Exhibit 10.1

 

U.S. $1,075,000,000

 

CREDIT AGREEMENT

 

Dated as of August 24, 2004

 

Among

 

THE LUBRIZOL CORPORATION

as Borrower

 

and

 

THE INITIAL LENDERS NAMED HEREIN

as Initial Lenders

 

KEYBANK NATIONAL ASSOCIATION

and

ABN AMRO BANK N.V.

as Co-Syndication Agents

 

WACHOVIA BANK, NATIONAL ASSOCIATION

as Documentation Agent

 

and

 

CITICORP NORTH AMERICA, INC.

as Agent

 

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CITIGROUP GLOBAL MARKETS INC.

and

KEYBANC CAPITAL MARKETS

as Co-Lead Arrangers and Co-Bookrunners

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TABLE OF CONTENTS

 

ARTICLE I

    

SECTION 1.01. Certain Defined Terms

   1

SECTION 1.02. Computation of Time Periods

   14

SECTION 1.03. Accounting Terms

   14

ARTICLE II

    

SECTION 2.01. The Advances

   14

SECTION 2.02. Making the Advances

   15

SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit

   16

SECTION 2.04. Fees

   17

SECTION 2.05. Termination or Reduction of the Commitments

   17

SECTION 2.06. Repayment of Advances

   18

SECTION 2.07. Interest on Advances

   18

SECTION 2.08. Interest Rate Determination

   19

SECTION 2.09. Optional Conversion of Advances

   20

SECTION 2.10. Prepayments of Advances

   20

SECTION 2.11. Increased Costs

   21

SECTION 2.12. Illegality

   21

SECTION 2.13. Payments and Computations

   21

SECTION 2.14. Taxes

   22

SECTION 2.15. Sharing of Payments, Etc.

   24

SECTION 2.16. Evidence of Debt

   24

SECTION 2.17. Use of Proceeds

   24

ARTICLE III

    

SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01

   25

SECTION 3.02. Conditions Precedent to the Initial Borrowing of Each Designated
Subsidiary

   26

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SECTION 3.03. Conditions Precedent to Each Borrowing.

   27

SECTION 3.04. Determinations Under Section 3.01

   27

ARTICLE IV

    

SECTION 4.01. Representations and Warranties of the Company

   28

ARTICLE V

    

SECTION 5.01. Affirmative Covenants

   29

SECTION 5.02. Negative Covenants

   31

SECTION 5.03. Financial Covenants

   35

ARTICLE VI

    

SECTION 6.01. Events of Default

   36

SECTION 6.02. Actions in Respect of the Letters of Credit upon Default

   38

ARTICLE VII

    

SECTION 7.01. Guaranty

   38

SECTION 7.02. Guaranty Absolute

   38

SECTION 7.03. Waivers and Acknowledgments

   39

SECTION 7.04. Subrogation

   40

SECTION 7.05. Subordination

   40

SECTION 7.06. Continuing Guaranty; Assignments

   41

ARTICLE VIII

    

SECTION 8.01. Authorization and Action

   41

SECTION 8.02. Agent’s Reliance, Etc.

   41

SECTION 8.03. CNAI and Affiliates

   42

SECTION 8.04. Lender Credit Decision

   42

SECTION 8.05. Indemnification

   42

SECTION 8.06. Successor Agent

   43

SECTION 8.07. Other Agents.

   43

 

ii

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ARTICLE IX

    

SECTION 9.01. Amendments, Etc.

   43

SECTION 9.02. Notices, Etc.

   44

SECTION 9.03. No Waiver; Remedies

   45

SECTION 9.04. Costs and Expenses

   45

SECTION 9.05. Right of Set-off

   46

SECTION 9.06. Binding Effect

   46

SECTION 9.07. Assignments and Participations

   46

SECTION 9.08. Confidentiality

   49

SECTION 9.09. Governing Law

   49

SECTION 9.10. Execution in Counterparts

   49

SECTION 9.11. Jurisdiction, Etc.

   49

SECTION 9.12. Designated Subsidiaries

   49

SECTION 9.13. No Liability of the Issuing Banks

   50

SECTION 9.14. Patriot Act

   50

SECTION 9.15. Waiver of Jury Trial

   51

 

iii

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Schedules

 

Schedule I - List of Applicable Lending Offices

 

Schedule 1.01 – Excluded Domestic Subsidiaries

 

Schedule 3.01(b) - Disclosed Litigation

 

Schedule 5.02(a) - Existing Liens

 

Schedule 5.02(c) - Existing Debt

 

Exhibits

 

Exhibit A-1 - Form of Revolving Credit Note

 

Exhibit A-2 - Form of Term Note

 

Exhibit B - Form of Notice of Borrowing

 

Exhibit C - Form of Assignment and Acceptance

 

Exhibit D - Form of Opinion of Counsel for the Company

 

Exhibit E - Form of Designation Letter

 

Exhibit F - Form of Subsidiary Guaranty

 

iv

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FIVE-YEAR CREDIT AGREEMENT

 

Dated as of August 24, 2004

 

THE LUBRIZOL CORPORATION, an Ohio corporation (the “Company”), the banks,
financial institutions and other institutional lenders (the “Initial Lenders”)
and initial issuing banks (the “Initial Issuing Banks”) listed on the signature
pages hereof, CITIGROUP GLOBAL MARKETS INC. and KEYBANC CAPITAL MARKETS, as
co-lead arrangers and co-bookrunners, KEYBANK NATIONAL ASSOCIATION and ABN AMRO
BANK N.V., as co-syndication agents, and WACHOVIA BANK, NATIONAL ASSOCIATION, as
documentation agent, and CITICORP NORTH AMERICA, INC. (“CNAI”), as
administrative agent (the “Agent”) for the Lenders, agree as follows:

 

ARTICLE I

 

DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

 

“Acquisition” means the Company’s acquisition of the Target on June 3, 2004.

 

“Advance” means a Revolving Credit Advance or a Term Advance.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term “control” (including the terms “controlling”, “controlled
by” and “under common control with”) of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.

 

“Agent’s Account” means the account of the Agent maintained by the Agent at
Citibank at its office at 399 Park Avenue, New York, New York 10043, Account No.
36852248, Attention: Bank Loan Syndications.

 

“Applicable Lending Office” means, with respect to each Lender, such Lender’s
Domestic Lending Office in the case of a Base Rate Advance and such Lender’s
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

 

“Applicable Facility Fee Rate” means, with respect to the Revolving Credit
Facility as of any date, a percentage per annum determined by reference to the
Public Debt Rating in effect on such date as set forth below:

 

Public Debt Rating

S&P/Moody’s

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

 

Applicable

Facility Fee Rate

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

Level 1

BBB or Baa2 or above

  0.175%

Level 2

BBB- and Baa3

  0.200%

Level 3

BBB- or Baa3

  0.250%

Level 4

BB+ or Ba1

  0.300%

Level 5

BB or Ba2

  0.400%

Level 6

Lower than Level 5

  0.500%

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“Applicable Margin” means (a) with respect to the Revolving Credit Facility as
of any date, a percentage per annum determined by reference to the Public Debt
Rating in effect on such date as set forth below:

 

Public Debt Rating

S&P/Moody’s

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

 

Applicable Margin for

Eurodollar Rate Advances

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

 

Applicable Margin for

Base Rate Advances

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

Level 1

BBB or Baa2 or above

  0.700%   0.000%

Level 2

BBB- and Baa3

  0.800%   0.000%

Level 3

BBB- or Baa3

  0.8750%   0.000%

Level 4

BB+ or Ba1

  1.200%   0.200%

Level 5

BB or Ba2

  1.350%   0.350%

Level 6

Lower than Level 5

  2.250%   1.250%

 

and (b) with respect to the Term Facility as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as set
forth below:

 

Public Debt Rating

S&P/Moody’s

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

 

Applicable Margin for

Eurodollar Rate Advances

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

 

Applicable Margin for

Base Rate Advances

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

Level 1

BBB or Baa2 or above

  1.000%   0.000%

Level 2

BBB- and Baa3

  1.125%   0.125%

Level 3

BBB- or Baa3

  1.250%   0.250%

Level 4

BB+ or Ba1

  1.750%   0.750%

Level 5

BB or Ba2

  2.000%   1.000%

Level 6

Lower than Level 5

  3.000%   2.000%

 

“Applicable Utilization Fee” means, as of any date that the aggregate Revolving
Credit Advances outstanding plus the aggregate Available Amount of the Letters
of Credit outstanding exceed 33% of the aggregate Revolving Credit Commitments,
a percentage per annum determined by reference to the Public Debt Rating in
effect on such date as set forth below:

 

Public Debt Rating

S&P/Moody’s

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

 

Applicable

Utilization Fee

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

Level 1

BBB or Baa2 or above

  0.125%

Level 2

BBB- and Baa3

  0.125%

Level 3

BBB- or Baa3

  0.125%

Level 4

BB+ or Ba1

  0.250%

Level 5

BB or Ba2

  0.250%

Level 6

Lower than Level 5

  0.250%

 

2

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“Appropriate Lender” means, at any time, with respect to either of the Term
Facility or Revolving Credit Facility, a Lender that has a Commitment with
respect to such Facility at such time.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an Eligible Assignee, and accepted by the Agent, in substantially the
form of Exhibit C hereto.

 

“Available Amount” of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).

