the execution, delivery and performance by each Loan Party
of the Loan Documents to which it is to be a party, the borrowing of Loans, the
use of the proceeds thereof and the issuance of Letters of Credit hereunder.

 

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

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

Section 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving
Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a
“Eurodollar Revolving Loan”). Borrowings also may be classified and referred to
by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar
Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

Section 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or other modifications set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) 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.

Section 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if after
the date hereof there occurs any change in GAAP or in the application thereof on
the operation of any provision hereof and the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of such change in GAAP or in the application
thereof (or if the Administrative Agent notifies the Borrower that the Required
Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.

Section 1.05. Conversion of Foreign Currencies.

(a) Dollar Equivalents. The Administrative Agent may determine the Dollar Amount
of any amount as required hereby, and a determination thereof by the
Administrative Agent shall be conclusive absent manifest error. The
Administrative Agent may, but shall not be obligated to, rely on any
determination of any Dollar Amount by the Borrower. The Administrative Agent may
determine or redetermine the Dollar Amount of any amount on any date either in
its own discretion or upon the request of any Lender, including the Dollar
Amount of any Letter of Credit made or issued in any foreign currency.

 

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(b) Rounding-Off. The Administrative Agent may set up appropriate rounding-off
mechanisms or otherwise round-off amounts hereunder to the nearest higher or
lower amount in whole Dollars, Australian Dollars, Euros, whole other currency
or smaller denomination thereof to ensure amounts owing by any party hereunder
or that otherwise need to be calculated or converted hereunder are expressed in
whole Dollars, whole Australian Dollars, whole Euros, whole other currency or in
whole smaller denomination thereof, as may be necessary or appropriate.

ARTICLE II.

The Credits

Section 2.01. Commitments. Subject to the terms and conditions set forth herein,
each Revolving Lender agrees to make advances in Dollars to the Borrower from
time to time during the Revolving Availability Period in an aggregate principal
amount that will not result in such Lender’s Revolving Exposure exceeding such
Lender’s Revolving Commitment. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.

Section 2.02. Loans and Borrowings.

(a) Loans Made Ratably. Each Loan (other than a Swingline Loan) shall be made as
part of a Borrowing consisting of Loans of the same Class and Type made by the
Lenders ratably in accordance with their respective Commitments of the
applicable Class. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.

(b) Loan Types. Subject to Section 2.13, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms of
this Agreement.

(c) Minimum Amounts; Limitation on Eurodollar Borrowings. At the commencement of
each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. At the time that each ABR Revolving Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000; provided that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e). Each
Swingline Loan shall be in an amount that is an integral multiple of $500,000
and not less than $1,000,000. Borrowings of more than one Type and Class may be
outstanding at the same time; provided that there shall not at any time be more
than a total of ten Eurodollar Borrowings outstanding.

(d) Limitation on Interest Periods. Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request, or to elect to convert
or continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Maturity Date.

 

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Section 2.03. Requests for Borrowings. To request a Revolving Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 12:00 noon, Dallas,
Texas time, three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 12:00 noon, Dallas, Texas
time on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in the form
attached hereto as Exhibit E or in such other form as may be approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:

(i) the aggregate amount of such Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and

(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.06.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month’s duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

Section 2.04. Swingline Loans.

(a) Commitment. Subject to the terms and conditions set forth herein, the
Swingline Lender agrees to make Swingline Loans denominated in Dollars to the
Borrower from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in
(i) the aggregate principal amount of outstanding Swingline Loans exceeding
$65,000,000 or (ii) the sum of the total Revolving Exposures exceeding the total
Revolving Commitments; provided that the Swingline Lender shall not be required
to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Swingline Loans.

(b) Borrowing Procedure. To request a Swingline Loan, the Borrower shall notify
the Administrative Agent of such request by telephone (confirmed by telecopy),
not later than 12:00 noon, Dallas, Texas time, on the day of a proposed
Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day), amount of the requested
Swingline Loan, and whether such Swingline Loan will accrue interest based on
the Alternate Base Rate or the Eurodollar Daily Floating Rate. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to the general
deposit account of the Borrower with the Swingline Lender or by wire transfer,
automated clearing house debit or interbank transfer to such other account,
accounts or Person designated by the Borrower (or, in the case of a Swingline
Loan made to finance the reimbursement of an LC Disbursement as provided in
Section 2.05(e), by remittance to the Issuing Bank) by 3:00 p.m., Dallas, Texas
time, on the requested date of such Swingline Loan.

 

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(c) Revolving Lender Participation in Swingline Loans. The Swingline Lender may
by written notice given to the Administrative Agent not later than 10:00 a.m.,
Dallas, Texas time, on any Business Day require the Revolving Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
outstanding. Such notice shall specify the aggregate amount of Swingline Loans
in which Revolving Lenders will participate. Promptly upon receipt of such
notice, the Administrative Agent will give notice thereof to each Revolving
Lender, specifying in such notice such Lender’s Applicable Percentage of such
Swingline Loan or Loans. Each Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Lender’s
Applicable Percentage of such Swingline Loan or Loans. Each Revolving Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this Section 2.04(c) is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Revolving Lender shall
comply with its obligation under this Section 2.04(c) by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. The Administrative Agent shall notify
the Borrower of any participations in any Swingline Loan acquired pursuant to
this Section 2.04(c), and thereafter payments in respect of such Swingline Loan
shall be made to the Administrative Agent and not to the Swingline Lender. Any
amounts received by the Swingline Lender from the Borrower (or other party on
behalf of the Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
Section 2.04(c) and to the Swingline Lender, as their interests may appear;
provided that any such payment so remitted shall be repaid to the Swingline
Lender or to the Administrative Agent, as applicable, if and to the extent such
payment is required to be refunded to the Borrower for any reason. The purchase
of participations in a Swingline Loan pursuant to this Section 2.04(c) shall not
relieve the Borrower of any default in the payment thereof.

Section 2.05. Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of Letters of Credit for its own account, denominated
in Dollars, Australian Dollars or Euros, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Revolving Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
and specifying the date of issuance, amendment, renewal or extension (which date
shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the currency in which such Letter of Credit will be
denominated (which must be either Dollars, Australian Dollars or Euros), the

 

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name and address of the beneficiary thereof and such other information as shall
be necessary to prepare, amend, renew or extend such Letter of Credit. Any
Issuing Bank (other than JPMorgan Chase Bank, National Association and its
affiliates) shall promptly notify the Administrative Agent in writing of any
Letter of Credit issued for the account of the Borrower. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on
the Issuing Bank’s standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed a Dollar Amount equal to the total Revolving Commitments and (ii) the
total Revolving Exposures shall not exceed the total Revolving Commitments.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit and (ii) the date that is five Business Days
prior to the Revolving Maturity Date; provided that (A) any Letter of Credit
with a one-year term may provide for the renewal thereof for additional one-year
periods not to extend past the date in the preceding clause (ii) and (B) any
Letter of Credit may have an expiration date that extends past the date in
clause (ii) if the Borrower has, on the date of issuance of such Letter of
Credit, deposited in an account with the Administrative Agent, in the name of
the Administrative Agent and for the benefit of the Issuing Bank for such Letter
of Credit, an amount in Dollars equal to 105% of the LC Exposure for such Letter
of Credit in accordance with the terms of Section 2.05(j).

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants
to each Revolving Lender, and each Revolving Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Revolving Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Lender’s
Applicable Percentage of the Dollar Amount of each LC Disbursement in Dollars
made by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
Section 2.05(d) in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Any participation funded under this Section 2.05(d)
shall be converted to Dollar ABR Loans.

(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement in
the currency in which such Letter of Credit is denominated not later than
12:00 noon, Dallas, Texas time (or with respect to LC Disbursements not
denominated in Dollars, 12:00 noon, London, England time), on the date that such
LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., Dallas, Texas time (or with respect to LC
Disbursements not denominated in Dollars, 12:00 noon, London, England time), on
such date, or, if such notice has not been received by the Borrower prior to
such time on such date, then not later than 12:00 noon, Dallas, Texas time (or
with respect to LC Disbursements not denominated in Dollars, 12:00 noon, London,
England time), on (i) the Business Day that the Borrower receives such notice,
if such notice is received prior to 12:00 noon, Dallas, Texas time (or with
respect to LC Disbursements not denominated in Dollars, 12:00 noon, London,
England time), on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such

 

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notice is not received prior to such time on the day of receipt; provided that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Sections 2.03 or 2.04 that such payment be financed
with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrower’s obligation to make such payment shall
be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan. If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from the Borrower in respect thereof and such Lender’s
Applicable Percentage thereof. Promptly following receipt of such notice, each
Revolving Lender shall pay to the Administrative Agent in Dollars its Applicable
Percentage of the Dollar Amount of the payment then due from the Borrower, in
the same manner as provided in Section 2.06 with respect to Loans made by such
Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this Section 2.05(e), the Administrative
Agent shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this Section 2.05(e) to
reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Revolving Lender pursuant to this
Section 2.05(e) to reimburse the Issuing Bank for any LC Disbursement (other
than the funding of ABR Revolving Loans or a Swingline Loan as contemplated
above) shall not constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such LC Disbursement. After receipt of any payments from
the Revolving Lenders under this Section 2.05(e), the Borrower’s obligation to
reimburse such LC Disbursement, if originally denominated in a currency other
than Dollars, shall convert to a Dollar denominated obligation in a Dollar
Amount calculated as of date the payments by the Revolving Lenders are received
and any future payments by the Borrower in respect thereof shall be made in
Dollars.

(f) Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with

 

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respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its
sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Bank has made or will make an
LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.12 (c) shall apply. Interest
accrued pursuant to this Section 2.05(h) shall be for the account of the Issuing
Bank, except that interest accrued on and after the date of payment by any
Revolving Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.

(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.11(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.

(j) Cash Collateralization. If any Event of Default exists, on the Business Day
that the Borrower receives notice from the Administrative Agent or the Required
Lenders (or, if the maturity of the Loans has been accelerated, Revolving
Lenders with LC Exposure representing greater than 50% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders, an amount in
Dollars equal to the LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower described in clause (h) or
(i) of Article VIII. Each such deposit shall be held by the Administrative Agent
as collateral for the payment and performance of the obligations of the Borrower
under this Agreement and the Borrower will, in connection therewith, execute and
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and pledge agreements in form and substance satisfactory to the Administrative
Agent which the Administrative Agent may, in its discretion, require. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Revolving
Lenders with LC Exposure representing greater than 50% of the total
LC Exposure), be applied to satisfy other Obligations and the Borrower will, in
connection therewith, execute and deliver such security and pledge agreements in
form and substance satisfactory to the Administrative Agent which the
Administrative Agent may, in its discretion, require. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

Section 2.06. Funding of Borrowings.

(a) By Lenders. Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds in
Dollars by 12:00 noon, Dallas, Texas time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders;
provided that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent or by wire transfer, automated clearing
house debit or interbank transfer to such other account, accounts or Persons
designated by the Borrower in the applicable Borrowing Request; provided that
ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e) shall be remitted by the Administrative Agent to the
Issuing Bank.

(b) Fundings Assumed Made. 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 paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount 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 such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.

Section 2.07. Interest Elections.

(a) Conversion and Continuation. Each Revolving Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may

 

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elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing. This Section shall not apply to
Swingline Borrowings, which may not be converted or continued.

(b) Delivery of Interest Election Request. To make an election pursuant to this
Section, the Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting
from such election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Interest Election Request in the form of Exhibit F hereto and signed by the
Borrower.

(c) Contents of Interest Election Request. Each telephonic and written Interest
Election Request shall specify the following information in compliance with
Section 2.02 and paragraph (f) of this Section:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

(d) Notice to the Lenders. Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender’s portion of each resulting Borrowing.

(e) Automatic Conversion. If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing.

(f) Limitations on Election. Notwithstanding any contrary provision hereof, if
an Event of Default exists and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing (i) no outstanding borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto. A Borrowing of any Class may not be converted to or continued as a
Eurodollar Borrowing if after giving

 

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effect thereto (i) the Interest Period therefor would commence before and end
after a date on which any principal of the Loans of such Class is scheduled to
be repaid and (ii) the sum of the aggregate principal amount of outstanding
Eurodollar Borrowings of such Class with Interest Periods ending on or prior to
such scheduled repayment date plus the aggregate principal amount of outstanding
ABR Borrowings of such Class would be less than the aggregate principal amount
of Loans of such Class required to be repaid on such scheduled repayment date.

Section 2.08. Termination and Reduction of Commitments.

(a) Termination Date. Unless previously terminated, the Revolving Commitments
shall terminate on the Revolving Maturity Date.

(b) Optional Termination or Reduction. The Borrower may at any time terminate,
or from time to time reduce, the Commitments of any Class; provided that
(i) each reduction of the Commitments of any Class shall be in an amount that is
an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the
Borrower shall not terminate or reduce the Revolving Commitments if, after
giving effect to any concurrent prepayment of the Revolving Loans in accordance
with Section 2.10, the sum of the Revolving Exposures would exceed the total
Revolving Commitments.

(c) Notice of Termination or Reduction. The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Commitments
under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Revolving Commitments delivered by
the Borrower may state that such notice is conditioned upon the effectiveness of
any specified event, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified effective
date) if such event shall not have occurred. Any termination or reduction of the
Commitments of any Class shall be permanent. Each reduction of the Commitments
of any Class shall be made ratably among the Lenders in accordance with their
respective Commitments of such Class.

Section 2.09. Repayment of Loans; Evidence of Debt.

(a) Promise to Pay. The Borrower hereby unconditionally promises to pay (i) to
the Administrative Agent for the account of each Revolving Lender the then
unpaid principal amount of each Revolving Loan of such Lender on the Revolving
Maturity Date, and (ii) to the Swingline Lender the then unpaid principal amount
of each Swingline Loan on the Revolving Maturity Date.

(b) Lender Records. Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.

(c) Administrative Agent Records. The Administrative Agent shall maintain
accounts in which it shall record (i) the amount of each Loan made hereunder,
the Class and Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the Lenders
and each Lender’s share thereof.

 

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(d) Prima Facie Evidence. The entries made in the accounts maintained pursuant
to paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement. In the event
of any conflict between the account and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the
accounts and records maintained by the Administrative Agent shall control in the
absence of manifest error.

(e) Request for a Note. Any Lender may request that Loans of any Class made by
it be evidenced by a promissory note. In such event, the Administrative Agent
shall prepare a promissory note which the Borrower shall execute and deliver to
the requesting Lender (or, if requested by such Lender, to such Lender and its
registered assigns). Thereafter, the Loans evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 10.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a registered note, to such payee and its registered assigns).

Section 2.10. Prepayment of Loans.

(a) Optional Prepayment. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, without prepayment
penalty or premium subject to the requirements of this Section and Section 2.15.

(b) Mandatory Prepayment of Revolving Loans. In the event and on such occasion
that the sum of the Revolving Exposures exceeds the total Revolving Commitments,
the Borrower shall prepay Revolving Borrowings or Swingline Borrowings (or, if
no such Borrowings are outstanding, deposit cash collateral in an account with
the Administrative Agent pursuant to Section 2.05(j)) in an aggregate amount
equal to such excess.

(c) Selection of Borrowing to be Prepaid. Prior to any optional or mandatory
prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or
Borrowings to be prepaid and shall specify such selection in the notice of such
prepayment pursuant to paragraph (d) of this Section.

(d) Notice of Prepayment; Application of Prepayments. The Borrower shall notify
the Administrative Agent (and, in the case of prepayment of a Swingline Loan,
the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 12:00 noon, Dallas, Texas time, three Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Borrowing or a Swingline
Loan, not later than 12:00 noon, Dallas, Texas time, on the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid and, in the
case of a mandatory prepayment, a reasonably detailed calculation of the amount
of such prepayment; provided that, if a notice of optional prepayment is given
in connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.08, then such notice of prepayment may
be revoked if such notice of termination is revoked in accordance with
Section 2.08; provided, further, that the Borrower may rescind any such notice
if such notice stated in writing that it was conditioned on the occurrence of a
specified event and such event shall not have occurred. Promptly following
receipt of any such notice (other than a notice relating solely to Swingline
Loans), the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02, except as necessary to apply fully the required amount
of a mandatory prepayment. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12.

 

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Section 2.11. Fees.

(a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at the
Applicable Rate on the average daily unused amount of each Commitment of such
Lender during the period from and including the Effective Date to but excluding
the date on which such Commitment terminates. Accrued commitment fees shall be
payable in arrears on the date which is three Business Days following the last
day of each March, June, September and December of each year and on the date on
which the Revolving Commitments terminate, commencing on the first such date to
occur after the date hereof. All commitment fees shall be computed on the basis
of a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
commitment fees with respect to Revolving Commitments, a Revolving Commitment of
a Lender shall be deemed to be used to the extent of the outstanding Revolving
Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender
shall be disregarded for such purpose).

(b) Letter of Credit Fees. The Borrower agrees to pay in Dollars (i) to the
Administrative Agent for the account of each Revolving Lender a participation
fee with respect to its participations in Letters of Credit, which shall accrue
at the same Applicable Rate as interest on Eurodollar Revolving Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender’s Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee,
which shall accrue at the rate of 0.125% per annum on the average daily amount
of the LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank’s standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Participation fees shall be payable on the third Business Day following the last
day of each March, June, September and December of each year commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Revolving Commitments terminate and
any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. Fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
shall be payable on the date on which the Revolving Commitments terminate and
any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).

(c) Administrative Agent Fees. The Borrower agrees to pay to the Administrative
Agent, for its own account, fees payable in the amounts and at the times
separately agreed in writing upon between the Borrower and the Administrative
Agent.

(d) Payment of Fees. All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.

 

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Section 2.12. Interest.

(a) ABR Borrowings. The Revolving Loans comprising each ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Rate.

(b) Eurodollar Borrowings. The Loans comprising each Eurodollar Borrowing shall
bear interest at the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Rate.

(c) Swingline Borrowings. In accordance with Section 2.04(b), the Borrower may
elect for a Swingline Loan to bear interest at either (a) the Alternate Base
Rate plus the Applicable Rate or (b) the Eurodollar Daily Floating Rate plus the
Applicable Rate.

(d) Default Interest. Notwithstanding the foregoing, subject to Section 10.13,
if any principal of or interest on any Loan or any fee or other amount payable
by the Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to (i) in the case of overdue
principal of any Loan, 2% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraphs of this Section or (ii) in the case of any
other amount, 2% plus the rate applicable to ABR Revolving Loans as provided in
paragraph (a) of this Section. In addition, if any Event of Default exists and
the Required Lenders request, the outstanding principal amount of the Loans
shall bear interest, after as well as before judgment, as a rate per annum equal
to 2% plus the rate otherwise applicable to such Loan as provided in the
preceding paragraphs of this Section.

(e) Payment of Interest. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and upon termination of the
Revolving Commitments; provided that (i) interest accrued pursuant to
paragraph (d) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an
ABR Revolving Loan prior to the end of the Revolving Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.

(f) Computation. All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate and Eurdollar Daily Floating Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.

Section 2.13. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Interest Period; or

 

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(b) the Administrative Agent is advised by the Required Lenders that they have
determined in good-faith that the Adjusted LIBO Rate for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone, or telecopy or other electronic transmission approved by
the Administrative Agent as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing. The Required Lenders shall provide
the Borrower with documentation which reasonably supports their determination
referenced in the foregoing clause (b) promptly upon the Borrower’s request to
the Administrative Agent therefor.

Section 2.14. Increased Costs.

(a) Change In Law. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate) or the Issuing Bank; or

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

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.

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

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

 

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(d) Limitation on Compensation. Failure or delay on the part of any Lender or
the Issuing Bank to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or the Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 90 days prior to the date that such Lender or the
Issuing Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or the
Issuing Bank’s intention to claim compensation therefor; provided further that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 90-day period referred to above shall be extended to
include the period of retroactive effect thereof.

Section 2.15. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Revolving Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under
Section 2.10(d) and is revoked in accordance therewith), or (d) the assignment
of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to
Section 2.18, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within
10 days after receipt thereof.

Section 2.16. Taxes.

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

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

 

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(c) Tax Indemnification. The Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Bank, within 10 Business Days after written demand
therefor, for the full amount of any Indemnified Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Indemnified Taxes imposed
or asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender or the
Issuing Bank, stating the amount of any Indemnified Taxes so paid or payable by
the Lender, Issuing Bank or Administrative Agent and describing the basis for
the indemnification claim with reasonably supporting documentation or by the
Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.

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

(e) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
tax under applicable law with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower or Administrative Agent, as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if reasonably requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 2.16(ii)(A), (ii)(B) and (ii)(D) below) shall
not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. person (within the meaning of Section 7701(a)(3)
of the Code) shall deliver to the Borrower and the Administrative Agent on or
prior to the date on which such Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the reasonable request of the Borrower or
the Administrative Agent), executed originals of IRS Form W-9 certifying that
such Lender is exempt from U.S. federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

 

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

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

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

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

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

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

 

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(f) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.16 (including by
the payment of additional amounts pursuant to this Section 2.16), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (f) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (f), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (f) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the indemnification
payments or additional amounts giving rise to such refund had never been paid.
This paragraph shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

Section 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs;
Proceeds of Guaranty Agreement.

(a) Payments Generally. The Borrower shall make each payment required to be made
by it hereunder or under any other Loan Document (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under
Section 2.14, 2.15 or 2.16, or otherwise) prior to the time expressly required
hereunder or under such other Loan Document for such payment (or, if no such
time is expressly required, prior to 12:00 noon, Dallas, Texas time), on the
date when due, in immediately available funds, without set-off or counterclaim.
Any amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent pursuant to the payment instructions
provided by the Administrative Agent, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly provided herein and except that
payments pursuant to Sections 2.14, 2.15, 2.16 and 10.03 shall be made directly
to the Persons entitled thereto and payments pursuant to other Loan Documents
shall be made to the Persons specified therein. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
under any Loan Document shall be due on a day that is not a Business Day, the
date for payment shall be extended to the next succeeding Business Day, and, in
the case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. Except as specified in Section 2.05 with respect
to Letters of Credit issued in a currency other than Dollars, all payments under
each Loan Document shall be made in Dollars.

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

 

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

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

(e) Set-Off Against Amounts Owed Lenders. If any Lender shall fail to make any
payment required to be made by it pursuant to this Agreement or any other Loan
Document, then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully
paid.

(f) Application of Proceeds of Guaranty Agreement. All amounts received under
the Guaranty Agreement shall first be applied as payment of the accrued and
unpaid fees of the Administrative Agent hereunder and then to all other unpaid
or unreimbursed Obligations (including reasonable attorneys’ fees and expenses)
owing to the Administrative Agent in its capacity as Administrative Agent only
and then any remaining amount of such proceeds shall be distributed:

(i) first, to the Lenders, pro rata in accordance with the respective unpaid
amounts of Loan Obligations, until all the Loan Obligations have been Fully
Satisfied;

 

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(ii) second, to the Secured Parties, pro rata in accordance with the respective
unpaid amounts of Swap Obligations relating to any interest rate, currency or
commodity Swap Agreement, until all such Swap Obligations have been Fully
Satisfied;

(iii) third, to the Secured Parties, pro rata in accordance with the respective
unpaid amounts of the Deposit Obligations, until all Deposit Obligations have
been Fully Satisfied; and

(iv) fourth, to the Secured Parties, pro rata in accordance with the respective
unpaid amounts of the remaining Obligations.

(g) Noncash Proceeds. Notwithstanding anything contained herein to the contrary,
if the Administrative Agent shall ever acquire any collateral through
foreclosure or by a conveyance in lieu of foreclosure or by retaining any of the
collateral in satisfaction of all or part of the Obligations or if any proceeds
received by the Administrative Agent to be distributed and shared pursuant to
this Section 2.17 are in a form other than immediately available funds, the
Administrative Agent shall not be required to remit any share thereof under the
terms hereof and the Secured Parties shall only be entitled to their undivided
interests in the collateral or noncash proceeds as determined by paragraph (f)
of this Section 2.17. The Secured Parties shall receive the applicable portions
(in accordance with the foregoing paragraph (f)) of any immediately available
funds consisting of proceeds from such collateral or proceeds of such noncash
proceeds so acquired only if and when received by the Administrative Agent in
connection with the subsequent disposition thereof. While any collateral or
other property to be shared pursuant to this Section is held by the
Administrative Agent pursuant to this clause (g), the Administrative Agent shall
hold such collateral or other property for the benefit of the Secured Parties
and all matters relating to the management, operation, further disposition or
any other aspect of such collateral or other property shall be resolved by the
agreement of the Required Lenders.

(h) Return of Proceeds. If at any time payment, in whole or in part, of any
amount distributed by the Administrative Agent hereunder is rescinded or must
otherwise be restored or returned by the Administrative Agent as a preference,
fraudulent conveyance, or otherwise under any bankruptcy, insolvency, or similar
law, then each Person receiving any portion of such amount agrees, upon demand,
to return the portion of such amount it has received to the Administrative
Agent.

(i) Notice of Amount of Obligations. Prior to making any distribution under
clause (f) of this Section, the Administrative Agent shall request each Lender
to provide the Administrative Agent with a statement of the amounts of Swap
Obligations and Deposit Obligations then owed to such Lender and its Affiliates.
A Lender may provide such information to the Administrative Agent at any time
and the Administrative Agent may also request such information at any time. If a
Lender does not provide the Administrative Agent a statement of the amount of
any such Obligations within three (3) Business Days of the date requested, the
Administrative Agent may make distributions under clause (f) thereafter and the
amount of Swap Obligations and Deposit Obligations then owed to such Lender and
its Affiliates shall conclusively be deemed to be zero for purposes of such
distributions. Neither the Lender nor its Affiliates shall have a right to share
in such distributions with respect to any Swap Obligations or Deposit
Obligations owed to it. If a Lender shall thereafter provide the Administrative
Agent a statement of the amount of the Swap Obligations and Deposit Obligations
then owed to such Lender and its Affiliates, any distribution under clause (b)
made after the notice is received by the Administrative Agent shall take into
account the amount of the Swap Obligations and/or Deposit Obligations then owed.
No Lender nor any Affiliate of a Lender that has not provided the statement of
the amount of the Swap Obligations or Deposit Obligations owed under this
clause (i) shall be entitled to share retroactively in any distribution made
prior to the date when such statement was provided. In furtherance of the
provisions of Article IX, the Administrative Agent shall in all cases be fully
protected in making distributions hereunder in accordance with the statements of
the Swap Obligations and Deposit Obligations received from the Lenders under
this clause (i).

 

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Section 2.18. Mitigation Obligations; Replacement of Lenders.

(a) Mitigation. If any Lender requests compensation under Section 2.14, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

(b) Replacement. If any Lender requests compensation under Section 2.14, or if
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Bank and Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts), and
(iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.14 or payments required to be made pursuant to Section 2.16,
such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

Section 2.19. Increase of Revolving Commitments. By written notice sent to the
Administrative Agent (which the Administrative Agent shall promptly distribute
to the Lenders), the Borrower may request an increase of the aggregate amount of
the Revolving Commitments (i) by an aggregate amount equal to any integral
multiple of $5,000,000 and not less than $10,000,000 and (ii) by an aggregate
amount for all increases not to exceed $100,000,000; provided that (i) no
Default shall have occurred and be continuing, (ii) the aggregate amount of the
Revolving Commitments shall not have been reduced, nor shall the Borrower have
given notice of any such reduction under Section 2.08(b) which has not been
revoked by the time of the Borrower’s notice under this Section 2.19, and
(iii) the aggregate amount of the Revolving Commitments shall not previously
have been increased pursuant to this Section 2.19 more than three (3) times. If
one or more of the Lenders is not increasing its Revolving Commitment, then,
with notice to the Administrative Agent and the other Lenders, another one or
more financial institutions, each as approved by the Borrower and the
Administrative Agent (which approval shall not be unreasonably withheld) (a “New
Lender”), may commit to provide an amount equal to the aggregate amount of the
requested increase that will not be provided by the existing Lenders (the
“Increase Amount”); provided, that the Revolving Commitment of each New Lender
shall be at least

 

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$5,000,000 and the maximum number of New Lenders shall be three (3). Upon
receipt of notice from the Administrative Agent to the Lenders and the Borrower
that the Lenders, or sufficient Lenders and New Lenders, have agreed to commit
to an aggregate amount equal to the Increase Amount (or such lesser amount as
the Borrower shall agree, which shall be at least $10,000,000 and an integral
multiple of $5,000,000 in excess thereof), then: provided that no Default exists
at such time or after giving effect to the requested increase, the Borrower, the
Administrative Agent and the Lenders willing to increase their respective
Revolving Commitments and the New Lenders (if any) shall execute and deliver an
Increased Commitment Supplement (herein so called) in the form attached hereto
as Exhibit “D”. If all existing Revolving Lenders shall not have provided their
pro rata portion of the requested increase, then after giving effect to the
requested increase the outstanding Revolving Loans may not be held pro rata in
accordance with the new Revolving Commitments. In order to remedy the foregoing,
on the effective date of the Increased Commitment Supplement the Revolving
Lenders shall make advances among themselves, such advances to be in amounts
sufficient so that after giving effect thereto, the Revolving Loans shall be
held by the Revolving Lenders pro rata according to their respective Revolving
Commitments. The advances made by a Revolving Lender under this Section 2.19
shall be deemed to be a purchase of a corresponding amount of the Revolving
Loans of one or more of the Revolving Lenders who received the advances. The
Revolving Commitments of the Revolving Lenders who do not agree to increase
their Revolving Commitments cannot be reduced or otherwise changed pursuant to
this Section 2.19. No Lender is obligated to increase its Revolving Commitment
under the provisions of this Section 2.19.

Section 2.20. Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

(a) Suspension of Commitment Fees. Fees shall cease to accrue on the unfunded
portion of the Revolving Commitment of such Defaulting Lender pursuant to
Section 2.11(a);

(b) Suspension of Voting. Such Defaulting Lender shall not have the right to
vote on any issue on which voting is required (other than to the extent
expressly provided in Section 10.02(b)) and the Commitment and Revolving
Exposure of such Defaulting Lender shall not be included in determining whether
the Required Lenders have taken or may take any action hereunder;

(c) Participation Exposure. If any Swingline Exposure or LC Exposure exists at
the time a Lender becomes a Defaulting Lender then:

(i) all or any part of the Swingline Exposure and LC Exposure of such Defaulting
Lender shall be reallocated among the non-Defaulting Lenders in accordance with
their respective Applicable Percentages but only to the extent that (x) the
conditions set forth in Section 4.02 are satisfied at the time of such
reallocation (and, unless the Borrower shall have otherwise notified the
Administrative Agent at such time, the Borrower shall be deemed to have
represented and warranted that such conditions are satisfied at such time),
(y) the sum of all non-Defaulting Lenders’ Revolving Exposures plus such
Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total
of all non-Defaulting Lenders’ Revolving Commitments and (z) such reallocation
does not cause the Revolving Exposure of any non-Defaulting Lender to exceed
such non-Defaulting Lender’s Revolving Commitment;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent (x) first, prepay such Swingline Exposure and
(y) second, cash collateralize, for the benefit of the Issuing Bank, the
Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure
(after giving effect to any partial reallocation pursuant to clause (i) above)
in accordance with the procedures set forth in Section 2.05(j) for so long as
such LC Exposure is outstanding;

 

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(iii) if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to Section 2.11(b)
with respect to such Defaulting Lender’s LC Exposure during the period such
Defaulting Lender’s LC Exposure is cash collateralized;

(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to
clause (i) above, then the fees payable to the Lenders pursuant to Sections
2.11(a) and 2.11(b) shall be adjusted in accordance with such non-Defaulting
Lenders’ Applicable Percentages; and

(v) if all or any portion of such Defaulting Lender’s LC Exposure is neither
reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of the Issuing Bank or any Lender
hereunder, all letter of credit fees payable under Section 2.11(b) with respect
to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank
until such LC Exposure is reallocated and/or cash collateralized; and

(d) Suspension of Swingline Loans. So long as such Lender is a Defaulting
Lender, the Swingline Lender shall not be required to fund any Swingline Loan
and the Issuing Bank shall not be required to issue, amend or increase any
Letter of Credit, unless it is satisfied that the related exposure will be 100%
covered by the Commitments of the non-Defaulting Lenders and/or cash collateral
will be provided by the Borrower in accordance with Section 2.20(c), and
participating interests in any such newly made Swingline Loan or newly issued or
increased Letter of Credit shall be allocated among non-Defaulting Lenders in a
manner consistent with Section 2.20(c)(i) (and such Defaulting Lender shall not
participate therein).

If (i) a Bankruptcy Event with respect to the parent of any Lender shall occur
following the date hereof and for so long as such event shall continue or
(ii) the Issuing Bank or the Swingline Lender has a good faith belief that any
Lender has defaulted in fulfilling its obligations under one or more other
agreements in which such Lender commits to extend credit, the Issuing Bank shall
not be required to issue, amend or increase any Letter of Credit and the
Swingline Lender shall not be required to fund any Swingline Loan, unless the
Issuing Bank or the Swingline Lender, as the case may be, shall have entered
into arrangements with the Borrower or such Lender, satisfactory to the Issuing
Bank or the Swingline Lender, as the case may be, to defease any risk in respect
of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrower, the Issuing
Bank and the Swingline Lender agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect
the inclusion of such Lender’s Revolving Commitment and on the date of such
readjustment such Lender shall purchase at par such of the Loans of the other
Lenders (other than Swingline Loans) as the Administrative Agent shall determine
may be necessary in order for such Lender to hold such Loans in accordance with
its Applicable Percentage.

ARTICLE III.

Representations and Warranties

In order to induce the Administrative Agent, the Issuing Bank and the Lenders to
enter into this Agreement and to make Loans and issue Letters of Credit
hereunder, the Borrower represents and warrants to the Administrative Agent, the
Issuing Bank and the Lenders that:

 

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Section 3.01. Organization; Powers. Each of the Borrower and its Material
Subsidiaries is (i) duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) has all requisite power
and authority to carry on its business as now conducted, and (iii) is qualified
to do business, and is in good standing, in every jurisdiction where such
qualification is required except, in the case of (ii) or (iii) above, where the
failure to do so qualify could not reasonably be expected to result in a
Material Adverse Effect.

Section 3.02. Authorization; Enforceability. The Transactions to be entered into
by each Loan Party are within such Loan Party’s corporate, partnership or
limited liability company powers (as applicable) and have been duly authorized
by all necessary corporate, partnership or limited liability action (as
applicable) and, if required, all stockholder action. This Agreement has been
duly executed and delivered by the Borrower and constitutes, and each other Loan
Document to which any Loan Party is to be a party, when executed and delivered
by such Loan Party, will constitute, a legal, valid and binding obligation of
the Borrower or such Loan Party (as the case may be), enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

Section 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority or any other Person, except such as have
been obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, bylaws or other organizational
documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
material indenture, agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or its assets (including the documentation governing the
Senior Unsecured Notes), or give rise to a right thereunder to require any
payment to be made by the Borrower or any of its Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries.

Section 3.04. Financial Condition; No Material Adverse Change.

(a) The Borrower has heretofore publicly filed with the Securities and Exchange
Commission via the EDGAR filing system its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i) as of and for the
fiscal year ended December 31, 2010, reported on by KPMG LLP, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended June 30, 2011, certified by its chief financial officer. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such dates and for such periods in accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above.

(b) Except as disclosed in the financial statements referred to above or the
notes thereto or in the Information Memorandum and except for the Disclosed
Matters, after giving effect to the Transactions, the Borrower nor its
Subsidiaries has, as of the Effective Date, any material contingent liabilities,
unusual long-term commitments or unrealized losses.

(c) Since December 31, 2010, there has been no material adverse change in the
business, operations, affairs, financial condition, assets or properties of the
Borrower and the Subsidiaries, taken as a whole.

 

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Section 3.05. Properties.

(a) Each of the Borrower and its Subsidiaries has good title to, or valid
leasehold interests in, all its real and personal property necessary or material
to its business in the ordinary course, except for such defects in title that
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property used
in its business in the ordinary course, and the use thereof by the Borrower and
its Subsidiaries does not infringe upon the rights of any other Person, except
as, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.

(c) As of the Effective Date, neither the Borrower nor any of its Subsidiaries
has received notice of, or has knowledge of, any pending or contemplated
condemnation proceeding affecting any fee-owned real property or any sale or
disposition thereof in lieu of condemnation.

Section 3.06. Litigation and Environmental Matters.

(a) Except for the Disclosed Matters, there are no actions, suits or proceedings
by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect (other than the Disclosed Matters) or (ii) that involve any of the Loan
Documents or the Transactions.

(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental
Liability or (iv) knows of any reasonable basis for any Environmental Liability.

(c) The Disclosed Matters, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. Since the
Effective Date, there has been no change in the status of the Disclosed Matters
that, individually or in the aggregate, has resulted in, or materially increased
the likelihood of, a Material Adverse Effect.

Section 3.07. Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except in
instances where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect. No Default
has occurred and is continuing.

Section 3.08. Investment Company Status. Neither the Borrower nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

Section 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely filed
or caused to be filed all Tax returns and reports required to have been filed
and has paid or caused to be paid all Taxes required to have been paid by it,
except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves or (b) to the extent that the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect.

 

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Section 3.10. ERISA. As of the Effective Date, (a) no ERISA Event has occurred
or is reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect and (b) the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $100,000,000 the fair
market value of the assets of all such underfunded Plans.

Section 3.11. Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any of the other reports, financial statements, certificates or
other information furnished by or on behalf of any Loan Party to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to any information
consisting of forward-looking statements, estimates projections and projected
financial information, the Borrower represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time, it being understood that such forward-looking statements, estimates,
projections and projected financial information are subject to significant
uncertainties and contingencies, many of which are beyond the control of the
Borrower or any of its Subsidiaries and no assurance can be given that such
forward-looking statements, estimates, projections and projected financial
information will be realized.

Section 3.12. Material Subsidiaries. As of the Effective Date, the Borrower has
no Material Subsidiaries other than those listed on Schedule 3.12 hereto. As of
the Effective Date, Schedule 3.12 sets forth the jurisdiction of incorporation
or organization of each such Material Subsidiary, the percentage of Borrower’s
ownership of the outstanding Equity Interests of each Material Subsidiary
directly owned by Borrower, and the percentage of each Material Subsidiary’s
ownership of the outstanding Equity Interests of each other Material Subsidiary.
All of the outstanding Equity Interest of Borrower and each Material Subsidiary
have been validly issued, are fully paid, and are nonassessable. Except as
permitted to be issued or created pursuant to the terms hereof (including stock
options or other equity based awards granted to officers, directors, employees
and consultants of the Company or any Subsidiary) or as reflected on
Schedule 3.12, there are no outstanding subscriptions, options, warrants, calls,
or rights (including preemptive rights) to acquire, and no outstanding
securities or instruments convertible into any Equity Interests of the Borrower
or any Material Subsidiary.

Section 3.13. Insurance. Each of the Borrower and the Subsidiaries maintain with
financially sound and reputable insurers, insurance with respect to its
properties and business against such casualties and contingencies and in such
amounts as are usually carried by businesses engaged in similar activities as
the Borrower and the Subsidiaries and located in similar geographic areas in
which the Borrower and the Subsidiaries operate

Section 3.14. Labor Matters. As of the Effective Date, except where
non-compliance cannot reasonably be expected to have a Material Adverse Effect,
(i) the hours worked by and payments made to employees of the Borrower and the
Subsidiaries have not been in violation of the Fair Labor Standards

 

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Act or any other applicable Federal, state, local or foreign law dealing with
such matters, and (ii) all payments due from the Borrower or any Subsidiary, or
for which any claim may be made against the Borrower or any Subsidiary, on
account of wages and employee health and welfare insurance and other benefits,
have been paid or accrued as a liability on the books of the Borrower or such
Subsidiary. As of the Effective Date, there are no strikes, lockouts or
slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of
the Borrower, threatened which could reasonably be expected to result in a
Material Adverse Effect. The consummation of the Transactions will not give rise
to any right of termination or right of renegotiation on the part of any union
under any collective bargaining agreement to which the Borrower or any
Subsidiary is bound.