 

“Base Rate” means a fluctuating interest rate per annum in effect from time to
time, which rate per annum shall at all times be equal to the highest of:

 

(a) the rate of interest announced publicly by Citibank in New York, New York,
from time to time, as Citibank’s base rate;

 

(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no nearest 1/4 of
1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the rate
obtained by dividing (A) the latest three-week moving average of secondary
market morning offering rates in the United States for three-month certificates
of deposit of major United States money market banks, such three-week moving
average (adjusted to the basis of a year of 360 days) being determined weekly on
each Monday (or, if such day is not a Business Day, on the next succeeding
Business Day) for the three-week period ending on the previous Friday by
Citibank on the basis of such rates reported by certificate of deposit dealers
to and published by the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of deposit dealers of
recognized standing selected by Citibank in the sound exercise of its
commercially reasonable determination, by (B) a percentage equal to 100% minus
the average of the daily percentages specified during such three-week period by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including (among other liabilities)
three-month U.S. dollar non-personal time deposits in the United States, plus
(iii) the average during such three-week period of the annual assessment rates
estimated by Citibank for determining the then current annual assessment payable
by Citibank to the Federal Deposit Insurance Corporation (or any successor) for
insuring U.S. dollar deposits of Citibank in the United States; or

 

3

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(c) 1/2 of one percent per annum above the Federal Funds Rate.

 

“Base Rate Advance” means an Advance that bears interest as provided in Section
2.07(a)(i).

 

“Borrowers” means, collectively, the Company and each Designated Subsidiary that
shall become a Borrower hereunder pursuant to Section 9.12.

 

“Borrowing” means a Revolving Credit Borrowing or a Term Borrowing.

 

“Borrowing Minimum” means $10,000,000.

 

“Borrowing Multiple” means $1,000,000.

 

“Business Day” means a day of the year on which banks are not required or
authorized by law to close in New York City and, if the applicable Business Day
relates to any Eurodollar Rate Advances, on which dealings are carried on in the
London interbank market.

 

“Citibank” means Citibank, N.A.

 

“Commitment” means a Revolving Credit Commitment, a Letter of Credit Commitment
or a Term Commitment.

 

“Confidential Information” means information that the Company furnishes to the
Agent or any Lender in a writing designated as confidential, but does not
include any such information that is generally available to the public or that
is available to the Agent or such Lender on a non-confidential basis from a
source other than the Company that is, to the knowledge of the Agent or such
Lender, not acting in breach of any confidentiality agreement.

 

“Consolidated” refers to the consolidation of accounts in accordance with GAAP.

 

“Consolidated EBITDA” means, for any period, (a) Consolidated net income, plus
(b) to the extent deducted in determining such Consolidated net income, the sum
of, on a Consolidated basis and without duplication: (i) interest expense, (ii)
income tax expense, (iii) depreciation expense, (iv) amortization expense, (v)
depletion expense, (vi) extraordinary, unusual or non-recurring non-cash losses,
including goodwill expense and non-cash losses from the sale, exchange, transfer
or other disposition of property of the Company or its Subsidiaries and the
related tax effects in accordance with GAAP, (vii) extraordinary, unusual or
non-recurring cash losses, expenses or charges incurred or paid in calendar
years 2003 or 2004, and all fees and expenses incurred in connection with any
acquisition consummated in calendar years 2003 or 2004 (including the
Acquisition), minus (c) to the extent included in determining such Consolidated
net income, the sum of, on a Consolidated basis and without duplication: (i) the
income of any Person (other than a wholly owned Subsidiary of the Company) in
which any Person other than the Company or any of its Subsidiaries has a joint
interest or a partnership interest or other ownership interest, except to the
extent of the amount of dividends or other distributions actually paid to the
Company or any of its Subsidiaries by such Person during such period, (ii) gains
from the sale, exchange, transfer or other disposition of property or assets of
the Company and its Subsidiaries (other than inventory sold in the ordinary
course of business), and related tax effects in accordance with GAAP, (iii) any
other extraordinary, unusual or non-recurring gains or other income not from the
continuing operations of the Company and its Subsidiaries, and related tax
effects in accordance with GAAP and (iv) the income of any Subsidiary of the
Company to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary. For the purpose of calculating Consolidated EBITDA for any period,
if during such period the Company or any Subsidiary shall have made an
acquisition of any Person, Consolidated EBITDA for such period shall be
calculated after giving pro forma effect thereto as if such acquisition occurred
on the first day of such period.

 

4

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“Consolidated Tangible Net Assets” means, as at any date, the aggregate amount
of Consolidated assets (less depreciation, amortization and other applicable
reserves and other items deductible therefrom under GAAP) after deducting
therefrom (a) all current liabilities (excluding any thereof which are by their
terms extendible or renewable at the option of the obligor thereon to a time
more than 12 months after the time as of which the amount thereof is being
computed), (b) all goodwill, tradenames, trademarks, patents and other
intangibles, in each case net of applicable amortization and (c) appropriate
adjustments on account of minority interests of other Persons holding stock of
the Company’s Subsidiaries, all as would be shown on a Consolidated balance
sheet of the Company and its Subsidiaries and determined in accordance with
GAAP.

 

“Convert”, “Conversion” and “Converted” each refers to a conversion of Advances
of one Type into Advances of the other Type pursuant to Section 2.08 or 2.09.

 

“Debt” of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money, (b) all obligations of such Person for the deferred
purchase price of property or services (other than trade payables not overdue by
more than 120 days incurred in the ordinary course of such Person’s business;
provided that trade payables which are overdue by more than 120 days shall not
be included so long as payment of such is being contested in good faith and by
proper proceedings), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all obligations of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) all
obligations of such Person as lessee under leases that have been or should be,
in accordance with GAAP, recorded as capital leases, (f) all obligations,
contingent or otherwise, of such Person in respect of acceptances, letters of
credit or similar extensions of credit, (g) all Invested Amounts, (h) all Debt
of others referred to in clauses (a) through (g) above or clause (i) below and
other payment obligations guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
(“Guaranteed Debt”) through an agreement (1) to pay or purchase such Guaranteed
Debt or to advance or supply funds for the payment or purchase of such
Guaranteed Debt, (2) to purchase, sell or lease (as lessee or lessor) property,
or to purchase or sell services, primarily for the purpose of enabling the
debtor to make payment of such Guaranteed Debt or to assure the holder of such
Guaranteed Debt against loss, (3) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (4) otherwise to assure a creditor against loss, and (i) all Debt referred to
in clauses (a) through (h) above secured by (or for which the holder of such
Debt has an existing right, contingent or otherwise, to be secured by) any Lien
on property (including, without limitation, accounts and contract rights) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Debt; provided, that Debt shall not include transactions in the
ordinary course of business by the Company or its directly or indirectly held
Subsidiaries with customers and vendors in the form of (x) commitments to lend
or loans to customers that are repayable either over an agreed period of time or
at the time of purchases by the customers of products of the Company or its
Subsidiaries and (y) advances made to vendors that are treated either repayable
over a period of time or as advance payments for products to be purchased by the
Company or its Subsidiaries from the vendor.

 

“Default” means any Event of Default or any event that would constitute an Event
of Default but for the requirement that notice be given or time elapse or both.

 

“Designated Subsidiary” means any Subsidiary organized within the United States,
directly or indirectly wholly owned by the Company and designated after the date
of this Agreement for borrowing privileges hereunder pursuant to Section 9.12.

 

“Designation Letter” means a letter entered into by a Designated Subsidiary, the
Company and the Agent, in substantially the form of Exhibit E hereto, pursuant
to which such Designated Subsidiary shall become a Borrower hereunder in
accordance with Section 9.12.

 

5

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“Disclosed Litigation” has the meaning specified in Section 3.01(b).

 

“Domestic Lending Office” means, with respect to any Lender, the office of such
Lender specified as its “Domestic Lending Office” opposite its name on Schedule
I hereto or in the Assignment and Acceptance pursuant to which it became a
Lender, or such other office of such Lender as such Lender may from time to time
specify to the Borrowers and the Agent.

 

“Domestic Subsidiary” means each Subsidiary of the Company organized in the
United States or a political subdivision thereof.

 

“Effective Date” has the meaning specified in Section 3.01.

 

“Eligible Assignee” means (i) a Lender; (ii) an Affiliate of a Lender; and (iii)
any other Person (unless such Person is taking delivery of an assignment in
connection with physical settlement of a credit derivative transaction) approved
by the Agent and, unless an Event of Default has occurred and is continuing at
the time any assignment is effected in accordance with Section 9.07, the
Company, such approval not to be unreasonably withheld or delayed; provided,
however, that neither the Company nor an Affiliate of the Company shall qualify
as an Eligible Assignee.

 

“Environmental Action” means any action, suit, demand, demand letter, claim,
notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, Environmental Permit or Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages, and (b) by any governmental or regulatory authority or
any third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.

 

“Environmental Law” means any federal, state, local or foreign statute, law,
ordinance, rule, regulation, code, order, judgment, decree or judicial or agency
interpretation, policy or guidance relating to pollution or protection of the
environment, health, safety or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.

 

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.

 

“ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a
member of the Company’s controlled group, or under common control with the
Company, within the meaning of Section 414 of the Internal Revenue Code.

 

“ERISA Event” means (a) (i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day
notice requirement with respect to such event has been waived by the PBGC, or
(ii) the requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a contributing
sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA
is reasonably expected to occur with respect to such Plan within the following
30 days; (b) the application for a minimum funding waiver with respect to a
Plan; (c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e) of
ERISA); (d) the cessation of operations at a facility of the Company or any
ERISA Affiliate in the circumstances described in Section 4062(e) of ERISA; (e)
the withdrawal by the Company

 

6

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or any ERISA Affiliate from a Multiple Employer Plan during a plan year for
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(f) the conditions for the imposition of a lien under Section 302(f) of ERISA
shall have been met with respect to any Plan; (g) the adoption of an amendment
to a Plan requiring the provision of security to such Plan pursuant to Section
307 of ERISA; or (h) the institution by the PBGC of proceedings to terminate a
Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, a Plan.