Section 3.15. Solvency. Immediately after the consummation of the Transactions
to occur on the Effective Date and immediately following the making of each Loan
made on the Effective Date and after giving effect to the application of the
proceeds of such Loans, (a) the fair value of the assets of each Loan Party, at
a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise; (b) the present fair saleable value of the property of
each Loan Party will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and matured;
(c) each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Effective Date. As used
in this Section 3.15, the term “fair value” means the amount at which the
applicable assets would change hands between a willing buyer and a willing
seller within a reasonable time, each having reasonable knowledge of the
relevant facts, neither being under any compulsion to act, with equity to both
and “present fair saleable value” means the amount that may be realized if the
applicable company’s aggregate assets are sold with reasonable promptness in an
arm’s length transaction under present conditions for the sale of a comparable
business enterprises.

Section 3.16. Margin Securities. The Borrower is not engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations U or X of the Board of Governors of the Federal Reserve System),
and, except for the repurchases of the Borrower’s capital stock in accordance
with the limitations in Section 5.10 and Section 6.08, no part of the proceeds
of any Loan will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying margin stock.

ARTICLE IV.

Conditions

Section 4.01. Conditions of Initial Credit Extension. The effectiveness of this
Agreement to amend and restate the Prior Credit Agreement and to obligate the
Lenders to make Loans and the Issuing Bank to issue Letter of Credit hereunder
is subject to the satisfaction of the following conditions:

(a) Execution and Delivery of This Agreement. The Administrative Agent (or its
counsel) shall have received from each party hereto either (i) a counterpart of
this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy or other
electronic transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.

(b) Guaranty Agreement. The Administrative Agent (or its counsel) shall have
received from each Subsidiary Guarantor either (i) a counterpart of the Guaranty
Agreement signed on behalf of such party or (ii) written evidence satisfactory
to the Administrative Agent (which may include telecopy or other electronic
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of the Guaranty Agreement.

 

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(c) Prior Credit Agreement. The Administrative Agent shall have received
evidence that all unpaid interest and fees accrued under the Prior Credit
Agreement through the Effective Date and all other fees, expenses and other
charges outstanding thereunder (including any amounts due under the Prior Credit
Agreement arising as a result of the termination of all interest periods
thereunder on the Effective Date) shall have been paid or shall be paid with the
proceeds of the initial Loans hereunder.

(d) Legal Opinion. The Administrative Agent shall have received a favorable
written opinion (addressed to the Administrative Agent and the Lenders and dated
the Effective Date) of counsel for the Loan Parties covering the matters set
forth in Sections 3.01, 3.02 and 3.03 of this Agreement, such other matters
relating to the Loan Parties, the Loan Documents or the Transactions as the
Required Lenders shall reasonably request. The Loan Parties hereby request such
counsel to deliver such opinions.

(e) Corporate Authorization Documents. The Administrative Agent shall have
received such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of each Loan Party, the authorization of the Transactions and any other
legal matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the Administrative Agent
and its counsel.

(f) Closing Certificate. The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a Vice
President or a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a), (b) and (c) of Section 4.02.

(g) Fees. The Administrative Agent, the Arrangers and the Lenders shall have
received all fees and other amounts due and payable pursuant to any fee letter
between the Borrower and any Arranger or Lender, this Agreement or any other
Loan Document on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all reasonable out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder or under any other
Loan Document or the Administrative Agent, the Arrangers and the Lenders shall
have received evidence that such fees and amounts shall be paid with the
proceeds of the initial Loans hereunder.

(h) Exiting Lenders. The Administrative Agent shall have received those certain
Assignment and Assumption Agreements dated as of the date hereof executed by RBS
Citizens, N.A. and UBS Loan Finance LLC.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 10.02)
at or prior to 3:00 p.m., Dallas, Texas time, on November 1, 2011 (and, in the
event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).

Section 4.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to receipt of the request therefor in
accordance herewith and to the satisfaction of the following conditions:

 

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(a) Representations and Warranties. The representations and warranties of each
Loan Party set forth in the Loan Documents shall be true and correct on and as
of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, except to the extent such
representations and warranties specifically relate to any earlier date in which
case such representations and warranties shall have been true and correct as of
such earlier date;

(b) Revolving Commitments. At the time of and immediately after giving effect to
such Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, the total Revolving Exposure of all Lenders shall not
exceed the total Revolving Commitments of all Lenders; and

(c) No Default. At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall exist.

Each Borrowing (other than in an Interest Election Request to convert an ABR
Loan to a different Type or to continue a Eurodollar Loan) and each issuance,
amendment, renewal or extension of a Letter of Credit shall be deemed to
constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified in paragraphs (a), (b) and (c) of this Section.

Section 4.03. Effective Date Advances and Adjustments. On the Effective Date,
the aggregate amount of the revolving commitments under the Prior Credit
Agreement is being increased hereunder but not all Lenders are participating in
the increase in the Revolving Commitments based on their pro rata percentages
established under the Prior Credit Agreement. As a result, any loans outstanding
under the Prior Credit Agreement which are continued hereunder will not be held
pro rata by the Revolving Lenders in accordance with their Applicable
Percentages determined hereunder. To remedy the foregoing, on the Effective
Date, upon fulfillment of the conditions in Section 4.01 and if there are any
loans outstanding under the Prior Credit Agreement, the Revolving Lenders shall
make advances among themselves (which may be through the Administrative Agent)
so that after giving effect thereto the Revolving Loans will be held by the
Revolving Lenders, pro rata in accordance with their respective Applicable
Percentages hereunder. The advances made on the Effective Date under this
Section by each Revolving Lender whose Applicable Percentage is new or has
increased under this Agreement (as compared to its applicable percentage under
the Prior Credit Agreement) shall be deemed to be a purchase of a corresponding
amount of the Revolving Loans of the Revolving Lender or Revolving Lenders whose
Applicable Percentage has decreased (as compared to its applicable percentage
under the Prior Credit Agreement). The advances made under this Section shall be
Eurodollar Loans made under each Revolving Lender’s Revolving Commitment unless
another type of Borrowing is selected by the Borrower to be applicable thereto.

ARTICLE V.

Affirmative Covenants

Until the Loan Obligations have been Fully Satisfied, the Borrower covenants and
agrees with the Administrative Agent, the Issuing Bank and the Lenders that:

Section 5.01. Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent:

(a) Annual Audit. Within 90 days after the end of each fiscal year of the
Borrower, its (i) audited consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures

 

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for the previous fiscal year, and (ii) a report by KPMG LLP or other independent
public accountants of recognized national standing (without a “going concern” or
like qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;

(b) Quarterly Financial Statements. Within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower, its unaudited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, all certified by
one of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

(c) Compliance Certificate. Concurrently with any delivery of financial
statements under clause (a) or (b) above, a certificate in substantially the
form of Exhibit B hereto of a Financial Officer of the Borrower (i) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken with respect
thereto, (ii) certifying that, as of the date of such certificate, the total
Revolving Exposure of all Lenders does not exceed the total Revolving
Commitments of all Lenders, (iii) setting forth reasonably detailed calculations
demonstrating compliance with Article VII, and (iv) stating whether any change
in GAAP or in the application thereof has occurred since the date of the
Borrower’s audited financial statements referred to in Section 3.04 and, if any
such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate (notwithstanding the foregoing, the
certificate described by this clause (c) for the fiscal quarter ended
September 30, 2011 shall be delivered on or before November 30, 2011);

(d) Debt Rating. Promptly upon receipt thereof, written notice of any downgrade
in any rating of the Borrower’s Indebtedness by Moody’s, S&P or any other rating
agency that issues rating for the Borrower’s Indebtedness;

(e) Senior Unsecured Notes. Promptly after such delivery or receipt, copies of
any financial or other report or notice delivered to, or received from, a holder
of a Senior Unsecured Note, which report or notice has not otherwise been
delivered to the Administrative Agent hereunder; and

(f) Additional Information. Promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of the Borrower or any Subsidiary, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably request.

Documents required to be delivered pursuant to clause (a) or (b) of this
Section 5.01 (to the extent any such documents are included in reports otherwise
filed with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission) shall be deemed to
have been delivered to the Administrative Agent and each Lender on the date the
Borrower has filed such reports with the Securities and Exchange Commission via
the EDGAR filing system and the Borrower has notified the Administrative Agent
in writing of such posting (which notification may be included in the
certificate described in 5.01(c) above).

 

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Section 5.02. Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

(a) Default. The occurrence of any Default;

(b) Notice of Proceedings. The filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower or any Affiliate thereof that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;

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

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

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

Section 5.03. Existence; Conduct of Business. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its (a) legal existence
(except with respect to a Subsidiary which is not a Material Subsidiary where
such failure could not be reasonably expected to result in Material Adverse
Effect) and (b) the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names except where the failure to preserve,
renew or keep in force any such right, license, permit, privilege, franchise,
patent or copyright could not be reasonably expected to result in a Material
Adverse Effect; provided that the foregoing shall not prohibit any merger, sale,
consolidation, liquidation or dissolution permitted under Section 6.03 or
Section 6.05.

Section 5.04. Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, pay its Indebtedness and other obligations, including Tax
liabilities, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP,
(c) such contest effectively suspends collection of the contested obligation and
the enforcement of any Lien securing such obligation and (d) the failure to make
payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.

Section 5.05. Maintenance of Properties. The Borrower will, and will cause each
of its Subsidiaries to, keep and maintain all property material to the conduct
of its business in good working order and condition, ordinary wear and tear
excepted.

Section 5.06. Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurance
companies insurance (or any self-insurance compatible with the following
standard) in such amounts (with no greater risk retention) and against such
risks as are customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar locations.
The Borrower will furnish to the Lenders, upon request of the Administrative
Agent, information in reasonable detail as to the insurance so maintained.

Section 5.07. Guarantee and Secure Loans Equally.

 

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(a) If any Subsidiary (other than an Excluded Foreign Subsidiary) of the
Borrower shall guarantee the obligations of the Borrower under the Senior
Unsecured Notes or under any other agreement creating or evidencing Indebtedness
in excess of $50,000,000, the Borrower shall cause such Subsidiary to guarantee
the Obligations equally and ratably with any and all other obligations
guaranteed by such Subsidiary pursuant to documentation acceptable to the
Administrative Agent.

(b) If the Borrower shall create, assume or permit to exist any Lien upon any of
its property or assets, or permit any Subsidiary (other than an Excluded Foreign
Subsidiary) to create, assume, or permit any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than those Liens
permitted by Section 6.02, the Borrower shall promptly cause the Obligations to
be secured equally and ratably with (and with the same priority of) any and all
other Indebtedness so secured by the Borrower or such Subsidiary pursuant to
documentation acceptable to the Administrative Agent.

(c) In the event that the Borrower certifies to the Administrative Agent and the
Lenders in writing that (i) the Senior Unsecured Notes and all other documents
or agreements evidencing or otherwise relating to any Indebtedness of the
Borrower or any Subsidiary do not contain any covenant or agreement similar to
this Section 5.07 and (ii) no Indebtedness of the Borrower or any Subsidiary
(other than an Excluded Foreign Subsidiary) is secured by Liens other than Liens
permitted by Section 6.02, then this Section 5.07 shall automatically be deemed
to have no further force or effect without any action of the parties hereto. If,
subsequent to such certification from the Borrower, any agreement or document
related to any Indebtedness of the Borrower or any Subsidiary (other than an
Excluded Foreign Subsidiary) contains a covenant or agreement similar to this
Section 5.07, then this Section 5.07 shall automatically be reinstated and shall
be in full force and effect without any action of the parties hereto.

Section 5.08. Books and Records; Inspection and Audit Rights. The Borrower will,
and will cause each of its Subsidiaries to, keep proper books of record and
accounts in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. If no Default or Event
of Default exists, at the expense of the Administrative Agent and the Lenders,
the Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, subject to Section 10.12, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times during normal business hours, as often
as reasonably requested. If a Default or Event of Default exists, at the expense
of the Borrower, the Borrower will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
to visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such times and as often as
requested.

Section 5.09. Compliance with Laws. The Borrower will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

Section 5.10. Use of Proceeds. The proceeds of the Revolving Loans and Swingline
Loans will be used only for payment of fees and expenses payable in connection
with the Transactions and for working capital and other general corporate
purposes of the Borrower and its Subsidiaries. No part of the proceeds of any
Loan will be used, whether directly or indirectly, for any purpose that entails
a violation of any of the Regulations of the Board, including Regulations G, U
and X.

Section 5.11. New Material Subsidiaries. If as of a fiscal quarter end a
Subsidiary that is not party to the Guaranty Agreement is a Material Subsidiary,
then within 45 days after the end of such fiscal quarter the Borrower shall:
(i) cause each such Subsidiary to become a party to the Guaranty Agreement

 

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pursuant to the execution and delivery of a Subsidiary Joinder Agreement (as
defined in the Guaranty Agreement); (ii) cause each such Subsidiary to execute
and/or deliver such other documentation as the Administrative Agent may
reasonably request to evidence the authority of each such Subsidiary to execute,
deliver and perform the Guaranty Agreement and to evidence the existence and
good standing of each such Subsidiary; and (iii) deliver a favorable written
opinion (addressed to the Administrative Agent and the Lenders) of counsel to
each such Subsidiary covering the matters set forth in Sections 3.01, 3.02 and
3.03 of this Agreement and such other matters relating to each such Subsidiary
and the Loan Documents as the Administrative Agent shall reasonably request. The
Borrower requests each such counsel to deliver such opinions.

Section 5.12. Further Assurances. The Borrower will, and will cause each
Subsidiary Guarantor to, execute any and all further documents, agreements and
instruments, and take all such further actions, which may be required under any
applicable law or which the Administrative Agent or the Required Lenders may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents, all at the expense of the Loan Parties.

ARTICLE VI.

Negative Covenants

Until the Loan Obligations have been Fully Satisfied, the Borrower covenants and
agrees with the Administrative Agent, the Issuing Bank, and the Lenders that:

Section 6.01. Indebtedness; Certain Equity Securities. The Borrower will not,
and will not permit any Subsidiary to, create, incur, assume or permit to exist
any Indebtedness, except:

(a) Indebtedness created under the Loan Documents;

(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof or result in an earlier
maturity date or decreased weighted average life thereof;

(c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the
Borrower or any other Subsidiary; provided that Indebtedness of the Borrower or
any Subsidiary Guarantor owed to any Subsidiary that is not a Subsidiary
Guarantor shall be subordinate to the Obligations on terms, and pursuant to
documentation, reasonably satisfactory to the Administrative Agent;

(d) Guarantees by the Borrower or any Subsidiary of Indebtedness of the Borrower
or any Subsidiary which is otherwise permitted by this Section 6.01;

(e)(i) Indebtedness of the Borrower and the Subsidiary Guarantors secured by
fixed or capital assets (including equipment), including Capital Lease
Obligations, (ii) Indebtedness of Subsidiaries of the Borrower that are not
Subsidiary Guarantors (including Foreign Subsidiaries) owed to an unrelated
third Person (other than any Receivable Securitization Outstandings) and
(iii) other Indebtedness of Subsidiary Guarantors owed to an unrelated third
Person; provided that the aggregate amount of Indebtedness permitted by this
clause (e) at any time outstanding shall not exceed an amount equal to 20% of
the Borrower’s and its Subsidiaries consolidated net worth (as determined in
accordance with GAAP);

(f) Indebtedness arising in connection with Swap Agreements permitted by
Section 6.07;

 

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(g) to the extent constituting Indebtedness, deferred compensation payable to
directors, officers or employees of the Borrower and the Subsidiaries;

(h) cash management obligations and Indebtedness incurred by the Borrower or any
Subsidiary in respect of netting services, overdraft protections and similar
arrangements, in each case entered into in the ordinary course of business in
connection with cash management and deposit accounts and not involving the
borrowing of money; and

(i) Indebtedness of the Borrower or any Subsidiary owing to Lake Park Insurance,
Ltd. in an aggregate principal amount not to exceed $60,000,000 at any time
outstanding provided that no more than $35,000,000 of the principal amount of
such Indebtedness may be secured by Liens permitted under Section 6.02(f);

(j) Receivable Securitization Outstandings in an aggregate principal amount not
to exceed $300,000,000;

(k) Indebtedness outstanding under the Senior Unsecured Notes on the Effective
Date (but specifically excluding any extensions, renewals, refinancings or
replacements of such Indebtedness); and

(l) unsecured Indebtedness of the Borrower in addition to that permitted by
other provisions of this Section 6.01 provided that (i) no Default has occurred
and is continuing at the time such unsecured Indebtedness is incurred or would
result from the incurrence thereof and (ii) after giving pro forma effect to
such unsecured Indebtedness, the Borrower shall be in compliance with the
financial covenants set out in Article VII as calculated for the four fiscal
quarter period most recently ended as if such unsecured Indebtedness had been
incurred as of the first date of such four fiscal quarter period (and to the
extent such Indebtedness bears interest at a floating rate, using the rate in
effect at the time of calculation for the entire period of calculation).

The Borrower will not permit Lake Park Insurance, Ltd. to directly or indirectly
create, assume, Guarantee or otherwise become directly or indirectly liable with
respect to any Indebtedness except for Indebtedness arising in the ordinary
course of business in connection with insurance and reinsurance policies it has
entered into or may enter into in the ordinary course of business.

The Borrower will not permit any Subsidiary to issue any preferred stock or
other preferred Equity Interests unless such preferred Equity Interests are
issued to and at all times owned by the Borrower or another Loan Party.

Section 6.02. Liens. The Borrower will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:

(a) Liens created under the Loan Documents;

(b) Permitted Encumbrances;

(c) any Lien on any asset of the Borrower or any Subsidiary existing on the date
hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not
apply to any other asset of the Borrower or any Subsidiary and (ii) such Lien
shall secure only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

 

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(d) any Lien existing on any fixed or capital asset (including equipment) prior
to the acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date hereof
prior to the time such Person becomes a Subsidiary; provided that (i) such Lien
is not created in contemplation of or in connection with such acquisition or
such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not
apply to any other assets of the Borrower or any Subsidiary, (iii) such Lien
shall secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof, and (iv) the aggregate principal amount of
all Indebtedness secured by Liens permitted by this clause (d) shall not at any
time exceed $25,000,000;

(e) Liens on fixed or capital assets (including equipment) acquired, constructed
or improved by the Borrower or any Subsidiary; provided that (i) such security
interests secure Indebtedness permitted by subclause (i) of Section 6.01(e),
including Capital Lease Obligations, (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such security
interests shall not apply to any other property or assets of the Borrower or any
Subsidiary;

(f) Liens on property of the Borrower or any of its Subsidiaries securing
Indebtedness owing to Lake Park Insurance, Ltd. permitted by Section 6.01(i)
provided that the aggregate principal amount of all Indebtedness secured by such
Liens shall not at any time exceed $35,000,000;

(g)(i) Liens on property of the Borrower or any of its Subsidiaries securing
Indebtedness owing to a Loan Party permitted by Section 6.01(c) and (ii) Liens
on property of any Subsidiary that is not a Material Subsidiary securing
Indebtedness owing to any other Subsidiary that is not a Material Subsidiary
permitted by Section 6.01(c);

(h) Liens securing Indebtedness of Foreign Subsidiaries permitted by subclause
(ii) of Section 6.01(e) provided that such Liens encumber only assets of the
Foreign Subsidiaries;

(i) Liens granted in connection with any Receivable Securitization Facility
permitted hereunder on the receivables sold pursuant thereto (together with all
collections and other proceeds thereof and any collateral securing the payment
thereof), all right, title and interest in and to the lockboxes and other
collection accounts in which proceeds of such receivables are deposited, the
rights under the documents executed in connection with such Receivable
Securitization Facility and in the Equity Interests issued by any special
purpose entity organized to purchase the receivables thereunder;

(j) Liens on cash securing Indebtedness arising in connection with Swap
Agreements permitted by Section 6.07; and

(k) other Liens not otherwise permitted by this Section 6.02 provided that the
aggregate book value of assets subject to the Liens permitted by this clause
(k) does not exceed $5,000,000 at any time.