 

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.

 

“Eurodollar Lending Office” means, with respect to any Lender, the office of
such Lender specified as its “Eurodollar Lending Office” opposite its name on
Schedule I hereto or in the Assignment and Acceptance pursuant to which it
became a Lender (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to the Borrowers and the Agent.

 

“Eurodollar Rate” means for any Interest Period for each Eurodollar Rate Advance
comprising part of the same Borrowing, an interest rate per annum equal to the
rate per annum obtained by dividing (a) the rate per annum (rounded upward to
the nearest whole multiple of 1/16 of 1% per annum) appearing on Telerate
Markets Page 3750 (or any successor page) as the London interbank offered rate
for deposits in U.S. dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period or, if for any reason such rate is not
available, the average (rounded upward to the nearest whole multiple of 1/16 of
1% per annum, if such average is not such a multiple) of the rate per annum at
which deposits in U.S. dollars is offered by the principal office of each of the
Reference Banks in London, England to prime banks in the London interbank market
at 11:00 A.M. (London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such Reference Bank’s
Eurodollar Rate Advance comprising part of such Borrowing to be outstanding
during such Interest Period and for a period equal to such Interest Period by
(b) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for
such Interest Period. If the Telerate Markets Page 3750 (or any successor page),
is unavailable, the Eurodollar Rate for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing shall be determined by the
Agent on the basis of applicable rates furnished to and received by the Agent
from the Reference Banks two Business Days before the first day of such Interest
Period, subject, however, to the provisions of Section 2.08.

 

“Eurodollar Rate Advance” means an Advance that bears interest as provided in
Section 2.07(a)(ii).

 

“Eurodollar Rate Reserve Percentage” for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing means the reserve percentage
applicable two Business Days before the first day of such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities
that includes deposits by reference to which the interest rate on Eurodollar
Rate Advances is determined) having a term equal to such Interest Period.

 

“Events of Default” has the meaning specified in Section 6.01.

 

“Facility” means the Revolving Credit Facility, the Letter of Credit Facility or
the Term Facility.

 

7

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

 

“Foreign Assets” means those assets of the Company or any of its Subsidiaries
that (a) consist of capital stock or other equity interests of Subsidiaries that
are not Domestic Subsidiaries, (b) are assets owned by Subsidiaries that are not
Domestic Subsidiaries or (c) are located outside of the United States.

 

“GAAP” has the meaning specified in Section 1.03.

 

“Guaranteed Obligations” has the meaning specified in Section 7.01.

 

“Guaranty” means the guaranty of the Company set forth in Article VII.

 

“Hazardous Materials” means (a) petroleum and petroleum products, byproducts or
breakdown products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas and (b) any other chemicals, materials
or substances designated, classified or regulated as hazardous or toxic or as a
pollutant or contaminant, under any Environmental Law.

 

“Information Memorandum” means the information memorandum dated July 7, 2004
used by the Agent in connection with the syndication of the Commitments.

 

“Interest Period” means, for each Eurodollar Rate Advance comprising part of the
same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance and ending on the last day of the period selected by the
applicable Borrower pursuant to the provisions below and, thereafter, with
respect to Eurodollar Rate Advances, each subsequent period commencing on the
last day of the immediately preceding Interest Period and ending on the last day
of the period selected by such Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six months,
and subject to clause (c) of this definition, nine or twelve months, as such
Borrower may, upon notice received by the Agent not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the first day of such
Interest Period, select; provided, however, that:

 

(a) such Borrower may not select any Interest Period that ends after the
Termination Date;

 

(b) Interest Periods commencing on the same date for Eurodollar Rate Advances
comprising part of the same Borrowing shall be of the same duration;

 

(c) in the case of any such Borrowing, such Borrower shall not be entitled to
select an Interest Period having a duration of nine or twelve months unless, by
2:00 P.M. (New York City time) on the third Business Day prior to the first day
of such Interest Period, each Appropriate Lender notifies the Agent that such
Lender will be providing funding for such Borrowing with such Interest Period
(the failure of any such Lender to so respond by such time being deemed for all
purposes of this Agreement as an objection by such Lender to the requested
duration of such Interest Period); provided that, if any or all of the
Appropriate Lenders object to the requested duration of such Interest Period,
the duration of the Interest Period for such Borrowing shall be one, two, three
or six months, as specified by the Borrower requesting such Borrowing in the
applicable Notice of Borrowing as the desired alternative to an Interest Period
of nine or twelve months;

 

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(d) whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided, however, that,
if such extension would cause the last day of such Interest Period to occur in
the next following calendar month, the last day of such Interest Period shall
occur on the next preceding Business Day; and

 

(e) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar month.

 

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.”

 

“Invested Amounts” means the amounts invested by investors that are not
Affiliates of the Company in connection with a Permitted Receivables Financing
and paid to the Company or any of its Subsidiaries, as reduced by the aggregate
amounts received by such investors from the payment of receivables and applied
to reduce such invested amounts.

 

“Investment” in any Person means any loan or advance to such Person, any
purchase or other acquisition of any capital stock, warrants, rights, options,
obligations or other securities or all or substantially all of the assets of
such Person, any capital contribution to such Person or any other investment in
such Person, including, without limitation, any arrangement pursuant to which
the investor incurs Debt of the types referred to in clauses (g) and (h) of the
definition of “Debt” in respect of such Person.

 

“Issuing Bank” means an Initial Issuing Bank or any Eligible Assignee to which a
portion of the Letter of Credit Commitment hereunder has been assigned pursuant
to Section 9.07 so long as such Eligible Assignee expressly agrees to perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as an Issuing Bank and notifies the
Agent of its Applicable Lending Office (which information shall be recorded by
the Agent in the Register), for so long as the Initial Issuing Bank or Eligible
Assignee, as the case may be, shall have a Letter of Credit Commitment.

 

“L/C Cash Collateral Account” means an interest-bearing cash collateral account
to be established and maintained by the Agent, over which the Agent shall have
sole dominion and control, upon terms as may be satisfactory to the Agent.

 

“L/C Related Documents” has the meaning specified in Section 2.06(b)(i).

 

“Lenders” means the Initial Lenders, each Issuing Bank and each Person that
shall become a party hereto pursuant to Section 9.07.

 

“Letter of Credit Agreement” shall have the meaning specified in Section
2.03(a).

 

“Letter of Credit Commitment” means as to any Issuing Bank (a) the amount set
forth opposite such Issuing Bank’s name on Schedule I hereto under the caption
“Letter of Credit Commitment” or (b) if such Issuing Bank has entered into one
or more Assignment and Acceptances, the amount set forth for such Issuing Bank
in the Registrar maintained by the Agent pursuant to Section 9.07(d) as such
Issuing Bank’s “Letter of Credit Commitment”, as such amount may be reduced at
or prior to such time pursuant to Section 2.05.

 

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“Letter of Credit Facility” means, at any time, an amount equal to the lesser of
(a) the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at
such time and (b) $100,000,000, as such amount may be reduced at or prior to
such time pursuant to Section 2.05.

 

“Letters of Credit” has the meaning specified in Section 2.01(b).

 

“Lien” means any lien, security interest or other charge or encumbrance of any
kind, including, without limitation, the lien or retained security title of a
conditional vendor and any security interest or mortgage granted in real
property.

 

“Loan Documents” means this Agreement, the Notes, the other L/C Related
Documents and the Subsidiary Guaranty.

 

“Loan Parties” means the Company, each other Borrower and the Subsidiary
Guarantors.

 

“Marketable Securities” means any of the following, to the extent owned by the
Company or any of its Subsidiaries free and clear of all Liens and having a
maturity of not greater than 360 days from the date of acquisition thereof: (a)
readily marketable direct obligations of the Government of the United States or
any agency or instrumentality thereof or obligations unconditionally guaranteed
by the full faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender or a member of the Federal Reserve System, issues (or the parent of which
issues) commercial paper rated as described in clause (c), is organized under
the laws of the United States or any State thereof and has combined capital and
surplus of at least $1 billion, (c) commercial paper in an aggregate amount of
no more than $10,000,000 per issuer outstanding at any time, issued by any
corporation organized under the laws of any State of the United States and rated
at least “Prime-1” (or the then equivalent grade) by Moody’s or “A-1” (or the
then equivalent grade) by S&P, (d) fully collateralized repurchase agreements
having a term of not more than 30 days and covering securities described in
subsection (a) above entered into with any Lender or bank meeting the
qualifications specified in (b) above or (e) investments in money market funds
substantially all of the assets of which are comprised of securities described
in subsection (a) through (d) above.

 

“Material Adverse Change” means any material adverse change in the business,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole (including the Target and its Subsidiaries
after giving effect to the Acquisition).

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole, (b) the rights and remedies of the Agent or any
Lender under this Agreement or any Note or (c) the ability of any Borrower to
perform its obligations under this Agreement or any Note.

 

“Material Domestic Subsidiary” means each Domestic Subsidiary of the Company
(other than Receivables Subsidiaries) that has either (a) Consolidated assets
with a value of not less than 2% of the total value of the assets of the Company
and its Subsidiaries, taken as a whole, or (b) Consolidated revenues of not less
than 2% of the total revenues of the Company and its Subsidiaries, taken as a
whole.

 

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

 

“Multiemployer Plan” means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.

 

“Multiple Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Company or any
ERISA Affiliate and at least one Person other than the Company and the ERISA
Affiliates or (b) was so maintained and in respect of which the Company or any
ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.

 

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“Net Cash Proceeds” means, with respect to any sale, lease, transfer or other
disposition of any asset or the incurrence or issuance of any Debt or the sale
or issuance of any equity interests (including, without limitation, any capital
contribution) by any Person, the aggregate amount of cash received from time to
time (whether as initial consideration or through payment or disposition of
deferred consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a) reasonable
and customary brokerage commissions, underwriting fees and discounts, legal and
accounting fees, filing fees, finder’s fees and other similar fees and
commissions and (b) the amount of taxes payable in connection with or as a
result of such transaction and (c) the amount of any Debt secured by a Lien on
such asset that, by the terms of the agreement or instrument governing such
Debt, is required to be repaid upon such disposition, in each case to the
extent, but only to the extent, that the amounts so deducted are, at the time of
receipt of such cash, actually paid to a Person that is not an Affiliate of such
Person and are properly attributable to such transaction or to the asset that is
the subject thereof.

 

“Note” means a Revolving Credit Note or a Term Note.

 

“Notice of Borrowing” has the meaning specified in Section 2.02(a).

 

“Notice of Issuance” has the meaning specified in Section 2.03(a).

 

“Other Taxes” has the meaning specified in Section 2.14(b).

 

“PBGC” means the Pension Benefit Guaranty Corporation (or any successor).

 

“Permitted Receivables Financing” means the limited recourse sale (or other
transfer) of accounts receivable by the Company or any of its Subsidiaries in
connection with the securitization thereof, which sale (or other transfer) is
non-recourse to the extent customary in securitizations and consistent with past
practice and which is upon terms and conditions reasonably satisfactory to the
Administrative Agent; provided that the sum of, without duplication, (a) the
aggregate Invested Amounts and (b) the outstanding principal amount of
obligations secured by receivables (and related assets) for all such Permitted
Receivables Financings shall not exceed $250,000,000 at any time outstanding.

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, unincorporated association, joint venture,
limited liability company or other entity, or a government or any political
subdivision or agency thereof.

 

“Plan” means a Single Employer Plan or a Multiple Employer Plan.

 

“Public Debt Rating” means, as of any date, the rating that has been most
recently announced by either S&P or Moody’s, as the case may be, for any class
of non-credit enhanced long-term senior unsecured debt issued by the Company or,
if either of S&P or Moody’s has issued more than one such rating, the lowest
such rating issued by such rating agency. For purposes of the foregoing, (a) if
only one of S&P and Moody’s shall have in effect a Public Debt Rating, the
Applicable Margin, the Applicable Facility Fee Rate and the Applicable
Utilization Fee shall be determined by reference to the available rating; (b) if
neither S&P nor Moody’s shall have in effect a Public Debt Rating, the
Applicable Margin, the Applicable Facility Fee Rate and the Applicable
Utilization Fee will be set in accordance with Level 6 under the definition of
“Applicable Margin”, “Applicable Facility Fee Rate” or “Applicable Utilization
Fee”, as the case may be; (c) if any rating established by S&P or Moody’s shall
be changed, such change shall be effective as of the date on which such change
is first announced publicly by the rating agency making such change; (d) if S&P
or Moody’s shall change the basis on which ratings are established, each
reference to the Public Debt Rating announced by S&P or Moody’s, as the case may
be, shall refer to the then equivalent rating by S&P or Moody’s, as the case may
be; and (e) if the ratings established by S&P

 

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and Moody’s shall fall within different levels below Level 2, the Applicable
Margin, Applicable Facility Fee Rate and the Applicable Utilization Fee shall be
based upon the higher rating, unless the lower of such ratings is more than one
level below the higher of such ratings, in which case the Applicable Margin, the
Applicable Facility Fee Rate and the Applicable Utilization Fee shall be based
upon the level that is one level above the lower of such ratings.

 

“Ratable Share” of any amount means, with respect to any Revolving Credit Lender
at any time, the product of (a) a fraction, the numerator of which is the amount
of such Lender’s Revolving Credit Commitment at such time and the denominator of
which is the aggregate Revolving Credit Commitments at such time and (b) such
amount.

 

“Receivables Subsidiary” means a Domestic Subsidiary of the Company that has as
its sole purpose to engage in, and engages solely in, Permitted Receivables
Financings permitted under this Agreement.

 

“Reference Banks” means Citibank and KeyBank National Association.

 

“Register” has the meaning specified in Section 9.07(d).

 

“Required Lenders” means at any time Lenders owed at least a majority in
interest of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, (b) the aggregate Available Amount of all Letters of
Credit outstanding at such time, (c) the aggregate unused Commitments under the
Term Facility at such time and (d) the aggregate Unused Revolving Credit
Commitments at such time. For purposes of this definition, the Available Amount
of each Letter of Credit shall be considered to be owed to the Revolving Credit
Lenders ratably in accordance with their respective Revolving Credit
Commitments.

 

“Revolving Credit Advance” means an advance by a Lender to the Borrower as part
of a Borrowing under Section 2.01(a) and refers to a Base Rate Advance or a
Eurodollar Rate Advance (each of which shall be a “Type” of Advance).

 

“Revolving Credit Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made by the Revolving Credit Lenders.

 

“Revolving Credit Commitment” means as to any Lender (a) the amount set forth
opposite such Lender’s name on Schedule I hereto as such Lender’s “Revolving
Credit Commitment” or (b) if such Lender has entered into any Assignment and
Acceptance, the amount set forth for such Lender in the Register maintained by
the Agent pursuant to Section 9.07(d), as such amount may be reduced pursuant to
Section 2.05.

 

“Revolving Credit Facility” means, at any time, the aggregate amount of the
Revolving Credit Lenders’ Revolving Credit Commitments at such time.

 

“Revolving Credit Lender” means any Lender that has a Revolving Credit
Commitment.

 

“Revolving Credit Note” means a promissory note of a Borrower payable to the
order of any Revolving Credit Lender, delivered pursuant to a request made under
Section 2.16 in substantially the form of Exhibit A-1 hereto, evidencing the
aggregate indebtedness of such Borrower to such Lender resulting from the
Revolving Credit Advances made by such Lender.

 

“S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

 

“Single Employer Plan” means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of the Company or any
ERISA Affiliate and no Person other than the Company and the ERISA Affiliates or
(b) was so maintained and in respect of which the Company or any ERISA Affiliate
could have liability under Section 4069 of ERISA in the event such plan has been
or were to be terminated.

 

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“Subordinated Obligations” has the meaning specified in Section 7.05.

 

“Subsidiary” of any Person means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more than 50%
of (a) the issued and outstanding capital stock having ordinary voting power to
elect a majority of the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited
liability company, partnership or joint venture or (c) the beneficial interest
in such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

“Subsidiary Guarantor” means each Domestic Subsidiary of the Company existing on
the date hereof (other than those Domestic Subsidiaries listed on Schedule 1.01
hereto) and each other Material Domestic Subsidiary of the Company that becomes
a party to the Subsidiary Guaranty pursuant to Section 5.01(i).

 

“Subsidiary Guaranty” has the meaning specified in Section 3.01(h)(i).

 

“Target” means Noveon International, Inc.

 

“Taxes” has the meaning specified in Section 2.14(a).

 

“Term Advance” has the meaning specified in Section 2.01(c).

 

“Term Borrowing” means a borrowing consisting of simultaneous Term Advances of
the same Type made by the Term Lenders.

 

“Term Commitment” means as to any Lender (a) the amount set forth opposite such
Lender’s name on Schedule I hereto as such Lender’s “Term Commitment” or (b) if
such Lender has entered into any Assignment and Acceptance, the amount set forth
for such Lender in the Register maintained by the Agent pursuant to Section
9.07(d) as such Lender’s “Term Commitment”, as such amount may be reduced
pursuant to Section 2.05.

 

“Term Facility” means, at any time, the aggregate amount of the Term Lenders’
Term Commitments at such time.

 

“Term Lender” means any Lender that has a Term Commitment.

 

“Term Note” means a promissory note of a Borrower payable to the order of any
Term Lender, delivered pursuant to a request made under Section 2.16 in
substantially the form of Exhibit A-2 hereto, evidencing the indebtedness of
such Borrower to such Lender resulting from the Term Advances made by such
Lender.

 

“Termination Date” means the earlier of (a) August 24, 2009 and (b) the date of
termination in whole of the Commitments pursuant to Section 2.05 or 6.01.

 

“Type” refers to the distinction between Base Rate Advances and Eurodollar Rate
Advances.

 

“Unused Revolving Credit Commitment” means, with respect to each Revolving
Credit Lender at any time, (a) such Lender’s Revolving Credit Commitment at such
time minus (b) the sum of (i) the aggregate principal amount of all Revolving
Credit Advances made by such Lender (in its capacity as a Revolving Credit
Lender) and outstanding at such time, plus (ii) such Lender’s Ratable Share of
the aggregate Available Amount of all the Letters of Credit outstanding at such
time.

 

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“Voting Stock” means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.

 

SECTION 1.02. Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
“from” means “from and including” and the words “to” and “until” each mean “to
but excluding”.

 

SECTION 1.03. Accounting Terms. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with generally accepted accounting principles in the United States, as in effect
from time to time (“GAAP”); provided that, if the Company notifies the Agent
that the Company requests an amendment to any provision hereof as a result of a
change in GAAP or in the application thereof on the operation of such provision
(or if the Agent notifies the Company 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 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.