Section 6.03. Fundamental Changes.

(a) The Borrower will not, nor will it permit any Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary may merge into the Borrower in a

 

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transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary in a transaction in which the surviving
entity is a Subsidiary and, if any party to such merger is a Subsidiary
Guarantor, is a Subsidiary Guarantor; (iii) any Subsidiary or the Borrower may
merge into another Person in connection with an acquisition permitted by
Section 6.04 as long as the Subsidiary or the Borrower is the surviving Person
and no Default exists or would result and (iv) any Subsidiary may liquidate,
dissolve or be transferred if the Borrower determines in good faith that such
liquidation, dissolution or transfer is in the best interests of the Borrower
and is not materially disadvantageous to the Lenders and if such Subsidiary is a
Subsidiary Guarantor, its assets are transferred to the Borrower or a Subsidiary
Guarantor; provided that any such merger involving a Person that is not a wholly
owned Subsidiary immediately prior to such merger shall not be permitted unless
also permitted by Section 6.04 or Section 6.05.

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

Section 6.04. Investments, Loans, Advances and Acquisitions. The Borrower will
not, and will not permit any of its Subsidiaries to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly owned
Subsidiary prior to such merger) any Equity Interests in or evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, or make or permit to exist any investment or any other interest in,
any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any assets of any other Person constituting a business
unit, except:

(a) Permitted Investments;

(b) investments existing on the date hereof and set forth on Schedule 6.04;

(c) investments by the Borrower and its Subsidiaries in Equity Interests in
their respective Subsidiaries;

(d) loans or advances made by the Borrower to any Subsidiary and made by any
Subsidiary to the Borrower or any other Subsidiary; provided that such loans and
advances shall be subject to the conditions set forth in Section 6.01(c);

(e) investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;

(f) notes and other non–cash consideration received as part of the purchase
price of assets disposed of pursuant to Section 6.05;

(g) extension of trade credit in the ordinary course of business;

(h) Swap Agreements permitted by Section 6.07;

(i) loans and advances to officers, directors, and employees of the Borrower and
the Subsidiaries made in the ordinary course of business for travel and
entertainment expenses, relocation costs and similar purposes up to a maximum
for all such loans and advances of $10,000,000 in the aggregate at any one time
outstanding;

 

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(j) endorsements of items for collection or deposit in the ordinary course of
business;

(k) Borrower or a Subsidiary may purchase, hold or acquire (including pursuant
to a merger) all the Equity Interests in a Person and may purchase or otherwise
acquire (in one transaction or a series of transactions) all or substantially
all of the assets of any other Person or all or substantially all of the assets
of a division or branch of such Person, if, with respect to each such
acquisition:

(i) Default. No Default exists or would result therefrom;

(ii) Pro Forma Compliance. The Borrower shall be in compliance with the
covenants contained in Article VII on a pro forma basis for the four (4) fiscal
quarter period then most recently ending (assuming that the incurrence or
assumption of any Indebtedness in connection with the proposed purchase or
acquisition occurred on the first day of such period and to the extent such
Indebtedness bears interest at a floating rate, using the rate in effect at the
time of calculation for the entire period of calculation); and

(iii) Delivery and Notice Requirements. Borrower shall provide to Administrative
Agent, within five days after the consummation of any acquisition with a
purchase price in excess of $50,000,000, the following: (A) notice of the
acquisition and (B) a certificate signed by a Financial Officer of the Borrower
certifying: (1) that after giving effect to the acquisition in question, all
representations and warranties contained in the Loan Documents were true and
correct on and as of the date of the closing of the acquisition with the same
force and effect as if such representations and warranties had been made on and
as of such date, except to the extent that such representations and warranties
relate specifically to an earlier date (and such representations and warranties
were true and correct as of such earlier date); (2) that no Default exists or
will result from the acquisition; and (3) to the Borrower’s calculation of its
compliance with clause (ii) of this clause (k);

(l) investments in the Equity Interests in the special purpose entities
established in connection with any Receivable Securitization Facility provided
that the aggregate amount of cash invested by the Borrower and its Subsidiaries
in all such entities shall not exceed $1,000,000;

(m) other investments not otherwise permitted by this Section 6.04 provided that
the aggregate book value of all investments made under the permissions of this
clause (m) does not exceed $1,000,000 at any time; and

(n) in addition to the investments otherwise permitted by this Section 6.04, the
Borrower and each Subsidiary may purchase, hold or acquire Equity Interests in
or other securities or assets of, make loans or advances to, or make any other
investment in, any other Person if (i) no Default exists or would result from
the making of such acquisition, loan, advance or investment and (ii) the
Borrower is in pro forma compliance with the financial covenants set forth in
Article VII for the four fiscal quarter period most recently ended after giving
effect to such acquisition, loan, advance or investment and after giving effect
to any Indebtedness incurred in connection therewith; provided, any acquisition
of all of the Equity Interests in a Person, or all or substantially all of the
assets of a Person, shall be subject to the terms of clause (k) of this
Section 6.04.

Section 6.05. Asset Sales. The Borrower will not, and will not permit any of the
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will the Borrower permit any of
it Subsidiaries to issue any additional Equity Interest in such Subsidiary,
except:

 

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(a) sales, leases (or subleases), licenses (or sublicenses) or other transfers
and dispositions of inventory, used, worn-out, obsolete or surplus equipment,
property, property no longer needed or useful, and Permitted Investments, each
in the ordinary course of business, and sales of real estate to the extent such
property is exchanged for credit against the purchase price of similar
replacement property or the proceeds of such sale are reasonably promptly
applied to the purchase price of such replacement property;

(b) sales, transfers and other dispositions of receivables, or undivided
interests therein, together with all collections and other proceeds thereof and
any collateral securing the payment thereof pursuant to any Receivable
Securitization Facility;

(c) if Indebtedness under the Senior Unsecured Notes is outstanding,
dispositions of certain business segments (other than domestic heating, cooling
and refrigeration businesses) as long as (i) no Default exists or would result
from the making of such disposition, (ii) the book value of assets disposed of
by the Borrower and its Subsidiaries in any calendar year in reliance on this
clause (c) does not exceed ten percent (10%) of consolidated net assets of the
Borrower and its Subsidiaries, and (iii) the EBITDA attributable to the assets
disposed of by the Borrower and its Subsidiaries in reliance on this clause
(c) in any calendar year does not represent more than 5% of EBITDA of the
Borrower and its Subsidiaries for the prior calendar year;

(d) if Indebtedness under the Senior Unsecured Notes is outstanding, other
dispositions as long as (i) no Default exists or would result from the making of
such disposition, (ii) the book value of assets disposed of by the Borrower and
its Subsidiaries in any calendar year in reliance on this clause (d) does not
exceed five percent (5%) of consolidated net assets of the Borrower and its
Subsidiaries, and (iii) the EBITDA attributable to the assets disposed of by the
Borrower and its Subsidiaries in reliance on this clause (d) in any calendar
year does not represent more than 5% of EBITDA of the Borrower and its
Subsidiaries for the prior calendar year; and

(e) if no Indebtedness under the Senior Unsecured Notes is outstanding, other
dispositions of assets (including dispositions of certain businesses other than
domestic heating, cooling and refrigeration businesses) as long as (i) no
Default exists or would result from the making of such disposition and (ii) the
total of any EBITDA attributable to the assets disposed of by the Borrower and
its Subsidiaries in any calendar year in reliance on this clause (e) does not
represent more than 20% of EBITDA of the Borrower and its Subsidiaries for the
prior calendar year;

provided that all sales, transfers, leases and other dispositions permitted
hereby shall be made for fair value. Notwithstanding the foregoing, the Borrower
or any Subsidiary shall be permitted to make any sale, transfer, lease or
disposition of any asset otherwise prohibited by this Section 6.05, if within
one year of disposing of such asset, the Borrower or a Subsidiary of the
Borrower applies or commits to apply an amount equal to the fair market value of
such asset to: (a) redeem the Senior Unsecured Notes, (b) repay Indebtedness for
borrowed money having a maturity of more than twelve (12) months (other than any
Indebtedness owed to the Borrower or a Material Subsidiary), (c) acquire,
construct, develop or improve properties, facilities, or equipment of the
Borrower or any Material Subsidiary, or (d) any combination thereof.

Section 6.06. Sale and Leaseback Transactions. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred, except for (i) any such sale of any fixed or capital assets that is
made for cash consideration in an amount not less than the cost of such fixed or

 

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capital asset and is consummated within 90 days after the Borrower or such
Subsidiary acquires or completes the construction of such fixed or capital
asset; and (ii) other sale and leaseback transactions, provided that any
Indebtedness that may be incurred with any such sale and leaseback transaction
is permitted under Section 6.01 and the assets to be sold in connection such
sale and leaseback transaction are permitted to be sold pursuant to
Section 6.05.

Section 6.07. Swap Agreements. The Borrower will not, and will not permit any of
its Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which the Borrower or any Subsidiary
has actual exposure (other than those in respect of Equity Interests of the
Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest–bearing liability or investment of the Borrower or
any Subsidiary.

Section 6.08. Restricted Payments. The Borrower will not, nor will it permit any
Subsidiary to, declare or make, or agree to pay or make, directly or indirectly,
any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so, except (a) Subsidiaries may declare and pay dividends ratably with respect
to their capital stock and (b) Borrower may make any Restricted Payment so long
as no Default exists or would result from the making of such Restricted Payment.

Section 6.09. Transactions with Affiliates. The Borrower will not, nor will it
permit any Subsidiary to, sell, lease or otherwise transfer (in a single
transaction or a series of related transactions) property or assets having an
aggregate book value in excess of $1,000,000 to, or purchase, lease or otherwise
acquire (in a single transaction or a series of related transactions) property
or assets having an aggregate book value in excess of $1,000,000 from, or
otherwise engage in any other transactions with, any of its Affiliates, except
(a) transactions in the ordinary course of business that are at prices and on
terms and conditions not less favorable to the Borrower or such Subsidiary than
could be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Borrower and the Subsidiary Guarantors not
involving any other Affiliate and (c) any Restricted Payment permitted by
Section 6.08.

Section 6.10. Restrictive Agreements. The Borrower will not, nor will it permit
any Subsidiary to, directly or indirectly, enter into, incur or permit to exist
any agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of the Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets, or (b) the
ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or
any other Subsidiary; provided that:

(i) the foregoing shall not apply to restrictions and conditions imposed by law
or by any Loan Document,

(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.10 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition),

(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to leases and other contracts restricting the
assignment thereof, or to agreement relating to the sale of a Subsidiary or any
asset or property pending such sale, provided such restrictions and conditions
apply only to the Subsidiary, asset or property that is to be sold and such sale
is permitted hereunder,

 

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(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness,

(v) clause (a) of the foregoing shall not apply to customary provisions in
leases, licenses and other contracts restricting the assignment thereof,

(vi) clause (a) of the foregoing shall not apply to customary provisions in the
documentation evidencing any Receivable Securitization Facility that impose
restrictions on the ability of the special purpose entity party thereto to
declare, pay or set aside funds for the making of any distribution in respect of
the Equity Interests issued by such entity,

(vii) the foregoing shall not apply to restrictions or conditions with respect
to a Subsidiary that is not a Subsidiary on the Effective Date, provided that
such restrictions or conditions (A) are in existence at the time such Person
becomes a Subsidiary and are not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary and (B) apply only to such
Subsidiary and do not extend to the Borrower or any other Subsidiary or any of
their respective assets,

(viii) the foregoing shall not apply to customary provisions contained in
agreements entered into in connection with Indebtedness owed by any Foreign
Subsidiary that impose restrictions on the ability of such Foreign Subsidiary to
grant Liens on its property to declare, pay or set aside funds for the making of
any distribution in respect of the Equity Interests issued by such Foreign
Subsidiary, and

(ix) the foregoing shall not apply to restrictions or conditions contained in
agreements evidencing, or executed in connection with, unsecured Indebtedness
permitted by Section 6.01(l) as long as such agreements do not prohibit (A) the
Obligations to be secured on a pari passu basis and (B) Liens on assets of the
Borrower and its Subsidiaries on terms substantially similar to (and no more
restrictive than) the terms of Section 6.02 hereof.

Section 6.11. Amendment of Material Documents. The Borrower will not, nor will
it permit any Subsidiary to, amend, modify or waive any of its rights under
(a) its certificate of incorporation, by-laws or other organizational documents
in a manner adverse to the Administrative Agent or the Lenders or (b) the Senior
Unsecured Notes.

Section 6.12. Change in Fiscal Year. The Borrower will not change the manner in
which the last day of its fiscal year is calculated.

ARTICLE VII.

Financial Covenants

Until the Loan Obligations have been Fully Satisfied, the Borrower covenants and
agrees with the Administrative Agent, the Issuing Bank, and the Lenders that:

Section 7.01. Leverage Ratio. As of the last day of each fiscal quarter, the
Borrower shall not permit the ratio of Total Indebtedness as of such date to
Adjusted EBITDA for the four (4) fiscal quarters then ended to exceed 3.50 to
1.00.

Section 7.02. Interest Coverage Ratio. As of the last day of each fiscal
quarter, the Borrower shall not permit the ratio of:

 

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(a)

EBITDA for the four (4) fiscal quarters then ended minus Capital Expenditures
made by the Borrower and its Subsidiaries during such four (4) fiscal quarters;
to

 

 

(b)

the sum of Interest Expense for the Borrower and its Subsidiaries during such
four (4) fiscal quarters minus total interest income received by the Borrower
and its Subsidiaries during such four (4) fiscal quarters,

to be less than 3.00 to 1.00.

ARTICLE VIII.

Events of Default

Section 8.01. Events of Default; Remedies. If any of the following events
(“Events of Default”) shall occur:

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

(b) Interest, Fees, and other Payments. the Borrower shall fail to pay (i) any
interest on any Loan or any fee payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of five (5) Business Days or (ii) any
amount under this Agreement or any other Loan Document (other than principal,
interest or fees), when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of ten (10) days;

(c) Representations or Warranties. any representation, warranty or certification
made or deemed made by or on behalf of the Borrower or any Subsidiary in or in
connection with any Loan Document or any amendment or modification thereof or
waiver thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to have been
incorrect in any material respect (except for any representation or warranty
that is qualified by materiality, Material Adverse Effect or similar phrase
which shall prove to be incorrect in any respect), when made or deemed made;

(d) Covenant Violation; Immediate Default. the Borrower shall fail to observe or
perform any covenant, condition or agreement contained in Sections 5.02, 5.03(a)
(with respect to the existence of the Borrower or any Material Subsidiary) or
5.11 or in Article VI or in Article VII;

(e) Covenant Violation with Cure Period. any Loan Party shall fail to observe or
perform any covenant, condition or agreement contained in any Loan Document
(other than those specified in clause (a), (b) or (d) of this Section 8.01), and
such failure shall continue unremedied for a period of 30 days after the earlier
of (i) the date on which the Chief Executive Officer, the General counsel, or a
Financial Officer of such Loan Party becomes aware of such failure or
(ii) notice thereof from the Administrative Agent to the Borrower (which notice
will be given at the request of any Lender);

(f) Cross Payment Default. the Borrower or any Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable
(subject to any applicable grace period);

 

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(g) Cross Covenant Default. any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness;

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

(i) Voluntary Bankruptcy. the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Section 8.01, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any Subsidiary
or for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing;

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

(k) Judgments. one or more final judgments for the payment of money in an
aggregate amount in excess of $75,000,000 (to the extent not covered by
independent third-party insurance) shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Subsidiary to enforce any such
judgment;

(l) ERISA Event. ERISA Event shall have occurred that when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;

(m) Invalidity of Loan Documents. the Guaranty Agreement shall otherwise for any
reason cease to be in full force and effect and valid, binding and enforceable
in accordance with its terms after its date of execution, or the Borrower or any
Subsidiary Guarantor shall so state in writing; or

(n) Change in Control. a Change in Control shall occur;

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to

 

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be due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other notice of any kind, all of which are
hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Section, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are hereby waived by the
Borrower. In addition, if any Event of Default exists, the Administrative Agent
may (and if directed by the Required Lenders, shall) foreclose or otherwise
enforce any Lien granted to the Administrative Agent, for the benefit of the
Secured Parties, to secure payment and performance of the Obligations in
accordance with the terms of the Loan Documents and exercise any and all rights
and remedies afforded by the laws of the State of New York or any other
jurisdiction, by any of the Loan Documents, by equity, or otherwise.

Section 8.02. Performance by the Administrative Agent. If any Loan Party shall
fail to perform any covenant or agreement in accordance with the terms of the
Loan Documents, the Administrative Agent may, and shall at the direction of the
Required Lenders, perform or attempt to perform such covenant or agreement on
behalf of the applicable Loan Party. In such event, the Borrower shall, at the
request of the Administrative Agent promptly pay any amount expended by the
Administrative Agent or the Lenders in connection with such performance or
attempted performance to the Administrative Agent, together with interest
thereon at the interest rate provided for in Section 2.12(c) from and including
the date of such expenditure to but excluding the date such expenditure is paid
in full. Notwithstanding the foregoing, it is expressly agreed that neither the
Administrative Agent nor any Lender shall have any liability or responsibility
for the performance of any obligation of any Loan Party under any Loan Document.

Section 8.03. Limitation on Separate Suit. No suit shall be brought against any
Loan Party on account of the Loan Obligations except by the Administrative
Agent, acting upon the written instructions of the Required Lenders.

ARTICLE IX.

The Administrative Agent

Section 9.01. Appointment. Each of the Lenders and the Issuing Bank hereby
irrevocably appoints JPMorgan Chase Bank, National Association as agent on its
behalf, and on behalf of each of its Affiliates who are owed Obligations (each
such Affiliate by acceptance of the benefits of the Loan Documents hereby
ratifying such appointment) and authorizes the Administrative Agent to take such
actions on its behalf and on behalf of such Affiliates and to exercise such
powers as are delegated to the Administrative Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.

Section 9.02. Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent, and such Person and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if it were not the
Administrative Agent hereunder.

 

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Section 9.03. Limitation of Duties and Immunities. The Administrative Agent
shall not have any duties or obligations except those expressly set forth in the
Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default exists, (b) the Administrative Agent
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 10.02), and (c) except as expressly set forth in the Loan Documents, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to any Loan Party
that is communicated to or obtained by the Person serving as Administrative
Agent or any of its Affiliates in any capacity. The Administrative Agent shall
not be liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 10.02) or in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall not be deemed to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and 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 any
Loan Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.

Section 9.04. Reliance on Third Parties. 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 believed by it to be genuine and to have been signed or sent 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 be made by the proper Person,
and shall not incur any liability for relying thereon. The Administrative Agent
may consult with legal counsel (who may be counsel for any Loan Party),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

Section 9.05. Sub-Agents. The Administrative Agent may perform any and all its
duties and exercise its rights and powers 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 its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory provisions
of this Article shall apply to any such sub-agent and to the Related Parties of
each Administrative Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

Section 9.06. Successor Agent. Subject to the appointment and acceptance of a
successor the Administrative Agent as provided in this paragraph, the
Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders
shall have the right, in consultation with the Borrower, to appoint a successor.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders and the Issuing Bank, appoint a successor
Administrative Agent which shall be a bank with an office in New York, New York,
or an Affiliate of any such bank. Upon the acceptance of its appointment as
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such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 10.03 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 it was acting as Administrative
Agent.

Section 9.07. Independent Credit Decisions. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender 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 and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.