 

ARTICLE II

 

AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT

 

SECTION 2.01. The Advances and Letters of Credit. (a) Revolving Credit Advances.
Each Revolving Credit Lender severally agrees, on the terms and conditions
hereinafter set forth, to make Revolving Credit Advances to the Borrowers from
time to time on any Business Day during the period from the Effective Date until
the Termination Date in an amount not to exceed at any time such Lender’s Unused
Revolving Credit Commitment. Each Borrowing shall be in an amount not less than
the Borrowing Minimum or a Borrowing Multiple in excess thereof and shall
consist of Revolving Credit Advances of the same Type made on the same day by
the Revolving Credit Lenders ratably according to their respective Revolving
Credit Commitments. Within the limits of each Revolving Credit Lender’s
Revolving Credit Commitment, the Borrowers may borrow under this Section
2.01(a), prepay pursuant to Section 2.10 and reborrow under this Section
2.01(a).

 

(b) Letters of Credit. Each Issuing Bank agrees, on the terms and conditions
hereinafter set forth, to issue letters of credit (each, a “Letter of Credit”)
for the account of any Borrower from time to time on any Business Day during the
period from the Effective Date until 30 days before the Termination Date in an
aggregate Available Amount (i) for all Letters of Credit issued by each Issuing
Bank not to exceed at any time the lesser of (x) the Letter of Credit Facility
at such time and (y) such Issuing Bank’s Letter of Credit Commitment at such
time and (ii) for each such Letter of Credit not to exceed an amount equal to
the aggregate Unused Revolving Credit Commitments of the Revolving Credit
Lenders at such time. Each Letter of Credit shall be in a face amount of
$1,000,000 or more. No Letter of Credit shall have an expiration date (including
all rights of the applicable Borrower or the beneficiary to require renewal)
later than the earlier of (x) the date that is one year after the date of
issuance thereof or (y) 10 Business Days prior to the Termination Date. Within
the limits referred to above, the Borrowers may request the issuance of Letters
of Credit under this Section 2.01(b), repay any Revolving Credit Advances
resulting from drawings thereunder pursuant to Section 2.03(c) and request the
issuance of additional Letters of Credit under this Section 2.01(b). Each letter
of credit listed on Schedule 2.01(b) shall be deemed to constitute a Letter of
Credit issued hereunder, and each Lender that is an issuer of such a Letter of
Credit shall, for purposes of Section 2.03, be deemed to be an Issuing Bank for
each such letter of credit, provided that any renewal or replacement of any such
letter of credit shall be issued by an Issuing Bank pursuant to the terms of
this Agreement.

 

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(c) The Term Advances. Each Term Lender severally agrees, on the terms and
conditions hereinafter set forth, to make a single advance (a “Term Advance”) to
any Borrower on the Effective Date in an amount not to exceed such Lender’s Term
Commitment. The Term Borrowing shall consist of Term Advances made
simultaneously by the Term Lenders ratably according to their Term Commitments.
Amounts borrowed under this Section 2.01(c) and repaid or prepaid may not be
reborrowed.

 

SECTION 2.02. Making the Advances. (a) Except as otherwise provided in Section
2.03(c), each Borrowing shall be made on notice, given not later than (x) 11:00
A.M. (New York City time) on the third Business Day prior to the date of the
proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate
Advances or (y) 11:00 A.M. (New York City time) on the date of the proposed
Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the
applicable Borrower to the Agent, which shall give to each Appropriate Lender
prompt notice thereof by telecopier. Each such notice of a Borrowing (a “Notice
of Borrowing”) shall be by telephone, confirmed immediately in writing, or
telecopier in substantially the form of Exhibit B hereto, specifying therein the
requested (i) date and Facility of such Borrowing, (ii) Type of Advances
comprising such Borrowing, (iii) aggregate amount of such Borrowing, and (iv) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such Advance. Each Appropriate Lender shall, before 1:00 P.M.
(New York City time) on the date of such Borrowing, make available for the
account of its Applicable Lending Office to the Agent at the Agent’s Account, in
same day funds, such Lender’s ratable portion of such Borrowing. After the
Agent’s receipt of such funds and upon fulfillment of the applicable conditions
set forth in Section 3.03, the Agent shall make such funds available to the
Borrower that requested such Advance by depositing such funds to such account as
such Borrower shall specify.

 

(b) Anything in subsection (a) above to the contrary notwithstanding, (i) the
Borrowers may not select Eurodollar Rate Advances for any Borrowing if the
aggregate amount of such Borrowing is less than the Borrowing Minimum or if the
obligation of the Appropriate Lenders to make Eurodollar Rate Advances shall
then be suspended pursuant to Section 2.08 or 2.12 and (ii) the Eurodollar Rate
Advances may not be outstanding as part of more than fifteen separate
Borrowings.

 

(c) Each Notice of Borrowing shall be irrevocable and binding on the Borrower
giving such Notice. In the case of any Borrowing that the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower
giving such Notice shall indemnify each Appropriate Lender against any loss,
cost or expense incurred by such Lender as a result of any failure to fulfill on
or before the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Section 3.03, including, without limitation,
any loss, cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Advance to be
made by such Lender as part of such Borrowing when such Advance, as a result of
such failure, is not made on such date.

 

(d) Unless the Agent shall have received notice from an Appropriate Lender prior
to the date of any Borrowing under a Facility under which such Lender has a
Commitment that such Lender, contrary to its Commitment, will not make available
to the Agent such Lender’s ratable portion of such Borrowing, the Agent may
assume that such Lender has made such portion available to the Agent on the date
of such Borrowing in accordance with subsection (a) of this Section 2.02 and the
Agent may, in reliance upon such assumption, make available to the applicable
Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the Agent, such
Lender and such Borrower severally agree to repay without duplication to the
Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to such
Borrower until the date such amount is repaid to the Agent, at (i) in the case
of such Borrower, the interest rate applicable at the time to Advances
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate. If such Lender shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Lender’s Advance as part of such
Borrowing for purposes of this Agreement.

 

(e) The failure of any Lender to make the Advance to be made by it as part of
any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing. Nothing herein shall be
deemed to prejudice any rights which any Borrower may have against a Lender as a
result of any default by a Lender hereunder.

 

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SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit. (a) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 1:00 P.M. (New York City time) on the fifth
Business Day prior to the date of the proposed issuance of such Letter of Credit
(or on such shorter notice as the applicable Issuing Bank may agree), by any
Borrower to any Issuing Bank, and such Issuing Bank shall give the Agent, prompt
notice thereof by telecopier. Each such notice of issuance of a Letter of Credit
(a “Notice of Issuance”) shall be by telephone, confirmed immediately in
writing, or telecopier, specifying therein the requested (i) date of such
issuance (which shall be a Business Day), (ii) Available Amount of such Letter
of Credit, (iii) expiration date of such Letter of Credit (which shall not be
later one year after the issuance thereof), (iv) name and address of the
beneficiary of such Letter of Credit and (v) form of such Letter of Credit, and
shall be accompanied by such customary application and agreement for letter of
credit as such Issuing Bank may specify to the Borrower requesting such issuance
for use in connection with such requested Letter of Credit (a “Letter of Credit
Agreement”). If the requested form of such Letter of Credit is acceptable to
such Issuing Bank in its sole discretion, such Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article III, make such
Letter of Credit available to the Borrower requesting such issuance at its
office referred to in Section 9.02 or as otherwise agreed with such Borrower in
connection with such issuance. In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this Agreement,
the provisions of this Agreement shall govern.

 

(b) 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 applicable Issuing Bank or the Revolving Credit Lenders, such
Issuing Bank hereby grants to each Revolving Credit Lender, and each Revolving
Credit Lender hereby acquires from such Issuing Bank, a participation in such
Letter of Credit equal to such Lender’s Ratable Share of the aggregate amount
available to be drawn under such Letter of Credit. The Borrowers hereby agree to
each such participation. In consideration and in furtherance of the foregoing,
each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay
to the Agent, for the account of such Issuing Bank, such Lender’s Ratable Share
of each drawing made under a Letter of Credit funded by such Issuing Bank and
not reimbursed by the applicable Borrower on the date made, or of any
reimbursement payment required to be refunded to a Borrower for any reason. Each
Revolving Credit Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph 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 Revolving Credit Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever. Each Revolving Credit Lender further acknowledges and agrees that
its participation in each Letter of Credit will be automatically adjusted to
reflect such Lender’s Ratable Share of the Available Amount of such Letter of
Credit at each time such Lender’s Revolving Credit Commitment is amended
pursuant to an assignment in accordance with Section 9.07 or otherwise pursuant
to this Agreement.

 

(c) Drawing and Reimbursement. The payment by an Issuing Bank of a draft drawn
under any Letter of Credit shall constitute for all purposes of this Agreement
the making by any such Issuing Bank of a Revolving Credit Advance, which shall
be a Base Rate Advance, in the amount of such draft. Each Issuing Bank shall
give prompt notice (and such Issuing Bank will use its commercially reasonable
efforts to deliver such notice within one Business Day) of each drawing under
any Letter of Credit issued by it to the applicable Borrower and the Agent. Upon
written demand by such Issuing Bank, with a copy of such demand to the Agent,
each Revolving Credit Lender shall pay to the Agent such Lender’s Ratable Share
of such outstanding Revolving Credit Advance, by making available for the
account of its Applicable Lending Office to the Agent for the account of such
Issuing Bank, by deposit to the Agent’s Account, in same day funds, an amount
equal to the portion of the outstanding principal amount of such Revolving
Credit Advance to be funded by such Lender. Promptly after receipt thereof, the
Agent shall transfer such funds to such Issuing Bank. Each Revolving Credit
Lender agrees to fund its Ratable Share of an outstanding Revolving Credit
Advance on (i) the Business Day on which demand therefor is made by such Issuing
Bank, provided that notice of such demand is given not later than 11:00 A.M.
(New York City time) on such Business Day, or (ii) the first Business Day next
succeeding such demand if notice of such demand is given after such time. If and
to the extent that any Revolving Credit Lender shall not have so made the amount
of such Revolving Credit Advance available to the Agent, such Lender agrees to
pay to the Agent forthwith on demand such amount together with interest thereon,
for each day from the date of demand by any such Issuing Bank until the date
such amount is paid to the Agent, at the Federal Funds Rate for its account or
the account of such Issuing Bank, as applicable. If such Revolving Credit Lender
shall pay to the Agent such amount for the account of any such Issuing Bank on
any Business Day, such amount so paid in respect of principal shall constitute a
Revolving Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Revolving Credit
Advance made by such Issuing Bank shall be reduced by such amount on such
Business Day.

 

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(d) Letter of Credit Reports. Each Issuing Bank shall furnish (i) to the Agent
on the first Business Day of each month a written report summarizing issuance
and expiration dates of Letters of Credit during the preceding month and
drawings during such month under all Letters of Credit issued by it and (ii) to
the Agent and each Revolving Credit Lender on the first Business Day of each
calendar quarter a written report setting forth the average daily aggregate
Available Amount during the preceding calendar quarter of all Letters of Credit
issued by it.

 

(e) Failure to Make Revolving Credit Advances. The failure of any Revolving
Credit Lender to make the Revolving Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Revolving Credit Lender
of its obligation hereunder to make its Revolving Credit Advance on such date,
but no Lender shall be responsible for the failure of any other Revolving Credit
Lender to make the Revolving Credit Advance to be made by such other Lender on
such date.

 

SECTION 2.04. Fees. (a) Facility Fee. The Borrowers agree to pay to the Agent
for the account of each Revolving Credit Lender a facility fee on the aggregate
amount of such Lender’s Revolving Credit Commitment from the Effective Date in
the case of each Initial Lender and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Revolving Credit Lender
in the case of each other Revolving Credit Lender until the Termination Date at
a rate per annum equal to the Applicable Facility Fee Rate in effect from time
to time, payable in arrears quarterly on the last day of each March, June,
September and December, commencing September 30, 2004, and on the Termination
Date.

 

(b) Letter of Credit Fees. (i) The Borrowers shall pay to the Agent for the
account of each Revolving Credit Lender a commission on such Lender’s Ratable
Share of the average daily aggregate Available Amount of all Letters of Credit
outstanding from time to time at a rate per annum equal to the Applicable Margin
for Eurodollar Rate Advances in effect from time to time, payable in arrears
quarterly on the last day of each March, June, September and December,
commencing September 30, 2004, and on the Termination Date, and after the
Termination Date payable upon demand; provided that the Applicable Margin shall
increase by 2% upon the occurrence and during the continuation of an Event of
Default if the Borrowers are required to pay default interest pursuant to
Section 2.07(b).

 

(ii) The Borrowers shall pay to each Issuing Bank for its own account such
reasonable and customary fronting, issuance, presentation, amendment and other
processing fees as may from time to time be agreed in writing between the
Borrowers and such Issuing Bank.

 

(c) Agent’s Fees. The Company shall pay to the Agent for its own account the
fees set forth in the fee letter between the Company and the Agent or as may
from time to time be otherwise agreed in writing between the Company and the
Agent.

 

SECTION 2.05. Termination or Reduction of the Commitments. (a) Optional. (i) The
Company shall have the right, upon at least three Business Days’ notice to the
Agent, to terminate in whole or permanently reduce ratably in part the Unused
Revolving Credit Commitments, provided that each partial reduction (A) shall be
in the aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and (B) shall be made ratably among the Revolving Credit Lenders
in accordance with their Revolving Credit Commitments. (ii) The Company shall
have the right, upon at least three Business Days’ notice to the Agent, to
terminate in whole or permanently reduce ratably in part the unused Letter of
Credit Commitments, provided that, to the extent practicable, each partial
reduction shall be made ratably among the Issuing Banks in accordance with their
Letter of Credit Commitments.

 

(b) Mandatory. On the Effective Date, after giving effect to the Term Borrowing
made on such date, and from time to time thereafter upon each repayment or
prepayment of the Term Advances, the aggregate Term Commitments of the Term
Lenders shall be automatically and permanently reduced, on a pro rata basis by
an amount equal to the amount by which the aggregate Term Commitments
immediately prior to such reduction exceed the aggregate unpaid principal amount
of the Term Advances then outstanding.

 

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SECTION 2.06. Repayment. (a) Revolving Credit Advances. The Borrowers shall
repay to the Agent for the ratable account of the Revolving Credit Lenders on
the Termination Date the aggregate principal amount of the Revolving Credit
Advances then outstanding.

 

(b) Letter of Credit Reimbursements. The obligations of the Borrowers under this
Agreement, any Letter of Credit Agreement and any other agreement or instrument,
in each case, relating to any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without limitation, the following
circumstances (it being understood that any such payment by the Borrowers is
without prejudice to, and does not constitute a waiver of, any rights the
Borrowers might have or might acquire as a result of the payment by any
Revolving Credit Lender of any draft or the reimbursement by the Borrowers
thereof or any claim that a Borrower might have under Section 9.13):

 

(i) any lack of validity or enforceability of this Agreement, any Letter of
Credit, any Letter of Credit Agreement or any other agreement or instrument, in
each case, relating thereto (all of the foregoing being, collectively, the “L/C
Related Documents”);

 

(ii) any change in the time, manner or place of payment of, or in any other term
of, all or any of the obligations of the Borrowers in respect of any L/C Related
Document or any other amendment or waiver of or any consent to departure from
all or any of the L/C Related Documents;

 

(iii) the existence of any claim, set-off, defense or other right that the
Borrowers may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for which any such beneficiary or any such
transferee may be acting), any Issuing Bank, the Agent, any Lender or any other
Person, whether in connection with the transactions contemplated by the L/C
Related Documents or any unrelated transaction;

 

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

 

(v) payment by any Issuing Bank under a Letter of Credit against presentation of
a draft or certificate that does not strictly comply with the terms of such
Letter of Credit;

 

(vi) any exchange, release or non-perfection of any collateral, or any release
or amendment or waiver of or consent to departure from any guarantee, for all or
any of the obligations of the Borrowers in respect of the L/C Related Documents;
or

 

(vii) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing, including, without limitation, any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrowers or a guarantor.

 

(c) Term Advances. The Borrowers shall repay Term Advances to the Agent for the
ratable account of the Term Lenders in quarterly installments of $14,375,000 on
the last day of each March, June, September and December, commencing March 31,
2005 and the balance, if any, on the fifth anniversary of the Effective Date.

 

SECTION 2.07. Interest on Advances. (a) Scheduled Interest. The Borrowers shall
pay interest on the unpaid principal amount of each Advance owing to each
Appropriate Lender from the date of such Advance until such principal amount
shall be paid in full, at the following rates per annum:

 

(i) Base Rate Advances. During such periods as such Advance is a Base Rate
Advance, a rate per annum equal at all times to the sum of (x) the Base Rate in
effect from time to time plus (y) the Applicable Margin in effect from time to
time plus (z) the Applicable Utilization Fee, if applicable, in effect from time
to time, payable in arrears quarterly on the last day of each March, June,
September and December during such periods and on the date such Base Rate
Advance shall be Converted or paid in full.

 

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(ii) Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (x) the Eurodollar Rate for such
Interest Period for such Advance plus (y) the Applicable Margin in effect from
time to time plus (z) the Applicable Utilization Fee, if applicable, in effect
from time to time, payable in arrears on the last day of such Interest Period
and, if such Interest Period has a duration of more than three months, on each
day that occurs during such Interest Period every three months from the first
day of such Interest Period and on the date such Eurodollar Rate Advance shall
be Converted or paid in full.

 

(b) Default Interest. Upon the occurrence and during the continuance of an Event
of Default that has not been waived, the Agent may, and upon the request of the
Required Lenders shall, require the Borrowers to pay interest (“Default
Interest”) on (i) the unpaid principal amount of each Advance owing to each
Lender, payable in arrears on the dates referred to in clause (a)(i) or (a)(ii)
above, at a rate per annum equal at all times to 2% per annum above the rate per
annum required to be paid on such Advance pursuant to clause (a)(i) or (a)(ii)
above and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid on Base Rate Advances pursuant to clause (a)(i) above;
provided, however, that following acceleration of the Advances pursuant to
Section 6.01, Default Interest shall accrue and be payable hereunder whether or
not previously required by the Agent.

 

SECTION 2.08. Interest Rate Determination. (a) Each Reference Bank agrees to
furnish to the Agent timely information for the purpose of determining each
Eurodollar Rate. If any one or more of the Reference Banks shall not furnish
such timely information to the Agent for the purpose of determining any such
interest rate, the Agent shall determine such interest rate on the basis of
timely information furnished by the remaining Reference Banks. The Agent shall
give prompt notice to the Borrowers and the Appropriate Lenders of the
applicable interest rate determined by the Agent for purposes of Section
2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference Bank for
the purpose of determining the interest rate under Section 2.07(a)(ii).

 

(b) If, with respect to any Eurodollar Rate Advances under any Facility, the
Required Lenders notify the Agent that the Eurodollar Rate for any Interest
Period for such Advances will not adequately reflect the cost to such Required
Lenders, as determined in the exercise of each such Lender’s commercially
reasonable discretion, of making, funding or maintaining their respective
Eurodollar Rate Advances for such Interest Period, the Agent shall forthwith so
notify the Borrowers and the Appropriate Lenders, whereupon (A) the Borrowers
will, on the last day of the then existing Interest Period therefor, either (x)
prepay such Advances or (y) Convert such Advances into Base Rate Advances and
(B) the obligation of the Appropriate Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Agent shall notify
the Borrowers and the Appropriate Lenders that the circumstances causing such
suspension no longer exist.