Section 9.08. Other Agents. Each of Bank of America, N.A. and Wells Fargo Bank,
N.A. has been designated as a “syndication agent” hereunder in recognition of
the level of its Revolving Commitments. Each of PNC Bank, National Association
and The Bank of Tokyo-Mitsubishi UFJ Ltd. has been designated as a
“documentation agent” hereunder in recognition of the level of its Revolving
Commitments. U.S. Bank National Association has been designated as “managing
agent” hereunder in recognition of the level of its Revolving Commitments. None
of such institutions is an agent for the Lenders and no such Lender shall have
any obligation hereunder other than those existing in its capacity as a Lender.
Without limiting the foregoing, no such Lender shall have or be deemed to have
any fiduciary relationship with or duty to any Lender.

Section 9.09. Powers and Immunities of Issuing Bank. Neither the Issuing Bank
nor any of its Related Parties shall be liable for any action taken or omitted
to be taken by any of them hereunder or otherwise in connection with any Loan
Document except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the preceding sentence, the Issuing Bank
(a) shall have no duties or responsibilities except those expressly set forth in
the Loan Documents, and shall not by reason of any Loan Document be a trustee or
fiduciary for any Lender or for the Administrative Agent, (b) shall not be
required to initiate any litigation or collection proceedings under any Loan
Document, (c) shall not be responsible to any Lender or the Administrative Agent
for any recitals, statements, representations, or warranties contained in any
Loan Document, or any certificate or other documentation referred to or provided
for in, or received by any of them under, any Loan Document, or for the value,
validity, effectiveness, enforceability, or sufficiency of any Loan Document or
any other documentation referred to or provided for therein or for any failure
by any Person to perform any of its obligations thereunder, (d) may consult with
legal counsel (including counsel for the Borrower), independent public
accountants, and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants, or experts, and (e) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate, or other instrument or writing believed by it to be
genuine and signed or sent by the proper party or parties. As to any matters not
expressly provided for by any Loan Document, the Issuing Bank shall in all cases
be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders, and such
instructions of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and the Administrative
Agent; provided, however, that the Issuing Bank shall not be required to take
any action which exposes it to personal liability or which is contrary to any
Loan Document or applicable law.

 

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Section 9.10. Authorized Release of Subsidiary Guarantor. If:

(a) no Default exists or would result; and

(b) the Administrative Agent shall have received a certificate of a Responsible
Officer of the Borrower requesting the release of a Subsidiary Guarantor,
certifying that (A) no Default exists or will result from the release of the
Subsidiary Guarantor; and (B) the Administrative Agent is authorized to release
such Subsidiary Guarantor because the Equity Interest issued by such Subsidiary
Guarantor or the assets of such Subsidiary Guarantor have been sold in a
transaction permitted by Section 6.05 (including with the consent of the
Required Lenders pursuant to Section 10.02(b));

then the Administrative Agent is irrevocably authorized by the Secured Parties,
without any consent or further agreement of any Secured Party to release such
Subsidiary Guarantor from all obligations under the Loan Documents. To the
extent the Administrative Agent is required to execute any release documents in
accordance with the immediately preceding sentence, the Administrative Agent
shall do so promptly upon request of the Borrower without the consent or further
agreement of any Secured Party.

Section 9.11. Lender Affiliates Rights. By accepting the benefits of the Loan
Documents, any Affiliate of a Lender that is owed any Obligation is bound by the
terms of the Loan Documents. But notwithstanding the foregoing: (a) neither the
Administrative Agent, any Lender nor any Loan Party shall be obligated to
deliver any notice or communication required to be delivered to any Lender under
any Loan Documents to any Affiliate of any Lender; and (b) no Affiliate of any
Lender that is owed any Obligation shall be included in the determination of the
Required Lenders or entitled to consent to, reject, or participate in any manner
in any amendment, waiver or other modification of any Loan Document. The
Administrative Agent shall not have any liabilities, obligations or
responsibilities of any kind whatsoever to any Affiliate of any Lender who is
owed any Obligation. The Administrative Agent shall deal solely and directly
with the related Lender of any such Affiliate in connection with all matters
relating to the Loan Documents. The Obligation owed to such Affiliate shall be
considered the Obligation of its related Lender for all purposes under the Loan
Documents and such Lender shall be solely responsible to the other parties
hereto for all the obligations of such Affiliate under any Loan Document.

Section 9.12. Resignation of Bank of America, N.A. Effective upon the
satisfaction of the conditions precedent set forth in Section 4.01, Bank of
America, N.A. (a) resigns as the “Administrative Agent” and “Swingline Lender”
under the Prior Credit Agreement and the “Loan Documents” (as defined in the
Prior Credit Agreement) and (b) assigns all of its right, title and interest as
the “Administrative Agent” and “Swingline Lender” under the Prior Credit
Agreement and the “Loan Documents” (as defined in the Prior Credit Agreement) to
JPMorgan Chase Bank, National Association, its capacity as the Administrative
Agent hereunder. Bank of America, N.A. agrees that, on and after the Effective
Date, it shall promptly execute such documentation and take such actions as the
Administrative Agent may reasonably request in order to vest in the
Administrative Agent all rights and powers of Bank of America, N.A. as the
“Administrative Agent” and “Swingline Lender” under the Prior Credit Agreement
and the “Loan Documents” (as defined in the Prior Credit Agreement).

ARTICLE X.

Miscellaneous

Section 10.01. Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone or other means, 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 telecopy, as follows:

 

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(i) if to the Borrower or to any Subsidiary Guarantor, to it at 2140 Lake Park
Boulevard, Richardson, Texas, 75080, Attention of Rick Pelini, Vice President,
Treasurer (Telecopy No. 972.497.6940);

(ii) if to the Administrative Agent, the Issuing Bank or the Swingline Lender,
to JPMorgan Chase Bank, National Association, 2200 Ross Avenue, Third Floor,
Dallas, Texas 75201, Attention: Gregory T. Martin, Vice President, Telephone:
214.965.2171; Telecopy: 214.965.2044 and JPMorgan Chase Bank, National
Association, Midcorp Loan and Agency Services Group, Mailcode: IL1-001010; 10
South Dearborn Street, 7th Floor, Chicago, IL 60603; Attention: Nan Wilson,
Telephone: 312-385-7084; Telecopy: 888-292-9533; and

(iii) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.

Notices and other communications to the Lenders hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications. Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.

Section 10.02. Waivers; Amendments.

(a) No Waiver; Rights Cumulative. No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising, and no course of dealing
with respect to, any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Issuing Bank and the Lenders hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.

(b) Amendments. Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except
(x) pursuant to an Increased Commitment Supplement executed in accordance with
the terms and conditions of Section 2.19 which only needs to be signed by the
Borrower, the Administrative Agent and the Lenders increasing or providing new
Revolving Commitments thereunder if the Increased Commitment Supplement does not
increase the aggregate amount of the Revolving Commitments to an amount in
excess of $750,000,000 and (y) in the case of this Agreement and any
circumstance other than as described in clause (x) pursuant to an agreement or
agreements in writing entered into by the Borrower and the Required Lenders or,
in the case of any other Loan Document, pursuant to an agreement or agreements
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the Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender (including any such Lender that is a Defaulting
Lender), (ii) reduce or forgive the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce or forgive any
interest or fees payable hereunder, without the written consent of each Lender
(including any such Lender that is a Defaulting Lender) directly affected
thereby, (iii) postpone any scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any date for the payment of any interest, fees
or other Obligations payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender (including any such
Lender that is a Defaulting Lender) directly affected thereby, (iv) change
Section 2.08(c) in a manner that would alter the manner in which commitments of
any Class are reduced, without the written consent of each Lender (including any
such Lender that is a Defaulting Lender) directly affected thereby, (v) change
Section 2.17(b), (c) or (f) in a manner that would alter the manner in which
payments are shared, without the written consent of each Lender (including any
such Lender that is a Defaulting Lender), (vi) change any of the provisions of
this Section or the definition of “Required Lenders”, “Loan Party” or
“Obligation” (or any term defined therein) or any other provision of any Loan
Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (including any such Lender that is a Defaulting Lender) directly
affected thereby, (vii) change Section 2.20, without the consent of each Lender
(other than any Defaulting Lender), or (viii) release any Loan Party from its
obligation under the Guaranty Agreement (except as otherwise permitted herein or
in the other Loan Documents), without the written consent of each Lender (other
than any Defaulting Lender); provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Issuing Bank or the Swingline Lender hereunder without the prior
written consent of the Administrative Agent, the Issuing Bank or the Swingline
Lender, as the case may be (it being understood that any change to Section 2.20
shall require the consent of the Administrative Agent, the Issuing Bank and the
Swingline Lender).

Section 10.03. Expenses; Indemnity; Damage Waiver.

(a) Expenses. The Borrower shall pay (i) all reasonable and documented
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 and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable and documented out-of-pocket expenses incurred
by the Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) all reasonable and documented out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Bank or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, the
Issuing Bank or any Lender, in connection with the enforcement or protection of
its rights in connection with the Loan Documents, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.

(b) Indemnity. THE BORROWER SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE
ISSUING BANK AND 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

 

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REASONABLE AND DOCUMENTED FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY
INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF (I) THE EXECUTION OR DELIVERY OF THE PRIOR
CREDIT AGREEMENT, THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER AGREEMENT
OR INSTRUMENT CONTEMPLATED HEREBY, THE PERFORMANCE BY THE PARTIES TO THE LOAN
DOCUMENTS OF THEIR RESPECTIVE OBLIGATIONS THEREUNDER OR THE CONSUMMATION OF THE
TRANSACTIONS OR ANY OTHER TRANSACTIONS CONTEMPLATED HEREBY, (II) ANY LOAN OR
LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY
THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE
DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH
THE TERMS OF SUCH LETTER OF CREDIT), (III) THE FAILURE TO PAY ANY LC
DISBURSEMENT DENOMINATED IN A FOREIGN CURRENCY IN WHICH SUCH LETTER OF CREDIT
WAS ISSUED, (IV) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS
MATERIALS ON OR FROM ANY PROPERTY CURRENTLY OR FORMERLY OWNED OR OPERATED BY THE
BORROWER OR ANY OF THE SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN
ANY WAY TO THE BORROWER OR ANY OF THE SUBSIDIARIES, OR (V) 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 ANY LOAN PARTY, AND REGARDLESS OF WHETHER ANY
INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY
INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR RELATED EXPENSES 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. WITHOUT LIMITING ANY
PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT EACH INDEMNITEE SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST
ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS’ FEES AND EXPENSES)
ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH
INDEMNITEE. THE BORROWER AND EACH OF ITS SUBSIDIARIES WAIVE ANY AND ALL CLAIMS,
OFFSETS, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO
THE EFFECTIVE DATE AND RELATING TO THE PRIOR CREDIT AGREEMENT OR ANY OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

(c) Lender’s Agreement to Pay. To the extent that the Borrower fails to pay any
amount required to be paid by it to the Administrative Agent, the Issuing Bank
or the Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender’s pro rata share (determined
as of the time that the 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, the Issuing
Bank or the Swingline Lender in its capacity as such. For purposes hereof, a
Lender’s “pro rata share” shall be determined based upon its share of the sum of
the total Revolving Exposures and unused Commitments at the time.

(d) Waiver of Damages. To the extent permitted by applicable law, no Loan Party
shall assert, and each Loan Party waives, any claim against any Indemnitee, on
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special, indirect, incidental, consequential or punitive damages (as opposed to
direct or actual damages) arising out of, in connection with, or as a result of,
the Loan Documents or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

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

Section 10.04. Successors and Assigns.

(a) Successors and Assigns. The provisions of this Agreement are binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit, any Affiliate of a Lender who is owed any of the
Obligations and any Indemnitee), except that (i) the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. 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 (including any
Affiliate of the Issuing Bank that issues any Letter of Credit, any Affiliate of
a Lender who is owed any of the Obligations and any Indemnitee), Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

(b) Assignment. (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:

(A) the Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Lender or an Affiliate of a Lender or, if an Event of Default
exists, any other Person; and

(B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of any Revolving Commitment to an
assignee that is a Lender or an Affiliate of a Lender.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender,
or an Approved Fund, or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or 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) shall not be less than
$5,000,000 unless each of the Borrower and the Administrative Agent otherwise
consent, provided that no such consent of the Borrower shall be required if an
Event of Default exists;

(B) 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,
provided that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans;

 

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(C) 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; and

For the purposes of this Section 10.04(b), the term “Approved Fund” means any
Person (other than a natural person) that is engaged in making, purchasing,
holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

Notwithstanding the foregoing, no assignment under this Section 10.04 shall be
made to (x) the Borrower or any of the Borrower’s Affiliates or Subsidiaries,
(y) any Defaulting Lender or any of its subsidiaries, or any Person who, upon
becoming a Lender hereunder, would constitute any of the foregoing Persons
described in this clause (y), or (z) a natural person.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.14, 2.15, 2.16 and 10.03). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 10.04 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
paragraph (c) of this Section.

(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices 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 Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, the Borrower, the Administrative Agent, the Issuing Bank and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to this Agreement or any other Loan
Document, the Administrative Agent shall have no obligation to accept such
Assignment and Assumption and record the information therein in the Register
unless and until such payment shall have been made in full, together with all
accrued interest thereon. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

 

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(c) Participations. (i) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a “Participant”) in all
or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.14, 2.15
and 2.16 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.17(c) as though it were a Lender.

(ii) A Participant shall not be entitled to receive any greater payment under
Sections 2.14 or 2.16 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.16(e) as
though it were a Lender.

(d) Pledge. Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

Section 10.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing
Bank or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect until the Obligations have been Fully
Satisfied. The provisions of Sections 2.14, 2.15, 2.16 and 10.03 and Article IX
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any provision hereof.

Section 10.06. Counterparts; Integration; Effectiveness; Amendment and
Restatement. This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement, the other Loan Documents and any separate letter
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fees payable to the Administrative Agent embody the final, entire agreement
among the parties relating to the subject matter hereof and supersede any and
all previous commitments, agreements, representations and understandings,
whether oral or written, relating to the subject matter hereof and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no unwritten oral
agreements among the parties hereto. This Agreement amends and restates in its
entirety the Prior Credit Agreement. The execution of this Agreement and the
other Loan Documents executed in connection herewith does not extinguish the
Indebtedness outstanding in connection with the Prior Credit Agreement nor does
it constitute a novation with respect to such Indebtedness. The Borrower, the
Administrative Agent and the Lenders ratify and confirm each of the Loan
Documents entered into prior to the Effective Date (but excluding the Prior
Credit Agreement) and agree that such Loan Documents continue to be legal,
valid, binding and enforceable in accordance with their respective terms.
However, for all matters arising prior to the Effective Date (including the
accrual and payment of interest and fees, and matters relating to
indemnification and compliance with financial covenants), the terms of the Prior
Credit Agreement (as unmodified by this Agreement) shall control and are hereby
ratified and confirmed. The Borrower represents and warrants that as of the
Effective Date there are no claims or offsets against or defenses or
counterclaims to its obligations under the Prior Credit Agreement or any of the
other Loan Documents. Delivery of an executed counterpart of a signature page of
this Agreement by telecopy or other electronic communication shall be effective
as delivery of a manually executed counterpart of this Agreement.

Section 10.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 10.08. Right of Setoff. If an Event of Default exists, each Lender and
each of its Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement or
the other Loan Documents held by such Lender, irrespective of whether or not
such Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have. Each Lender agrees to notify the Borrower and the
Administrative Agent promptly after any such setoff and application but the
failure of any Lender to so notify the Borrower shall not impair such Lender’s
rights hereunder.

Section 10.09. Governing Law; Jurisdiction; Consent to Service of Process.

(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the applicable law pertaining in the State of New York, other
than those conflict of law provisions that would defer to the substantive laws
of another jurisdiction. This governing law election has been made by the
parties in reliance (at least in part) on Section 5–1401 of the General
Obligations Law of the State of New York, as amended (as and to the extent
applicable), and other applicable law.

(b) Jurisdiction. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME
COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY

 

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ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR,
TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK
OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES
IN THE COURTS OF ANY JURISDICTION.

(c) Venue. The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

(d) Service of Process. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 10.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.

Section 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 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, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

Section 10.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 10.12. Confidentiality. Each of the Administrative Agent, the Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to this Agreement,
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remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis
from a source other than the Borrower. For the purposes of this Section,
“Information” means all information received from any Loan Party relating to any
Loan Party, other than any such information that is available to the
Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis
prior to disclosure by the applicable Loan Party; provided that, in the case of
information received from a Loan Party after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 10.12 FURNISHED
TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE SECURITIES,
AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF
MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC
INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING
FEDERAL AND STATE SECURITIES LAWS.

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS AFFILIATES,
THE LOAN PARTIES] AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.
ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT
THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO
MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN
ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

Section 10.13. Maximum Interest Rate.

(a) Limitation to Maximum Rate; Recapture. No interest rate specified in any
Loan Document shall at any time exceed the Maximum Rate. If at any time the
interest rate (the “Contract Rate”) for any obligation under the Loan Documents
shall exceed the Maximum Rate, thereby causing the interest accruing on such
obligation to be limited to the Maximum Rate, then any subsequent reduction in
the Contract Rate for such obligation shall not reduce the rate of interest on
such obligation below the Maximum Rate until the aggregate amount of interest
accrued on such obligation equals the aggregate amount of interest which would
have accrued on such obligation if the Contract Rate for such obligation had at
all times been in effect. As used herein, the term “Maximum Rate” means, at any
time with respect to any Lender, the maximum rate of nonusurious interest under
applicable law that such Lender may charge Borrower. The Maximum Rate shall be
calculated in a manner that takes into account any and all fees, payments, and
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Documents that constitute interest under applicable law. Each change in any
interest rate provided for herein based upon the Maximum Rate resulting from a
change in the Maximum Rate shall take effect without notice to Borrower at the
time of such change in the Maximum Rate. For purposes of determining the Maximum
Rate under Texas law, the applicable rate ceiling shall be the indicted rate
ceiling described in, and computed in accordance with Section 303.003 of the
Texas Finance Code.

(b) Cure Provisions. No provision of any Loan Document shall require the payment
or the collection of interest in excess of the maximum amount permitted by
applicable law. If any excess of interest in such respect is hereby provided
for, or shall be adjudicated to be so provided, in any Loan Document or
otherwise in connection with this loan transaction, the provisions of this
Section shall govern and prevail and neither Borrower nor the sureties,
guarantors, successors, or assigns of Borrower shall be obligated to pay the
excess amount of such interest or any other excess sum paid for the use,
forbearance, or detention of sums loaned pursuant hereto. In the event any
Lender ever receives, collects, or applies as interest any such sum, such amount
which would be in excess of the maximum amount permitted by applicable law shall
be applied as a payment and reduction of the principal of the obligations
outstanding hereunder, and, if the principal of the obligations outstanding
hereunder has been paid in full, any remaining excess shall forthwith be paid to
the Borrower. In determining whether or not the interest paid or payable exceeds
the Maximum Rate, Borrower and each Lender shall, to the extent permitted by
applicable law, (a) characterize any non-principal payment as an expense, fee,
or premium rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the entire contemplated
term of the obligations outstanding hereunder so that interest for the entire
term does not exceed the Maximum Rate.

Section 10.14. No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by the Administrative Agent or any
Lender shall have the right to act exclusively in the interest of the
Administrative Agent and the Lenders and shall have no duty of disclosure, duty
of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to Borrower, any other Loan Party, any of their respective Equity
Interest holders or any other Person.

Section 10.15. No Fiduciary Relationship. The relationship between the Borrower
and the Loan Parties on the one hand and the Administrative Agent and each
Lender on the other is solely that of debtor and creditor, and neither the
Administrative Agent nor any Lender has any fiduciary or other special
relationship with the Borrower or any Loan Parties, and no term or condition of
any of the Loan Documents shall be construed so as to deem the relationship
between the Borrower and the other Loan Parties on the one hand and the
Administrative Agent and each Lender on the other to be other than that of
debtor and creditor.