 

(c) If any Borrower shall fail to select the duration of any Interest Period for
any Eurodollar Rate Advances in accordance with the provisions contained in the
definition of “Interest Period” in Section 1.01, the Agent will forthwith so
notify such Borrower and the Appropriate Lenders and such Advances will
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances.

 

(d) On the date on which the aggregate unpaid principal amount of Eurodollar
Rate Advances comprising any Borrowing shall be reduced, by payment or
prepayment or otherwise, to less than the Borrowing Minimum, such Advances shall
automatically Convert into Base Rate Advances.

 

(e) Upon the occurrence and during the continuance of any Event of Default that
has not been waived, (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, be Converted into Base
Rate Advances and (ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.

 

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(f) If Telerate Markets Page 3750 is unavailable and fewer than two Reference
Banks furnish timely information to the Agent for determining the Eurodollar
Rate for any Eurodollar Rate Advances,

 

(i) the Agent shall forthwith notify the Borrowers and the Appropriate Lenders
that the interest rate cannot be determined for such Eurodollar Rate Advances,

 

(ii) with respect to Eurodollar Rate Advances, each such Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance (or if such Advance is then a Base Rate
Advance, will continue as a Base Rate Advance), and

 

(iii) the obligation of the Lenders to make Eurodollar Rate Advances or to
Convert Advances into Eurodollar Rate Advances shall be suspended until the
Agent shall notify the Borrowers and the Lenders that the circumstances causing
such suspension no longer exist.

 

SECTION 2.09. Optional Conversion of Advances. Any Borrower may on any Business
Day, upon notice given to the Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed Conversion and
subject to the provisions of Sections 2.08 and 2.12, Convert any or all Advances
of one Type comprising the same Borrowing made to it into Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances into
Base Rate Advances shall be made only on the last day of an Interest Period for
such Eurodollar Rate Advances, any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(b), no Conversion of any Advances shall result in more
separate Borrowings than permitted under Section 2.02(b) and each Conversion of
Advances comprising part of the same Borrowing under any Facility shall be made
ratably among the Appropriate Lenders in accordance with their Commitments under
such Facility. Each such notice of a Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Advances to
be Converted, and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for each such Advance. Each notice of
Conversion shall be irrevocable and binding on the Borrower giving such notice.

 

SECTION 2.10. Prepayments of Advances. (a) Optional. Any Borrower may, upon
notice at least two Business Days prior to the date of such prepayment, in the
case of Eurodollar Rate Advances, and not later than 11:00 A.M. (New York City
time) on the date of such prepayment, in the case of Base Rate Advances, to the
Agent stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given, such Borrower shall prepay the
outstanding principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount not less
than the Borrowing Minimum or a Borrowing Multiple in excess thereof and (y) in
the event of any such prepayment of a Eurodollar Rate Advance, the applicable
Borrower shall be obligated to reimburse the Appropriate Lenders in respect
thereof pursuant to Section 9.04(c). Prepayments of Term Advances shall be
applied in forward order of maturity.

 

(b) Mandatory. (i) The Borrowers shall, on the first Business Day after the date
of receipt of the Net Cash Proceeds in excess of $100,000,000 individually or
$250,000,000 in the aggregate by the Company or any of its Subsidiaries from the
sale, lease, transfer or other disposition of any assets of the Company or any
of its Subsidiaries (other than any sale, lease, transfer or other disposition
of assets pursuant to clause (i), (ii), (iii) or (iv) of Section 5.02(d)),
prepay an aggregate principal amount of the Term Advances comprising part of the
same Borrowings in an amount equal to the amount of such Net Cash Proceeds. Each
such prepayment shall be applied ratably to the Term Advances comprising a
Borrowing in forward order of maturity.

 

(ii) Each prepayment made pursuant to this Section 2.10(b) shall be made
together with any interest accrued to the date of such prepayment on the
principal amounts prepaid and, in the case of any prepayment of a Eurodollar
Rate Advance on a date other than the last day of an Interest Period or at its
maturity, any additional amounts which the Borrowers shall be obligated to
reimburse to the Appropriate Lenders in respect thereof pursuant to Section
9.04(c). The Agent shall give prompt notice of any prepayment required under
this Section 2.10(b) to the Borrowers and the Appropriate Lenders.

 

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SECTION 2.11. Increased Costs. (a) If, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority including, without limitation, any agency of the European
Union or similar monetary or multinational authority (whether or not having the
force of law), there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining Eurodollar Rate Advances or agreeing
to issue or of issuing or maintaining or participating in Letters of Credit
(excluding for purposes of this Section 2.11 any such increased costs resulting
from taxes (as to which Section 2.14 shall govern)), then the Borrowers shall
from time to time, without premium or penalty, upon written demand by such
Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender additional amounts sufficient to compensate such Lender
for such increased cost; provided however, that at such time such Lender shall
be generally assessing such amounts on a non-discriminatory basis against
borrowers under agreements having provisions similar to this Section. A
certificate as to the amount of such increased cost, submitted to the Borrowers
and the Agent by such Lender, shall be conclusive and binding for all purposes,
absent error in the calculation of such amounts.

 

(b) If any Lender determines that compliance with any law or regulation or any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender (taking into consideration such Lender’s (or such
controlling corporation’s) policies with respect to capital adequacy) and that
the amount of such capital is increased by or based upon the existence of such
Lender’s commitment to lend or to issue or participate in Letters of Credit
hereunder and other commitments of this type or the issuance or maintenance of
or participation in the Letters of Credit (or similar contingent obligations),
then, upon written demand by such Lender (with a copy of such demand to the
Agent), the Borrowers shall pay to the Agent for the account of such Lender,
from time to time as specified by such Lender, without premium or penalty,
additional amounts sufficient to compensate such Lender or such corporation in
the light of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of such
Lender’s commitment to lend or to issue or participate in Letters of Credit
hereunder or the issuance or maintenance of or participation in the Letters of
Credit; provided, however, that at such time such Lender shall be generally
assessing such amounts on a non-discriminatory basis against borrowers under
agreements having provisions similar to this Section. A certificate as to such
amounts submitted to the Borrowers and the Agent by such Lender shall be
conclusive and binding for all purposes, absent error in the calculation of such
amounts.

 

(c) Each Lender will notify the Company of any change that will entitle such
Lender to compensation under this Section 2.10 as promptly as practicable, but
in any event within 90 days after such Lender obtains knowledge thereof;
provided, however, that, if any Lender fails to give such notice within 90 days
after it obtains knowledge of such change, such Lender shall, with respect to
compensation payable in respect of any costs resulting from such change, only be
entitled to payment for costs incurred from and after the date that such Lender
does give such notice plus, if such change shall have retroactive effect, costs
resulting from such change during the period of retroactive effect thereof. Any
Lender claiming any additional amounts payable pursuant to this Section agrees
to use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to change the jurisdiction of its Eurodollar Lending
Office if the making of such a change would avoid the need for, or reduce the
amount of, any such additional amounts that may thereafter accrue and would not,
in the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.

 

SECTION 2.12. Illegality. Notwithstanding any other provision of this Agreement,
if any Lender shall notify the Agent that the introduction of or any change in
or in the interpretation of any law or regulation makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
any Lender or its Eurodollar Lending Office to perform its obligations hereunder
to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
hereunder, (a) each Eurodollar Rate Advance under the Facility under which such
Lender has a Commitment will automatically, upon such demand, be Converted into
a Base Rate Advance and (b) the obligation of the Appropriate Lenders to make
Eurodollar Rate Advances or to Convert Advances into Eurodollar Rate Advances
shall be suspended until the Agent shall notify the Borrowers and the Lenders
that the circumstances causing such suspension no longer exist.

 

SECTION 2.13. Payments and Computations. (a) The Borrowers shall make each
payment hereunder, irrespective of any right of counterclaim or set-off, not
later than 11:00 A.M. (New York City time) on the day when due in U.S. dollars
to the Agent at the Agent’s Account in same day funds. The Agent will promptly

 

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thereafter cause to be distributed like funds relating to the payment of
principal or interest or facility fees ratably (other than amounts payable
pursuant to Section 2.04(b)(ii), 2.11, 2.14 or 9.04(c)) to the Appropriate
Lenders for the account of their respective Applicable Lending Offices, and like
funds relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement. Upon its acceptance of
an Assignment and Acceptance and recording of the information contained therein
in the Register pursuant to Section 9.07(c), from and after the effective date
specified in such Assignment and Acceptance, the Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender assignee thereunder, and the parties to such Assignment and Acceptance
shall make all appropriate adjustments in such payments for periods prior to
such effective date directly between themselves.

 

(b) All computations of interest based on the Base Rate shall be made by the
Agent on the basis of a year of 365 or 366 days, as the case may be, and all
computations of interest based on the Eurodollar Rate or the Federal Funds Rate
and of fees and Letter of Credit commissions shall be made by the Agent on the
basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest, fees or commissions are payable. Each determination by the
Agent of an interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error.

 

(c) Whenever any payment hereunder or under the Notes shall be stated to be due
on a day other than a Business Day, such payment shall be made on the Business
Day next succeeding, and such extension of time shall in such case be included
in the computation of payment of interest, fee or commission, as the case may
be; provided, however, that, if such extension would cause payment of interest
on or principal of Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the Business Day next preceding.

 

(d) Unless the Agent shall have received notice from the applicable Borrower
prior to the date on which any payment is due to the Appropriate Lenders
hereunder that such Borrower will not make such payment in full, the Agent may
assume that such Borrower has made such payment in full to the Agent on such
date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Appropriate Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent any Borrower shall not have so
made such payment in full to the Agent, each Lender shall repay to the Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Agent, at the
Federal Funds Rate.