Section 10.16. Equitable Relief. The Borrower recognizes that in the event the
Borrower or any other Loan Party fails to pay, perform, observe, or discharge
any or all of the obligations under the Loan Documents, any remedy at law may
prove to be inadequate relief to the Administrative Agent and the Lenders. The
Borrower therefore agrees that the Administrative Agent and the Lenders, if the
Administrative Agent or the Required Lenders so request, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.

Section 10.17. Construction. The Borrower, each other Loan Party (by its
execution of the Loan Documents to which it is a party), the Administrative
Agent and each Lender acknowledges that each of them has had the benefit of
legal counsel of its own choice and has been afforded an opportunity to review
the Loan Documents with its legal counsel and that the Loan Documents shall be
construed as if jointly drafted by the parties thereto.

 

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Section 10.18. Independence of Covenants. All covenants under the Loan Documents
shall be given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be permitted by
an exception to, or be otherwise within the limitations of, another covenant
shall not avoid the occurrence of a Default if such action is taken or such
condition exists.

Section 10.19. USA PATRIOT Act. Each Lender that is subject to the requirements
of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) notifies each Loan Party that pursuant to the requirements of
the Act, it is required to obtain, verify and record information that identifies
the Loan Party, which information includes the name and address of the Loan
Party and other information that will allow such Lender to identify the Loan
Party in accordance with the Act.

Section 10.20. Judgment Currency. This is a loan transaction in which the
specification of a foreign currency or Dollars is of the essence, and the
stipulated currency shall in each instance be the currency of account and
payment in all instances. A payment obligation in one currency hereunder (the
“Original Currency”) shall not be discharged by an amount paid in another
currency (the “Other Currency”), whether pursuant to any judgment expressed in
or converted into any Other Currency or in another place except to the extent
that such tender or recovery results in the effective receipt by a party hereto
of the full amount of the Original Currency payable to such party. If for the
purpose of obtaining judgment in any court it is necessary to convert a sum due
hereunder in the Original Currency into the Other Currency, the rate of exchange
that shall apply shall be the applicable Spot Rate. The obligation of the
Borrower and the Subsidiaries in respect of any such sum due from it to the
Administrative Agent, any Issuing Bank or any Lender under any Loan Document (in
this Section 10.20 called an “Entitled Person”) shall, notwithstanding the rate
of exchange actually applied in rendering such judgment, be discharged only to
the extent that on the Business Day following receipt by such Entitled Person of
any sum adjudged to be due hereunder in the Other Currency such Entitled Person
may in accordance with normal banking procedures purchase the Original Currency
with the amount of the judgment currency so adjudged to be due; and the
Borrower, as a separate obligation and notwithstanding any such judgment, agrees
to indemnify such Entitled Person against, and to pay such Entitled Person on
demand, in the Original Currency, the amount (if any) by which the sum
originally due to such Entitled Person in the Original Currency hereunder
exceeds the amount of the Other Currency so purchased.

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

 

LENNOX INTERNATIONAL INC., as the Borrower

By:

 

/s/ Rick Pelini

 

Rick Pelini, Vice President and Treasurer

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 75

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

 

JPMORGAN CHASE BANK,

NATIONAL ASSOCIATION,

individually as a Lender and as the Administrative Agent

By:

 

/s/ Gregory T. Martin

 

Gregory T. Martin, Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 76

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

 

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

By:

 

/s/ Allison W. Connally

 

Name: Allison W. Connally

 

Title:   Senior Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 77

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

 

WELLS FARGO BANK, N.A., individually as a Lender and as a Syndication Agent

By:

 

/s/ W. R. Birdwell

 

Name: W. R. Birdwell

 

Title:   Senior Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 78

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

 

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

individually as a Lender and as a Documentation Agent

By:

 

/s/ Charles Stewart

 

Name: Charles Stewart

 

Title:   Director

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 79

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

 

PNC BANK, NATIONAL ASSOCIATION,

individually as a Lender and as a Documentation Agent

By:

 

/s/ M. Colin Warman

 

Name: M. Colin Warman

 

Title:   Assistant Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 80

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

 

U.S. BANK NATIONAL ASSOCIATION, individually as a Lender and as Managing Agent

By:

 

/s/ Patrick Engel

 

Name: Patrick Engel

 

Title:   Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 81

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

 

COMERICA BANK,
as a Lender

By:

 

/s/ Gerald R. Finney, Jr.

 

Name: Gerald R. Finney, Jr.

 

Title:   Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 82

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

 

THE NORTHERN TRUST COMPANY,

as a Lender

By:

 

/s/ Brandon Rolek

 

Name: Brandon Rolek

 

Title:   Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 83

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

 

BOKF, N.A. dba Bank of Texas,

as a Lender

By:

 

/s/ Alan Morris

 

Name: Alan Morris

 

Title: Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 84

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

 

AMEGY BANK NATIONAL ASSOCIATION,

as a Lender

By:

 

/s/ Monica Libbey

 

Name: Monica Libbey

 

Title:   Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 85

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

 

FIFTH THIRD BANK, an Ohio corporation,

as a Lender

By:

 

/s/ Mitchell A. Early

 

Mitchell A. Early

 

AVP, Portfolio Manager

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 86

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

 

THE BANK OF NOVA SCOTIA,

as a Lender

 

By:

 

/s/ Justin Perdue

 

Name: Justin Perdue

 

Title: Director

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 87

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

 

COMPASS BANK, as a Lender

 

By:

 

/s/ Jason Gautz

 

Name: Jason Gautz

 

Title: Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 88

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

 

SUNTRUST BANK,

as a Lender

 

By:

 

/s/ David Simpson

 

Name: David Simpson

 

Title: Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 89

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

 

MORGAN STANLEY BANK, N.A.,

as a Lender

 

By:

 

/s/ Sherrese Clarke

 

Name: Sherrese Clarke

 

Title: Authorized Signatory

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 90

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

 

BRANCH BANKING AND TRUST COMPANY,

as a Lender

 

By:

 

/s/ Allen K. King

 

Name: Allen K. King

 

Title: Senior Vice President

 

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT, Page 91

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

LIST OF SCHEDULES AND EXHIBITS

 

SCHEDULES:

     

Schedule 1.01

  

–

  

Existing Letters of Credit

Schedule 2.01

  

–

  

Commitments

Schedule 3.12

  

–

  

Material Subsidiaries

Schedule 6.01

  

–

  

Existing Indebtedness

Schedule 6.02

  

–

  

Existing Liens

Schedule 6.04

  

–

  

Existing Investments

Schedule 6.10

  

–

  

Existing Restrictions

     

EXHIBITS:

           

Exhibit A

  

–

  

Form of Assignment and Assumption

Exhibit B

  

–

  

Form of Compliance Certificate

Exhibit C

  

–

  

Form of Guaranty Agreement (Material Subsidiaries)

Exhibit D

  

–

  

Form of Increased Commitment Supplement

Exhibit E

  

–

  

Form of Borrowing Request

Exhibit F

  

–

  

Form of Interest Election Request

LIST OF SCHEDULES AND EXHIBITS, Solo Page

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

SCHEDULE 1.01

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

EXISTING LETTERS OF CREDIT

 

LC Number

  

Bank

  

Beneficiary

   Amount  

CDCS-812901

  

JP Morgan Chase

  

ACE INA Insurance

   $ 4,300,000   

D-218869

  

JP Morgan Chase

  

Cigna Insurance Co.

   $ 2,814,883   

D-218998

  

JP Morgan Chase

  

Lumberman’s Underwriting Alliance

   $ 74,000   

NZS538172

  

Wells Fargo

  

ACE American Insurance Co.

   $ 32,244,343   

A28695T

  

Compass

  

ACE American Insurance Co.

   $ 26,070,868   

SM229872W

  

Wells Fargo

  

Wells Fargo IDB

   $ 2,641,425   

SM229873W

  

Wells Fargo

  

Wells Fargo IDB

   $ 11,834,630            

 

 

       

Total

   $ 79,980,149            

 

 

 

SCHEDULE 1.01, Solo Page

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

SCHEDULE 2.01

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

COMMITMENTS

 

Lender

   Revolving Commitment  

1. JPMorgan Chase Bank, National Association

   $ 80,000,000   

2. Bank of America, N.A.

   $ 80,000,000   

3. Wells Fargo Bank, N.A.

   $ 80,000,000   

4. The Bank of Tokyo-Mitsubishi UFJ, Ltd.

   $ 60,000,000   

5. PNC Bank, National Association

   $ 60,000,000   

6. U.S. Bank, National Association

   $ 40,000,000   

7. Comerica Bank

   $ 27,500,000   

8. The Northern Trust Company

   $ 27,500,000   

9. BOKF, N.A. dba Bank of Texas

   $ 27,500,000   

10. Amegy Bank National Association

   $ 27,500,000   

11. Fifth Third Bank

   $ 27,500,000   

12. The Bank of Nova Scotia

   $ 22,500,000   

13. Compass Bank

   $ 22,500,000   

14. SunTrust Bank

   $ 22,500,000   

15. Morgan Stanley Bank, N.A.

   $ 22,500,000   

16. Branch Banking and Trust Company

   $ 22,500,000      

 

 

 

TOTAL

   $ 650,000,000      

 

 

 

SCHEDULE 2.01, Solo Page

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

SCHEDULE 3.12

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

MATERIAL SUBSIDIARIES

 

Material Subsidiary

  

Jurisdiction

  

Ownership

Allied Air Enterprises Inc.

  

Delaware

  

Borrower (100%)

Advanced Distributor Products LLC

  

Delaware

  

Heatcraft Inc. (100%)

Heatcraft Inc.

  

Delaware

  

Borrower (100%)

Heatcraft Refrigeration Products LLC

  

Delaware

  

Heatcraft Inc. (100%)

Lennox Global Ltd.

  

Delaware

  

Borrower (100%)

Lennox Industries Inc.

  

Delaware

  

Borrower (100%)

Service Experts LLC

  

Delaware

  

Lennox Industries Inc. (100%)

Service Experts Heating & Air Conditioning LLC

  

Delaware

  

Service Experts LLC (100%)

SCHEDULE 3.12, Solo Page

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

SCHEDULE 6.01

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

EXISTING INDEBTEDNESS

Indebtedness owing to BTMU Capital Corporation arising in connection with the
Synthetic Lease in the amount of $41,202,994.

SCHEDULE 6.01, Solo Page

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

SCHEDULE 6.02

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

EXISTING LIENS

The obligations of Lennox Procurement Company Inc. (“Lessee”) under the
Synthetic Lease and under related documents are purportedly secured by a pledge
of, and a purported Lien on, Lessee’s interest in the property leased pursuant
to the Synthetic Lease

SCHEDULE 6.02, Solo Page

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

SCHEDULE 6.04

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

EXISTING INVESTMENTS

1. 25% common stock ownership interest in Alliance Compressor LLC, a joint
venture engaged in the manufacture and sale of compressors.

2. 50% common stock ownership in Frigus-Bohn S.A. de C.V., a Mexican joint
venture that produces unit coolers and condensing units.

3. 8% common stock ownership interest in Kulthorn Kirby Public Company Limited,
a Thailand company engaged in the manufacture of compressors for refrigeration
applications.

SCHEDULE 6.04, Solo Page

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

SCHEDULE 6.10

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

EXISTING RESTRICTIONS

1. Receivables Purchase Agreement dated as of November 25, 2009, by and among
Lennox Industries Inc., LPAC Corp., Victory Receivables Corporation, as a
Purchaser, The Bank of Tokyo-Mitsubishi UFJ, LTD, New York Branch, as a
Liquidity Bank, and The Bank of Toyko-Mitsubishi UFJ, LTD, New York Branch, as
Administrative Agent and the BTMU Purchaser Agent.

a. Amendment No. 1 dated November 19, 2010, to the Receivables Purchase
Agreement, dated as of November 25, 2009, with Victory Receivables Corporation,
as a Purchaser, The Bank of Tokyo-Mitsubishi UFJ, LTD., New York Branch, as a
Liquidity Bank, and The Bank of Tokyo-Mitsubishi UFJ, LTD., New York Branch as
Administrative Agent and the BTMU Purchaser Agent.

 

2.

Senior Unsecured Notes

 

3.

The Synthetic Lease and the documents executed in connection therewith

SCHEDULE 6.10, Solo Page

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

EXHIBIT A

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

FORM OF ASSIGNMENT AND ASSUMPTION

EXHIBIT A, Cover Page

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

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including any letters of credit, guarantees, and swingline
loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether
known or unknown, arising under or in connection with the Credit Agreement, any
other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

 

1.

Assignor:                                         

 

2.

Assignee:                                         

    

[and is an Affiliate/Approved Fund of [identify Lender]1]

 

3.

Borrower: Lennox International Inc.

 

4.

Administrative Agent: JPMorgan Chase Bank, National Association, as the
administrative agent under the Credit Agreement

5.       Credit Agreement: The $650,000,000 Fourth Amended and Restated
Revolving Credit Facility Agreement dated as of October 21, 2011 among Lennox
International Inc., the Lenders parties thereto, JPMorgan Chase Bank, National
Association, as Administrative Agent, and the other agents parties thereto

 

 

1 

Select as applicable.

ASSIGNMENT AND ASSUMPTION, Page 1

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

6.

Assigned Interest:

 

Facility Assigned

  

Aggregate Amount of Commitment/
Loans for

all Lenders

   Amount of
Commitment/Loans
Assigned      Percentage Assigned of
Commitment/Loans2      $      $         %       $      $         %       $     
$         %   

Effective Date:             , 20            [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more
contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower and their respective affiliates, the
other Loan Parties and their Related Parties or their respective securities)
will be made available and who may receive such information in accordance with
the Assignee’s compliance procedures and applicable laws, including Federal and
state securities laws.

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR

 

[NAME OF ASSIGNOR]

By:

     

Title:

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

By:

     

Title:

 

 

2 

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

ASSIGNMENT AND ASSUMPTION, Page 2

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

 

[Consented to and]3 Accepted:

 

[NAME OF ADMINISTRATIVE AGENT], as

Administrative Agent

By:

     

Title:

 

[Consented to:]4

 

[NAME OF RELEVANT PARTY]

By:

     

Title:

 

 

3 

To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.

4 

To be added only if the consent of the Borrower and/or other parties (e.g.
Swingline Lender, Issuing Bank) is required by the terms of the Credit
Agreement.

ASSIGNMENT AND ASSUMPTION, Page 3

 

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

ANNEX 1

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

PROVIDED TO LENNOX INTERNATIONAL INC.

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of the Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of the Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 5.01 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, (v) if it is a Foreign Lender,
attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee, and (vi) it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest; and (b) agrees that (i) it will, independently
and without reliance on the Administrative Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in any number of
counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy or other electronic communications shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by and construed in accordance with the
applicable law pertaining in the State of New York, other than those conflict of
law provisions that would defer to the substantive laws of another jurisdiction.
This governing law election has been made by the parties in reliance (at least
in part) on Section 5–1401 of the General Obligations Law of the State of New
York, as amended (as and to the extent applicable), and other applicable law.

STANDARD TERMS AND CONDITIONS TO THE ASSIGNMENT AND ASSUMPTION, Solo Page

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

EXHIBIT B

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

COMPLIANCE CERTIFICATE

EXHIBIT B, Cover Page

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

COMPLIANCE CERTIFICATE

for the

quarter ending             ,             

To:   JPMorgan Chase Bank, National Association

Loan and Agency Services Group

10 South Dearborn Street, 7th Floor

Chicago, IL 60603

Attention: Nan Wilson

Telephone: 312-385-7084

Telecopy: 888-292-9533

and each Lender

Ladies and Gentlemen:

This Compliance Certificate (the “Certificate”) is being delivered pursuant to
Section 5.01(c) of that certain Fourth Amended and Restated Revolving Credit
Facility Agreement (as amended, the “Agreement”) dated as of October 21, 2011,
among Lennox International Inc. (the “Borrower”), JPMorgan Chase Bank, National
Association, as administrative agent, and the Lenders named therein. All
capitalized terms, unless otherwise defined herein, shall have the same meanings
as in the Agreement. All the calculations set forth below shall be made pursuant
to the terms of the Agreement.

The undersigned, an authorized financial officer of the Borrower in his capacity
as such financial officer and not in his individual capacity, does hereby
certify to the Administrative Agent and the Banks that:

 

1.

DEFAULT

No Default has occurred or, if a Default has occurred, I have described on the
attached Exhibit “A” the nature thereof and the steps taken or proposed to
remedy such Default.

 

     Compliance  

2.      SECTION 5.01—Financial Statements

  

(a) Annual audited financial statements of the Borrower on a consolidated basis
within
90 days after the end of each fiscal year end (together with Compliance
Certificate).

     Yes         No         N/A   

(b) Quarterly unaudited financial statements of the Borrower on a consolidated
basis within
45 days after the end of the first three fiscal quarters of each fiscal year
(together with Compliance Certificate).

     Yes         No         N/A   

 

3.      SECTION 7.01—Leverage Ratio

           

(a) Total Indebtedness as of fiscal quarter end

   $ ________            

(i) Principal amount of all obligations for borrowed money (including Revolver
Loans)

   $ ________            

(ii) Conditional sale or title retentions

   $ ________            

(iii) Deferred purchase price

   $ ________            

 

 

COMPLIANCE CERTIFICATE, Page 1

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

 

(iv) Obligations of others secured by a Lien

   $ ________        

(v) Capital Lease Obligations

   $ ________        

(vi) Letters of credit and banker’s acceptances

   $ ________        

(vii) Total

   $ ________        

(b) Adjusted EBITDA (from Schedule 1)

   $ ________        

(c) Line 3(a) ÷ Line 3(b)

     _____ to 1.00        

(d) Maximum Leverage Ratio permitted by Credit Agreement

     3.50 to 1.00        Yes         No   

4.      SECTION 7.02—Interest Coverage Ratio

 

       

(a) EBITDA for last four fiscal quarters

   $ ________        

(b) Capital Expenditures for last four fiscal quarters

   $ ________        

(c) Interest Expense for last four fiscal quarters

   $ ________        

(d) Total interest income received during last four fiscal quarters

   $ ________        

(e) Interest Coverage Ratio (lines (4(a)—(b)) / (4(c)—(d))

     ___ to 1.00        

(f) Minimum Interest Coverage Ratio permitted by Credit Agreement

     3.00 to 1.00        Yes         No   

5.      Determination of Applicable Rate

 

       

(a) Leverage Ratio

     ___ to 1.00        

(b) If adjustment required, set forth below new margins and fees (see Schedule
2)

       

(i) ABR Spread

     _______ %      

(ii) Commitment Fee Rate

     _______ %      

(iii) Eurodollar Spread

     _______ %      

(iii) Eurodollar Daily Floating Rate Spread

     _______ %      

 

6.

ATTACHED SCHEDULES

Attached hereto as schedules are the calculations supporting the computation set
forth above in this Certificate. All information contained herein and on the
attached schedules is true and correct.

 

7.

FINANCIAL STATEMENTS

The financial statements attached hereto were prepared in accordance with GAAP,
except where expressly noted therein, and fairly present in all material
respects (subject to year end audit adjustments and absence of footnotes) the
financial conditions and the results of the operations of the Persons reflected
thereon, at the date and for the periods indicated therein.

 

8.

CONFLICT

In the event of conflict between this Certificate and the Credit Agreement, the
Credit Agreement shall control.

 

9.

REVOLVING EXPOSURE

The total Revolving Exposure of all Lenders does not exceed the total Revolving
Commitments of all Lenders.

 

 

COMPLIANCE CERTIFICATE, Page 2

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

IN WITNESS WHEREOF, the undersigned has executed this Certificate effective as
of the date first written above.

 

LENNOX INTERNATIONAL INC.

By:

     

Name:________________________________________________________

Title:_________________________________________________________

 

 

COMPLIANCE CERTIFICATE, Page 3

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

SCHEDULE 1

TO

COMPLIANCE CERTIFICATE

 

(1)

 

Consolidated Net Income.

   $ ___________      

Net income (loss) determined in accordance with GAAP

     

(2)

 

EBITDA.

       

(a)    Consolidated Net Income (from line 1)

   $ ___________        

(b)    the total of the following to the extent deducted from Consolidated Net
Income:

       

(i) income and franchise taxes,

   $ ___________        

(ii) Interest Expense,

   $ ___________        

(iii) amortization and depreciation expense,

   $ ___________        

(iv) non-cash charges resulting from the application of GAAP that requires a
charge against earnings for the impairment of assets (including goodwill);

   $ ___________        

(v) any non-cash expenses that arose in connection with the grant of stock
options or other equity based awards to officers, directors, consultants, and
employees of the Borrower and its Subsidiaries;

   $ ___________        

(vi) any non-recurring charges which relate to the discontinuance of Subsidiary
operations;

   $ ___________        

(vii) any non-recurring charges which relate to restructuring and severance
activities; provided, that the total cash amount of such charges shall not
exceed $15,000,000 during any four fiscal quarter period (not taking into
account any cash charges under (viii) below

   $ ___________        

(viii) any non-recurring charges which relate to the refinance of the lease of
the Borrower’s headquarters building located at 2140 Lake Park Blvd.,
Richardson, Texas; provided, that the total cash amount of such charges shall
not exceed $15,000,000 during the term of this Agreement;

   $ ___________        

(ix) any non-cash loss (or minus any gain) associated with the sale of assets
not in the ordinary course of business,

       

(x) extraordinary loss or other items (or minus any extraordinary gain or
income);

   $ ___________        

(xii) any non-cash loss (or minus any non-cash gain) related to financial
instrument hedges (other than foreign currency hedges)

   $ ___________        

(xiii) the cumulative non-cash effects of changes in accounting policies,

   $ ___________        

                             Total (lines (i) through (xiii))

   $ ___________        

(c) cash payments made in such period related to a non-cash expense (other than
with respect to restructuring activities) added to Consolidated Net Income in a
previous period.

   $ ___________        

(e) EBITDA: Lines 2(a) plus 2(b) minus 2(c)

      $ ___________   

(3)

 

Adjusted EBITDA.

       

(a) EBITDA (from Line 2(e)

   $ ___________        

(b) EBIDTDA from Prior Targets for periods prior to Acquisitions

   $ ___________        

(c) EBIDTDA for prior Companies and Prior Assets

   $ ___________        

(d) Total Adjusted EBITDA

      $ ___________   

 

 

SCHEDULE 1 to Compliance Certificate, Page 1

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

SCHEDULE 2

TO

COMPLIANCE CERTIFICATE

 

Leverage Ratio

 

ABR Spread

 

Eurodollar

Spread

 

Eurodollar

Daily Swingline

Spread

 

Commitment Fee Rate

Category 1

> 3.00 to 1.0

  1.00%   2.00%   2.00%   0.35%

Category 2

£ 3.00 to 1.0 but

> 2.50 to 1.0

  0.75%   1.75%   1.75%   0.30%

Category 3

£ 2.50 to 1.0 but

> 2.00 to 1.0

  0.50%   1.50%   1.50%   0.25%

Category 4

£ 2.00 to 1.0 but

> 1.50 to 1.0

  0.25%   1.25%   1.25%   0.20%

Category 5

£ 1.50 to 1.0

  0.00%   1.00%   1.00%   0.15%

 

SCHEDULE 2 to Compliance Certificate, Page 1

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

EXHIBIT C

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

GUARANTY AGREEMENT

 

 

EXHIBIT C, Cover Page

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

FOURTH AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT

WHEREAS, LENNOX INTERNATIONAL INC. (the “Borrower”) has entered into that
certain Fourth Amended and Restated Revolving Credit Facility Agreement dated
October 21, 2011 among Borrower, the lenders party thereto (the “Lenders”),
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as the administrative agent for the
Lenders (the “Administrative Agent”) (such Credit Agreement, as it may hereafter
be amended or otherwise modified from time to time, being hereinafter referred
to as the “Credit Agreement”, and capitalized terms not otherwise defined herein
shall have the same meaning as set forth in the Credit Agreement);

WHEREAS, this Guaranty Agreement amends and restates that certain Third Amended
and Restated Subsidiary Guaranty Agreement dated as of October 12, 2007 executed
by the Guarantors in favor of Bank of America, N.A., as administrative agent, in
its entirety;

WHEREAS, the execution of this Guaranty Agreement is a condition to the
Administrative Agent’s and each Lender’s obligations under the Credit Agreement;

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which
are hereby acknowledged, each of the undersigned Subsidiaries and any Subsidiary
hereafter added as a “Guarantor” hereto pursuant to a Subsidiary Joinder
Agreement in the form attached hereto as Exhibit A (individually a “Guarantor”
and collectively the “Guarantors”), hereby irrevocably and unconditionally
guarantees to the Secured Parties the full and prompt payment and performance of
the Guaranteed Indebtedness (hereinafter defined), this Guaranty Agreement being
upon the following terms:

1. Guaranteed Indebtedness. The term “Guaranteed Indebtedness”, as used herein,
means all of the Obligations, as defined in the Credit Agreement. The
“Guaranteed Indebtedness” shall include any and all post-petition interest and
expenses (including attorneys’ fees) whether or not allowed under any
bankruptcy, insolvency, or other similar law; provided that the Guaranteed
Indebtedness shall be limited, with respect to each Guarantor, to an aggregate
amount equal to the largest amount that would not render such Guarantor’s
obligations hereunder subject to avoidance under Section 544 or 548 of the
United States Bankruptcy Code or under any applicable state law relating to
fraudulent transfers or conveyances.

2. Contribution Agreement. The Guarantors together desire to allocate among
themselves (collectively, the “Contributing Guarantors”), in a fair and
equitable manner, their obligations arising under this Guaranty Agreement and
the other Loan Documents. Accordingly, in the event any payment or distribution
is made by a Guarantor under this Guaranty Agreement or under the other Loan
Documents (a “Funding Guarantor”) that exceeds its Fair Share (as defined
below), that Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in the amount of such other Contributing
Guarantor’s Fair Share Shortfall (as defined below), with the result that all
such contributions will cause each Contributing Guarantor’s Aggregate Payments
(as defined below) to equal its Fair Share. “Fair Share” means, with respect to
a Contributing Guarantor as of any date of determination, an amount equal to
(i) the ratio of (x) the Adjusted Maximum Amount (as defined below) with respect
to such Contributing Guarantor to (y) the aggregate of the Adjusted Maximum
Amounts with respect to all Contributing Guarantors, multiplied by (ii) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under the Loan Documents in respect of the obligations guarantied.
“Fair Share Shortfall” means, with respect to a Contributing Guarantor as of any
date of determination, the excess, if any, of the Fair Share of such
Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. “Adjusted Maximum Amount” means, with respect to a Contributing
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Contributing Guarantor under this Guaranty Agreement
determined in accordance

 

FOURTH AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT, Page 1

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with the provisions hereof; provided that, solely for purposes of calculating
the “Adjusted Maximum Amount” with respect to any Contributing Guarantor for
purposes of this paragraph 2, the assets or liabilities arising by virtue of any
rights to or obligations of contribution hereunder shall not be considered as
assets or liabilities of such Contributing Guarantor. “Aggregate Payments”
means, with respect to a Contributing Guarantor as of any date of determination,
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty Agreement
(including, without limitation, in respect of this paragraph 2) and the other
Loan Documents. The amounts payable as contributions hereunder shall be
determined as of the date on which the related payment or distribution is made
by the applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this paragraph 2 shall not be
construed in any way to limit the liability of any Contributing Guarantor
hereunder.

3. Absolute and Irrevocable Guaranty. This instrument shall be an absolute,
continuing, irrevocable and unconditional guaranty of payment and performance,
and not a guaranty of collection, and each Guarantor shall remain liable on its
obligations hereunder until the payment and performance in full of the
Guaranteed Indebtedness. No set-off, counterclaim, recoupment, reduction, or
diminution of any obligation, or any defense of any kind or nature which
Borrower may have against any Secured Party or any other party, or which any
Guarantor may have against Borrower, any Secured Party or any other party, shall
be available to, or shall be asserted by, any Guarantor against any Secured
Party or any subsequent holder of the Guaranteed Indebtedness or any part
thereof or against payment of the Guaranteed Indebtedness or any part thereof
other than Full Satisfaction of the Obligations. If the payment of any amount of
principal of, interest with respect to or any other amount constituting the
Guaranteed Indebtedness, or any portion thereof, is rescinded, voided or must
otherwise be refunded by the Administrative Agent or any Loan Party for any
reason, then the Guaranteed Indebtedness and all terms and provisions of this
Guaranty Agreement will be automatically reinstated and become automatically
effective and in full force and effect, all to the extent that and as though
such payment so rescinded, voided or otherwise refunded had never been made.

4. Rights Cumulative. If a Guarantor becomes liable for any indebtedness owing
by Borrower to any Secured Party by endorsement or otherwise, other than under
this Guaranty Agreement, such liability shall not be in any manner impaired or
affected hereby, and the rights of the Secured Parties hereunder shall be
cumulative of any and all other rights that any Secured Party may ever have
against such Guarantor. The exercise by any Secured Party of any right or remedy
hereunder or under any other instrument, or at law or in equity, shall not
preclude the concurrent or subsequent exercise of any other right or remedy.

5. Agreement to Pay Guaranteed Indebtedness. In the event of default by Borrower
in payment or performance of the Guaranteed Indebtedness, or any part thereof,
when such Guaranteed Indebtedness becomes due, whether by its terms, by
acceleration, or otherwise, the Guarantors shall, jointly and severally,
promptly pay the amount due thereon to Administrative Agent, without notice or
demand, in lawful currency of the United States of America, and it shall not be
necessary for Administrative Agent or any other Secured Party, in order to
enforce such payment by any Guarantor, first to institute suit or exhaust its
remedies against Borrower or others liable on such Guaranteed Indebtedness, or
to enforce any rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness. In the event such payment is made by a
Guarantor, then such Guarantor shall be subrogated to the rights then held by
Administrative Agent and any other Secured Party with respect to the Guaranteed
Indebtedness to the extent to which the Guaranteed Indebtedness was discharged
by such Guarantor. Notwithstanding the foregoing, upon payment by such Guarantor
of any sums to Administrative Agent or any other Secured Party hereunder, all
rights of such Guarantor against Borrower, any other guarantor or any collateral
arising as a result therefrom by way of right of subrogation, reimbursement,
contribution or otherwise shall in all respects be subordinate and junior in

 

FOURTH AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT, Page 2

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right of payment to the prior Full Satisfaction of the Obligations. All payments
received by the Administrative Agent hereunder shall be applied by the
Administrative Agent to payment of the Guaranteed Indebtedness in the order
provided for in Section 2.17(f) of the Credit Agreement.

6. Stay of Acceleration. If acceleration of the time for payment of any amount
payable by Borrower under the Guaranteed Indebtedness is stayed upon the
insolvency, bankruptcy, or reorganization of Borrower, all such amounts
otherwise subject to acceleration under the terms of the Guaranteed Indebtedness
shall nonetheless be payable by the Guarantors hereunder forthwith on demand by
Administrative Agent or any other Secured Party.

7. Obligations Not Impaired. Each Guarantor hereby agrees that its obligations
under the Loan Documents shall not be released, discharged, diminished,
impaired, reduced, or affected for any reason or by the occurrence of any event,
including, without limitation, one or more of the following events, whether or
not with notice to or the consent of any Guarantor: (a) the taking or accepting
of collateral as security for any or all of the Guaranteed Indebtedness or the
release, surrender, exchange, or subordination of any collateral now or
hereafter securing any or all of the Guaranteed Indebtedness; (b) any partial
release of the liability of any Guarantor hereunder, or the full or partial
release of any other guarantor from liability for any or all of the Guaranteed
Indebtedness; (c) any disability of Borrower, or the dissolution, insolvency, or
bankruptcy of Borrower, any Guarantor, or any other party at any time liable for
the payment of any or all of the Guaranteed Indebtedness; (d) any renewal,
extension, modification, waiver, amendment, or rearrangement of any or all of
the Guaranteed Indebtedness or any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (e) any adjustment, indulgence, forbearance, waiver, or compromise
that may be granted or given by Administrative Agent or any other Secured Party
to Borrower, any Guarantor, or any other party ever liable for any or all of the
Guaranteed Indebtedness; (f) any neglect, delay, omission, failure, or refusal
of Administrative Agent or any other Secured Party to take or prosecute any
action for the collection of any of the Guaranteed Indebtedness or to foreclose
or take or prosecute any action in connection with any instrument, document, or
agreement evidencing, securing, or otherwise relating to any or all of the
Guaranteed Indebtedness; (g) the unenforceability or invalidity of any or all of
the Guaranteed Indebtedness or of any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (h) any payment by Borrower or any other party to Administrative
Agent or any other Secured Party is held to constitute a preference under
applicable bankruptcy or insolvency law or if for any other reason
Administrative Agent or any other Secured Party is required to refund any
payment or pay the amount thereof to someone else; (i) the settlement or
compromise of any of the Guaranteed Indebtedness; (j) the non-perfection of any
security interest or lien securing any or all of the Guaranteed Indebtedness;
(k) any impairment of any collateral securing any or all of the Guaranteed
Indebtedness; (l) the failure of Administrative Agent or any other Secured Party
to sell any collateral securing any or all of the Guaranteed Indebtedness in a
commercially reasonable manner or as otherwise required by law; (m) any change
in the corporate existence, structure, or ownership of Borrower; or (n) any
other circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or any other Guarantor (other than the Full Satisfaction
of the Obligations).

8. Representations and Warranties. Each Guarantor represents and warrants to
Administrative Agent and the Lenders as follows:

(a) Credit Agreement Representations. All representations and warranties in the
Credit Agreement relating to it are true and correct as of the date hereof and
on each date the representations and warranties hereunder are restated pursuant
to any of the Loan Documents with the same force and effect as if such
representations and warranties had been made on and as of such date except to
the extent that such representations and warranties relate specifically to
another date.

 

FOURTH AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT, Page 3

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(b) Independent Analysis. It has, independently and without reliance upon
Administrative Agent or any Lender and based upon such documents and information
as it has deemed appropriate, made its own analysis and decision to enter into
the Loan Documents to which it is a party.

(c) Borrower Information. It has adequate means to obtain from Borrower on a
continuing basis information concerning the financial condition and assets of
Borrower and it is not relying upon Administrative Agent or any Lender to
provide (and neither the Administrative Agent nor any Lender shall have any duty
to provide) any such information to it either now or in the future.

(d) Benefit of Guaranty. The value of the consideration received and to be
received by each Guarantor as a result of Borrower’s and the Lenders’ entering
into the Credit Agreement and each Guarantor’s executing and delivering this
Guaranty Agreement is reasonably worth at least as much as the liability and
obligation of each Guarantor hereunder, and such liability and obligation and
the Credit Agreement have benefited and may reasonably be expected to benefit
each Guarantor directly or indirectly.

9. Covenants of Guarantor. Each Guarantor covenants and agrees that until the
Loan Obligations have been Fully Satisfied, it will comply with all covenants
set forth in the Credit Agreement specifically applicable to it.

10. Right of Set Off. When an Event of Default exists and subject to the terms
of Section 2.17 of the Credit Agreement, Administrative Agent and each other
Secured Party shall have the right to set-off and apply against this Guaranty
Agreement or the Guaranteed Indebtedness or both, at any time and without notice
to any Guarantor, any and all deposits (general or special, time or demand,
provisional or final) or other sums at any time credited by or owing from
Administrative Agent and each other Secured Party to any Guarantor whether or
not the Guaranteed Indebtedness is then due and irrespective of whether or not
Administrative Agent or any other Secured Party shall have made any demand under
this Guaranty Agreement. Each Secured Party agrees promptly to notify the
Borrower (with a copy to the Administrative Agent) after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application. The rights and remedies of
Administrative Agent and other Secured Parties hereunder are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) which Administrative Agent or any other Secured Party may have.

11. Intercompany Subordination.

(a) Debt Subordination. Each Guarantor hereby agrees that the Subordinated
Indebtedness (as defined below) shall be subordinate and junior in right of
payment to the Full Satisfaction of the Obligations. The Subordinated
Indebtedness shall not be payable, and no payment of principal, interest or
other amounts on account thereof, and no property or guarantee of any nature to
secure or pay the Subordinated Indebtedness shall be made or given, directly or
indirectly by or on behalf of any Debtor (hereafter defined) or received,
accepted, retained or applied by any Guarantor unless and until the Obligations
shall have been Fully Satisfied; except that prior to the occurrence and
continuance of an Event of Default, each Debtor shall have the right to make
payments and a Guarantor shall have the right to receive payments on the
Subordinated Indebtedness from time to time in the ordinary course of business.
When an Event of Default exists, no payments may be made or given on the
Subordinated

 

FOURTH AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT, Page 4

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Indebtedness, directly or indirectly, by or on behalf of any Debtor or received,
accepted, retained or applied by any Guarantor unless and until the Obligations
shall have been Fully Satisfied. If any sums shall be paid to a Guarantor by any
Debtor or any other Person on account of the Subordinated Indebtedness when such
payment is not permitted hereunder, such sums shall be held in trust by such
Guarantor for the benefit of Administrative Agent and the other Secured Parties
and shall forthwith be paid to Administrative Agent and applied by
Administrative Agent against the Guaranteed Indebtedness in accordance with this
Guaranty Agreement. For purposes of this Guaranty Agreement and with respect to
a Guarantor, the term “Subordinated Indebtedness” means all indebtedness,
liabilities, and obligations of Borrower or any other Guarantor (Borrower and
such other Guarantor herein the “Debtors”) to such Guarantor, whether such
indebtedness, liabilities, and obligations now exist or are hereafter incurred
or arise, or are direct, indirect, contingent, primary, secondary, several,
joint and several, or otherwise, and irrespective of whether such indebtedness,
liabilities, or obligations are evidenced by a note, contract, open account, or
otherwise, and irrespective of the Person or Persons in whose favor such
indebtedness, obligations, or liabilities may, at their inception, have been, or
may hereafter be created, or the manner in which they have been or may hereafter
be acquired by such Guarantor.

(b) Lien Subordination. Each Guarantor agrees that any and all Liens (including
any judgment liens), upon any Debtor’s assets securing payment of any
Subordinated Indebtedness shall be and remain inferior and subordinate to any
and all Liens upon any Debtor’s assets securing payment of the Guaranteed
Indebtedness or any part thereof, regardless of whether such Liens in favor of a
Guarantor, Administrative Agent or any other Secured Party presently exist or
are hereafter created or attached. Without the prior written consent of
Administrative Agent, no Guarantor shall (i) file suit against any Debtor or
exercise or enforce any other creditor’s right it may have against any Debtor,
or (ii) foreclose, repossess, sequester, or otherwise take steps or institute
any action or proceedings (judicial or otherwise, including without limitation
the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor’s relief or insolvency proceeding) to enforce any obligations of any
Debtor to such Guarantor or any Liens held by such Guarantor on assets of any
Debtor.

(c) Insolvency Proceeding. In the event of any receivership, bankruptcy,
reorganization, rearrangement, debtor’s relief, or other insolvency proceeding
involving any Debtor as debtor, Administrative Agent shall have the right to
prove and vote any claim under the Subordinated Indebtedness and to receive
directly from the receiver, trustee or other court custodian all dividends,
distributions, and payments made in respect of the Subordinated Indebtedness
until the Obligations have been Fully Satisfied. The Administrative Agent may
apply any such dividends, distributions, and payments against the Guaranteed
Indebtedness in accordance with the Credit Agreement.

12. Amendment and Waiver. Except for modifications made pursuant to the
execution and delivery of a Subsidiary Joinder Agreement (which needs to be
signed only by the Subsidiary party thereto) and the release of any Guarantor
from its obligations hereunder (which shall require the consent of all Lenders
except as otherwise provided in Section 9.10 of the Credit Agreement); no
amendment or waiver of any provision of this Guaranty Agreement or consent to
any departure by any Guarantor therefrom shall in any event be effective unless
the same shall be in writing and signed by the parties required by
Section 10.02(b) of the Credit Agreement. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

13. Tolling of Statutes of Limitation. To the extent permitted by law, any
acknowledgment or new promise, whether by payment of principal or interest or
otherwise and whether by Borrower or others (including any Guarantor), with
respect to any of the Guaranteed Indebtedness shall, if the statute of
limitations in favor of a Guarantor against Administrative Agent or any other
Secured Party shall have commenced to run, toll the running of such statute of
limitations and, if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.

 

FOURTH AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT, Page 5

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14. Successor and Assigns. This Guaranty Agreement is for the benefit of the
Secured Parties and their successors and assigns, and in the event of an
assignment of the Guaranteed Indebtedness, or any part thereof, the rights and
benefits hereunder, to the extent applicable to the indebtedness so assigned,
may be transferred with such indebtedness. This Guaranty Agreement is binding
not only on each Guarantor, but on each Guarantor’s successors and assigns. No
Guarantor may assign or otherwise transfer any of its rights or obligations
hereunder without prior written consent of each Lender except as otherwise
permitted by the Credit Agreement and any attempted assignment or transfer
without such consent shall be null and void.

15. Reliance and Inducement. Each Guarantor recognizes that Administrative Agent
and the Lenders are relying upon this Guaranty Agreement and the undertakings of
each Guarantor hereunder and under the other Loan Documents to which each is a
party in making extensions of credit to Borrower under the Credit Agreement and
further recognizes that the execution and delivery of this Guaranty Agreement
and the other Loan Documents to which each Guarantor is a party is a material
inducement to Administrative Agent and the Lenders in entering into the Credit
Agreement and continuing to extend credit thereunder. Each Guarantor hereby
acknowledges that there are no conditions to the full effectiveness of this
Guaranty Agreement or any other Loan Document to which it is a party.

16. Notice. Any notice or demand to any Guarantor under or in connection with
this Guaranty Agreement or any other Loan Document to which it is a party shall
be deemed effective if given to the Guarantor, care of Borrower in accordance
with the notice provisions in the Credit Agreement.

17. Expenses. The Guarantors shall, jointly and severally, pay on demand all
reasonable attorneys’ fees and all other reasonable costs and expenses incurred
by Administrative Agent and the other Secured Parties in connection with the
administration, enforcement, or collection of this Guaranty Agreement.

18. Waiver of Promptness, Diligence, etc. Except as otherwise specifically
provided in the Credit Agreement, each Guarantor hereby waives promptness,
diligence, notice of any default under the Guaranteed Indebtedness, demand of
payment, notice of acceptance of this Guaranty Agreement, presentment, notice of
protest, notice of dishonor, notice of the incurring by Borrower of additional
indebtedness, and all other notices and demands with respect to the Guaranteed
Indebtedness and this Guaranty Agreement.

19. Incorporation of Credit Agreement. The Credit Agreement, and all of the
terms thereof, are incorporated herein by reference (including, without
limitation, Section 10.03(b) and 10.19 thereof), the same as if stated verbatim
herein, and each Guarantor agrees that Administrative Agent and the Lenders may
exercise any and all rights granted to any of them under the Credit Agreement
and the other Loan Documents without affecting the validity or enforceability of
this Guaranty Agreement.

20. Entire Agreement. This Guaranty Agreement embodies the final, entire
agreement of each Guarantor, agent and the other Loan Parties with respect to
each Guarantor’s guaranty of the Guaranteed Indebtedness and supersedes any and
all prior commitments, agreements, representations, and understandings, whether
written or oral, relating to the subject matter hereof. This Guaranty Agreement
is intended by each Guarantor, Administrative Agent and the other Loan Parties
as a final and complete expression of the terms of the Guaranty Agreement, and
no course of dealing among any Guarantor, the Administrative Agent and any other
Loan Parties, no course of performance, no trade practices, and no evidence of
prior, contemporaneous or subsequent oral agreements or discussions or other
extrinsic evidence of any nature shall be used to contradict, vary, supplement
or modify any term of this Guaranty Agreement.

 

FOURTH AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT, Page 6

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21. No Waiver. No failure or delay by the Administrative Agent or any Secured
Party in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power.

22. Reserved.

23. Survival. All covenants, agreements, representations and warranties made by
the Loan Parties in the Loan Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Guaranty Agreement
or any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any Secured Party may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect until the Obligations have been Fully Satisfied.

24. Counterparts. This Guaranty Agreement may be executed in counterparts (and
by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature page of this
Guaranty Agreement by telecopy or other electronic transmission shall be
effective as delivery of a manually executed counterpart of this Guaranty
Agreement.

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

26. Governing Law. This Guaranty Agreement shall be governed by and construed in
accordance with the applicable law pertaining in the State of New York, other
than those conflict of law provisions that would defer to the substantive laws
of another jurisdiction. This governing law election has been made by the
parties in reliance (at least in part) on Section 5–1401 of the General
Obligations Law of the State of New York, as amended (as and to the extent
applicable), and other applicable law.

27. Jurisdiction. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME
COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY 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 GUARANTY AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY OTHER SECURED PARTY MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST ANY GUARANTOR OR ITS PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

 

FOURTH AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT, Page 7

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

28. Venue. Each Guarantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty Agreement or any other Loan Document
in any court referred to paragraph 27. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.

29. Service of Process. Each party to this Guaranty Agreement irrevocably
consents to service of process in the manner provided for notices in
paragraph 16. Nothing in this Guaranty Agreement or any other Loan Document will
affect the right of any party to this Guaranty Agreement to serve process in any
other manner permitted by law. Each Guarantor hereby irrevocably designates,
appoints and empowers the Borrower as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
which may be served in any such action or proceeding.

30. Waiver of Jury Trial. EACH PARTY HERETO HEREBY 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
GUARANTY AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS GUARANTY AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS PARAGRAPH.

31. Headings. All paragraph headings used herein are for convenience of
reference only, are not part of this Guaranty Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this Guaranty
Agreement.

EXECUTED as of the date first written above.

GUARANTORS:

ALLIED AIR ENTERPRISES INC.

ADVANCED DISTRIBUTOR PRODUCTS LLC

HEATCRAFT INC.

HEATCRAFT REFRIGERATION PRODUCTS LLC

LENNOX GLOBAL LTD.

LENNOX INDUSTRIES INC.

SERVICE EXPERTS LLC

SERVICE EXPERTS HEATING & AIR CONDITIONING LLC

 

By:

     

Rick Pelini, Authorized Officer for each Guarantor

 

FOURTH AMENDED AND RESTATED SUBSIDIARY GUARANTY AGREEMENT, Page 8

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

EXHIBIT “A”

TO

GUARANTY AGREEMENT

Subsidiary Joinder Agreement

 

EXHIBIT “A” to GUARANTY AGREEMENT (Subsidiaries), Cover Page

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

SUBSIDIARY JOINDER AGREEMENT

This SUBSIDIARY JOINDER AGREEMENT (the “Agreement”) dated as of             ,
201     is executed by the undersigned (the “Debtor”) for the benefit of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, in its capacity as agent for the
lenders party to the hereafter identified Credit Agreement (in such capacity
herein, the “Agent”) and for the benefit of such lenders in connection with that
certain Fourth Amended and Restated Revolving Credit Facility Agreement among
LENNOX INTERNATIONAL INC. (“Borrower”), the lenders party thereto (the
“Lenders”), JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as the administrative
agent for the Lenders (the “Agent”) (such Credit Agreement, as it may hereafter
be amended or otherwise modified from time to time, being hereinafter referred
to as the “Credit Agreement”, and capitalized terms not otherwise defined herein
shall have the same meaning as set forth in the Credit Agreement) (as modified,
the “Credit Agreement”, and capitalized terms not otherwise defined herein being
used herein as defined in the Credit Agreement).

The Debtor [is a newly formed or newly acquired Material Subsidiary and] is
required to execute this Agreement pursuant to Sections 5.11 of the Credit
Agreement.

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Debtor hereby agrees as follows:

1. The Debtor hereby assumes all the obligations of a “Guarantor” under the
Guaranty Agreement and agrees that it is a “Guarantor” and bound as a
“Guarantor” under the terms of the Guaranty Agreement as if it had been an
original signatory thereto. In accordance with the foregoing and for valuable
consideration, the receipt and adequacy of which are hereby acknowledged, Debtor
irrevocably and unconditionally guarantees to the Administrative Agent and the
other Secured Parties the full and prompt payment and performance of the
Guaranteed Indebtedness (as defined in the Guaranty Agreement) upon the terms
and conditions set forth in the Guaranty Agreement.

2. This Agreement shall be deemed to be part of, and a modification to, the
Guaranty Agreement and shall be governed by all the terms and provisions of the
Guaranty Agreement, which terms are incorporated herein by reference, are
ratified and confirmed and shall continue in full force and effect as valid and
binding agreements of Debtor enforceable against Debtor. The Debtor hereby
waives notice of Agent’s, the Issuing Bank’s or any other Secured Parties’
acceptance of this Agreement.

IN WITNESS WHEREOF, the Debtor has executed this Agreement as of the day and
year first written above.

 

Debtor:

By:

         

Name:

     

Title:

   

 

SUBSIDIARY JOINDER AGREEMENT, Solo Page

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

EXHIBIT “D

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

INCREASED COMMITMENT SUPPLEMENT

 

EXHIBIT D, Cover Page

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

INCREASED COMMITMENT SUPPLEMENT

This INCREASED COMMITMENT SUPPLEMENT (this “Supplement”) is dated as of
            ,             and entered into by and among LENNOX INTERNATIONAL
INC., a Delaware corporation (the “Borrower”), each of the banks or other
lending institutions which is a signatory hereto (the “Lenders”), JPMORGAN CHASE
BANK, NATIONAL ASSOCIATION, as agent for itself and the other lenders (in such
capacity, together with its successors in such capacity, the “Agent”), and is
made with reference to that certain Fourth Amended and Restated Revolving Credit
Facility Agreement dated as of October 21, 2011 (as amended, the “Credit
Agreement”), by and among the Company, certain lenders and the Agent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement.

RECITALS

WHEREAS, pursuant to Section 2.19 of the Credit Agreement, the Borrower and the
Lenders are entering into this Increased Commitment Supplement to provide for
the increase of the aggregate Revolving Commitments;

WHEREAS, each Lender [party hereto and already a party to the Credit Agreement]
wishes to increase its Revolving Commitment [, and each Lender, to the extent
not already a Lender party to the Credit Agreement (herein a “New Lender”),
wishes to become a Lender party to the Credit Agreement];5

WHEREAS, the Lenders are willing to agree to supplement the Credit Agreement in
the manner provided herein.

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

Section 1. Increase in Revolving Commitments. Subject to the terms and
conditions hereof, each Lender severally agrees that its Revolving Commitment
shall be increased to [or in the case of a New Lender, shall be] the amount set
forth opposite its name on the signature pages hereof.

Section 2. [New Lenders. Each New Lender (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the most recent financial
statements of the Borrower delivered under Section 5.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Supplement; (ii) agrees that it has, independently
and without reliance upon the Agent, 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
Supplement; (iii) agrees that it will, independently and without reliance upon
the Agent, any other Lender or any of their Related Parties and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; and (v) agrees that
it is a “Lender” under the Credit Agreement and will perform in accordance with
their terms all of the obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender.

 

5 

Bracketed alternatives should be included if there are New Banks.

 

INCREASED COMMITMENT SUPPLEMENT, Page 1

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

Section 3. Representations and Warranties. In order to induce the Lenders to
enter into this Supplement and to supplement the Credit Agreement in the manner
provided herein, Borrower represents and warrants to Agent and each Lender that
(a) the representations and warranties of the Borrower and the Guarantors
contained in the Loan Documents are and will be true, correct and complete in
all material respects on and as of the effective date hereof to the same extent
as though made on and as of that date and for that purpose, this Supplement
shall be deemed to be a Loan Document, and (b) no event has occurred and is
continuing or will result from the consummation of the transactions contemplated
by this Supplement that would constitute a Default.

Section 4. Effect of Supplement. The terms and provisions set forth in this
Supplement shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and except as expressly modified and superseded by
this Supplement, the terms and provisions of the Credit Agreement and the other
Loan Documents are ratified and confirmed and shall continue in full force and
effect. The Borrower, the Agent, and the Lenders party hereto agree that the
Credit Agreement as supplemented hereby and the other Loan Documents shall
continue to be legal, valid, binding and enforceable in accordance with their
respective terms. Any and all agreements, documents, or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Credit Agreement as supplemented hereby, are hereby amended so that
any reference in such documents to the Agreement shall mean a reference to the
Agreement as supplemented hereby.

Section 5. Applicable Law. This Supplement shall be governed by and construed in
accordance with the applicable law pertaining in the State of New York, other
than those conflict of law provisions that would defer to the substantive laws
of another jurisdiction. This governing law election has been made by the
parties in reliance (at least in part) on Section 5–1401 of the General
Obligations Law of the State of New York, as amended (as and to the extent
applicable), and other applicable law.

Section 7. Counterparts, Effectiveness. This Supplement may be executed in any
number of counterparts, by different parties hereto in separate counterparts and
on telecopy counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Supplement shall become
effective upon the execution of a counterpart hereof by the Borrower, the
Lenders and receipt by the Borrower and the Agent of written or telephonic
notification of such execution and authorization of delivery thereof.

Section 8. ENTIRE AGREEMENT. THIS SUPPLEMENT EMBODIES THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDES
ANY AND ALL PREVIOUS COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.

 

INCREASED COMMITMENT SUPPLEMENT, Page 2

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

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

 

   

LENNOX INTERNATIONAL INC.

    By:          

Name:

         

Title:

   

 

New Total Revolving Commitment:

$                                     

   

JPMORGAN CHASE BANK,

NATIONAL ASSOCIATION, as the Agent

    By:          

Name:

         

Title:

   

 

$                                     

   

[BANK]

    By:          

Name:

         

Title:

   

 

$                                     

   

[NEW LENDER]

    By:          

Name:

         

Title:

   

 

INCREASED COMMITMENT SUPPLEMENT, Page 3

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

CONSENT OF GUARANTORS

Each Guarantor: (i) consents and agrees to this Supplement; (ii) agrees that
each of the Loan Documents to which it is a party is in full force and effect
and continues to be its legal, valid and binding obligation enforceable in
accordance with its respective terms; and (iii) agrees that the obligations,
indebtedness and liabilities of the Borrower arising as a result of the increase
in the Revolving Commitments contemplated hereby are “Guaranteed Indebtedness”
as defined in the Guaranty Agreement.

 

[List Guarantors]

By:

         

Name:

     

Title:

   

 

INCREASED COMMITMENT SUPPLEMENT, Page 4

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

EXHIBIT “E”

TO

LENNOX INTERNATIONAL INC.

CREDIT AGREEMENT

Borrowing Request

 

EXHIBIT E, Cover Page

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

BORROWING REQUEST

        ,     ,         

JPMorgan Chase Bank, National Association

Loan and Agency Services Group

10 South Dearborn Street, 7th Floor

Chicago, IL 60603

Attention: Nan Wilson

Telephone: 312-385-7084

Telecopy: 888-292-9533

and each Lender

Ladies and Gentlemen:

The undersigned, Lennox International Inc. (the “Borrower”), refers to the
Fourth Amended and Restated Revolving Credit Facility Agreement dated as of
October 21, 2011 among the Borrower, the Lenders party thereto and JPMorgan
Chase Bank, National Association as the Administrative Agent (as otherwise
modified from time to time, the “Credit Agreement”). Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement.

The Borrower hereby gives the Administrative Agent and the Lenders notice
pursuant to Section 2.03 of the Credit Agreement that the Borrower requests a
Borrowing under the Credit Agreement, and in connection therewith sets forth
below the information relating to such Borrowing (the “Requested Borrowing”).

 

 

(i)

The date of the Requested Borrowing is         ;

 

 

(ii)

The aggregate principal amount of the Requested Borrowing is $        ;

 

 

(iii)

The Type or Types of the Borrowing requested (i.e., ABR Borrowing or Eurodollar
Borrowing) and, if applicable the Interest Periods applicable thereto are set
forth in the table below:

 

Amount

  

Type

  

Interest Period

(if applicable)

1.

      _____ Month(s)

2.

      _____ Month(s)

3.

      _____ Month(s)

4.

      _____ Month(s)

5.

      _____ Month(s)

6.

      _____ Month(s)

 

 

(vi)

The proceeds of the Requested Borrowing should be disbursed directly to the
entities in the amounts and in accordance with the transfer instructions set
forth in the table below:

 

Dollar Amount

  

Recipient

  

Instructions

$

     

$

     

$

     

$

     

 

BORROWING REQUEST, Page 1

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

By its execution below, the Borrower represents and warrants to the
Administrative Agent and the Lenders:

(i) At the time of and immediately after giving effect to the Requested
Borrowing, no Default exists;

(ii) The representations and warranties of each Loan Party set forth in the Loan
Documents shall be true and correct on and as of the date of such Requested
Borrowing except to the extent such representations and warranties specifically
relate to any earlier date in which case such representations and warranties
shall have been true and correct in all material respects as of such earlier
date; and

(iii) After giving effect to the credit extended pursuant to this request, the
total Revolving Exposure of all Lenders shall not exceed the total Revolving
Commitments of all Lenders.

The instructions set forth herein are irrevocable, except as otherwise provided
by the Credit Agreement. A telecopy of these instructions shall be deemed valid
and may be accepted and relied upon by the Administrative Agent and the Lenders
as an original.

 

LENNOX INTERNATIONAL INC.

By:

         

Name:

     

Title:

   

 

BORROWING REQUEST, Page 2

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

EXHIBIT “F”

TO

LENNOX INTERNATIONAL INC.

FOURTH AMENDED AND RESTATED REVOLVING CREDIT FACILITY AGREEMENT

Interest Election Request

 

EXHIBIT F, Cover Page

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

INTEREST ELECTION REQUEST

                 , 201    

JPMorgan Chase Bank, National Association

Loan and Agency Services Group

10 South Dearborn Street, 7th Floor

Chicago, IL 60603

Attention: Nan Wilson

Telephone: 312-385-7084

Telecopy: 888-292-9533

and each Lender

Ladies and Gentlemen:

The undersigned, Lennox International Inc. (the “Borrower”), refers to the
Fourth Amended and Restated Revolving Credit Facility Agreement dated as of
October 21, 2011 among the Borrower, the Lenders party thereto and JPMorgan
Chase Bank, National Association, as the Administrative Agent (as amended or
otherwise modified from time to time, the “Credit Agreement”). Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement.

The Borrower hereby gives the Administrative Agent and the Lenders notice
pursuant to Section 2.07 of the Credit Agreement that the Borrower requests a
conversion or continuation (a “Change”) of the Borrowing or Borrowings specified
on Schedule 1.

By its execution below, the Borrower represents and warrants to the
Administrative Agent and the Lenders:

(i) At the time of and immediately after giving effect to the requested Change,
no Default exists; and

(ii) The representations and warranties of each Loan Party set forth in the Loan
Documents shall be true and correct on and as of the date of the requested
Change except to the extent such representations and warranties specifically
relate to any earlier date in which case such representations and warranties
shall have been true and correct in all material respects as of such earlier
date.

The instructions set forth herein are irrevocable, except as otherwise provided
by the Credit Agreement. A telecopy of these instructions shall be deemed valid
and may be accepted and relied upon by the Administrative Agent and the Lenders
as an original.

 

LENNOX INTERNATIONAL INC.

By:

         

Name:

     

Title:

   

 

INTEREST ELECTION REQUEST, Solo Page

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

SCHEDULE 1

TO

INTEREST ELECTION REQUEST

 

Current Class

Revolver)

 

Current Type
(ABR or
Eurodollar)

 

Current

Principal Amount

 

Current

Interest Period

Expiration Date

 

Continue as

(Type)

 

Convert

to (Type)

 

New

Interest Period

Length

 

Effective

Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SCHEDULE 1 TO INTEREST ELECTION REQUEST, Solo Page