 

(e) If the Agent receives funds for application to the obligations hereunder
under circumstances for which neither this Agreement nor any Borrower specifies
the Advances or the Facility to which, or the manner in which, such funds are to
be applied, the Agent may, but shall not be obligated to, elect to distribute
such funds to each Lender ratably in accordance with such Lender’s proportionate
share of the sum of the principal amount of all outstanding Advances and the
Available Amount of all Letters of Credit then outstanding, in repayment or
prepayment of such of the outstanding Advances or other obligations owed to such
Lender, and for application to such principal installments, as the Agent shall
direct.

 

SECTION 2.14. Taxes. (a) Any and all payments by the Borrowers to or for the
account of any Lender or the Agent hereunder or under the Notes shall be made,
in accordance with Section 2.13 or the applicable provisions of such other
documents, free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Agent, (i) foreign, United States federal, state and local taxes imposed on its
overall net income and franchise taxes imposed on it in lieu of net income taxes
by the jurisdiction under the laws of which such Lender or the Agent (as the
case may be) is organized or any political subdivision thereof, or by any
jurisdiction where such Lender or the Agent (as the case may be) is doing
business or any political subdivision thereof and, in the case of each Lender,
taxes imposed on its overall net income, and franchise taxes imposed on it in
lieu of net income taxes, by the jurisdiction of such Lender’s Applicable
Lending Office or any political subdivision thereof, or by any jurisdiction
where such Lender’s Applicable Lending Office is doing business or any political
subdivision thereof and (ii) United States state and local withholding taxes (in
the appropriate amount) on the gross amount of interest paid by the Borrowers
for which such Lender or the Agent (as the case may be) is entitled to a credit
for such withholding taxes against a tax described in (i) (all such non-excluded
taxes, levies, imposts, deductions, charges,

 

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withholdings and liabilities in respect of payments hereunder or under the Notes
being hereinafter referred to as “Taxes”). If any Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or under
any Note or any other documents to be delivered hereunder to any Lender or the
Agent, (x) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.14) such Lender or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (y) such Borrower shall make such deductions and (z) such
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law. For the avoidance of
doubt, if any Borrower shall be required by a court of competent jurisdiction to
pay over an amount other than as Taxes, there shall be no adjustment as to such
payment under this Section 2.14(a).

 

(b) In addition, the Borrowers shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or under the Notes any other
documents to be delivered hereunder or from the execution, delivery or
registration of, performing under, or otherwise with respect to, this Agreement
or the Notes or any other documents to be delivered hereunder (hereinafter
referred to as “Other Taxes”).

 

(c) The Borrowers shall indemnify each Lender and the Agent for and hold it
harmless against the full amount of Taxes or Other Taxes (including, without
limitation, taxes of any kind imposed or asserted by any jurisdiction on amounts
payable under this Section 2.14) imposed on or paid by such Lender or the Agent
(as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or the Agent (as the case may
be) makes written demand therefor.

 

(d) Within 30 days after the date of any payment of Taxes, the Borrowers shall
furnish to the Agent, at its address referred to in Section 9.02, the original
or a certified copy of a receipt evidencing such payment to the extent such a
receipt is issued therefor, or other written proof of payment thereof that is
reasonably satisfactory to the Agent.

 

(e) Each Lender organized under the laws of a jurisdiction outside the United
States, on or prior to the date of its execution and delivery of this Agreement
in the case of each Initial Lender and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from time to time thereafter as reasonably requested in writing by
the Borrowers (but only so long as such Lender remains lawfully able to do so),
shall provide each of the Agent and the Borrowers with two original Internal
Revenue Service forms W-8BEN or W-8ECI, as appropriate, or any successor or
other form prescribed by the Internal Revenue Service, properly certifying that
such Lender is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or the Notes. If the form
provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes (and
tax withheld in excess of such rate shall be included in Taxes) unless and until
such Lender provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such form; provided, however, that,
if at the date of the Assignment and Acceptance pursuant to which a Lender
assignee becomes a party to this Agreement, the Lender assignor was entitled to
payments under subsection (a) in respect of United States withholding tax with
respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender assignee on such date. If any
form or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form W-8BEN
or W-8ECI, that the Lender reasonably considers to be confidential, the Lender
shall give notice thereof to the Borrowers and shall not be obligated to include
in such form or document such confidential information. For purposes of this
subsection (e), the terms “United States” and “United States person” shall have
the meanings specified in Section 7701 of the Internal Revenue Code

 

(f) For any period with respect to which a Lender has failed to provide the
Borrowers with the appropriate form, certificate or other document described in
Section 2.14(e) (other than if such failure is due to a change in law, or in the
interpretation or application thereof, occurring subsequent to the date on which
a form,

 

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certificate or other document originally was required to be provided, or if such
form otherwise is not required under subsection (e) above), such Lender shall
not be entitled to indemnification under Section 2.14(a) or (c) with respect to
Taxes imposed by the United States by reason of such failure and the Borrowers
may withhold at the full United States statutory withholding tax rate on
interest (currently, 30%); provided, however, that should a Lender become
subject to Taxes because of its failure to deliver a form, certificate or other
document required hereunder, the Borrowers shall take such steps as the Lender
shall reasonably request to assist the Lender to recover such Taxes.

 

SECTION 2.15. Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of the Advances owing to it (other than pursuant to
Section 2.11, 2.14 or 9.04(c)) in excess of its ratable share of payments on
account of the Advances obtained by all the Lenders, such Lender shall forthwith
purchase from the other Lenders such participations in the Advances owing to
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion
of such excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender’s ratable share (according to the proportion
of (i) the amount of such Lender’s required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Each Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.15 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off as
provided in Section 9.05) with respect to such participation as fully as if such
Lender were the direct creditor of such Borrower in the amount of such
participation.

 

SECTION 2.16. Evidence of Debt. (a) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
each Borrower to such Lender resulting from each Advance owing to such Lender
from time to time, including the amounts of principal and interest payable and
paid to such Lender from time to time hereunder in respect of Advances. Each
Borrower agrees that upon notice by any Lender to such Borrower (with a copy of
such notice to the Agent) to the effect that a Note is required or appropriate
in order for such Lender to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made by, such Lender,
such Borrower shall promptly execute and deliver to such Lender a Revolving
Credit Note and a Term Note, as applicable, in substantially the form of
Exhibits A-1 and A-2 hereto, respectively, payable to the order of such Lender
in a principal amount equal to the Revolving Credit Commitment and the Term
Commitment, respectively, of such Lender.

 

(b) The Register maintained by the Agent pursuant to Section 9.07(d) shall
include a control account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and amount of each
Borrowing made hereunder, the Type of Advances comprising such Borrowing, the
Facility of such Borrowing and, if appropriate, the Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from each Borrower to each Lender hereunder and (iv)
the amount of any sum received by the Agent from each Borrower hereunder and
each Lender’s share thereof.

 

(c) Entries made in good faith by the Agent in the Register pursuant to
subsection (b) above, and by each Lender in its account or accounts pursuant to
subsection (a) above, shall be prima facie evidence of the amount of principal
and interest due and payable or to become due and payable from each Borrower to,
in the case of the Register, each Lender and, in the case of such account or
accounts, such Lender, under this Agreement, absent manifest error; provided,
however, that the failure of the Agent or such Lender to make an entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrowers under this
Agreement.

 

SECTION 2.17. Use of Proceeds. The proceeds of the Advances shall be available
(and each of the Borrowers agrees that it or its Subsidiaries, as applicable,
shall use such proceeds) solely to repay Debt of the Company and for general
corporate purposes of the Company and its Subsidiaries.

 

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ARTICLE III

 

CONDITIONS TO EFFECTIVENESS AND LENDING

 

SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01. Section
2.01 of this Agreement shall become effective on and as of the first date on or
prior to November 15, 2004 (the “Effective Date”) on which the following
conditions precedent have been satisfied:

 

(a) There shall have occurred no Material Adverse Change since December 31,
2003.

 

(b) There shall exist no action, suit, investigation, litigation or proceeding
affecting the Company or any of its Subsidiaries pending or, to the knowledge of
the Company, threatened before any court, governmental agency or arbitrator that
(i) could be reasonably likely to have a Material Adverse Effect other than the
matters described on Schedule 3.01(b) hereto (the “Disclosed Litigation”) or
(ii) purports to affect the legality, validity or enforceability of this
Agreement or any Note or the consummation of the transactions contemplated
hereby, and there shall have been no material adverse change in the status, or
financial effect on the Company or any of its Subsidiaries, of the Disclosed
Litigation from that described on Schedule 3.01(b) hereto.

 

(c) Nothing shall have come to the attention of the Lenders during the course of
their due diligence investigation to lead them to believe that the Information
Memorandum was or has become misleading, incorrect or incomplete in any material
respect; without limiting the generality of the foregoing, the Lenders shall
have been given such access to the management, records, books of account,
contracts and properties of the Company and its Subsidiaries as they shall have
reasonably requested.

 

(d) All governmental and third party consents and approvals necessary in
connection with the transactions contemplated hereby shall have been obtained
(without the imposition of any conditions that are not acceptable to the
Lenders) and shall remain in effect, all applicable waiting periods in
connection with the Acquisition shall have expired without any action being
taken by any competent authority, and no law or regulation shall be applicable
in the reasonable judgment of the Lenders, in each case that restrains, prevents
or imposes materially adverse conditions upon the transactions contemplated
hereby.

 

(e) The Company shall have notified each Lender and the Agent in writing as to
the proposed Effective Date.

 

(f) The Company shall have paid all accrued fees and expenses of the Agent and
the Lenders (including the accrued reasonable fees and expenses of counsel to
the Agent).

 

(g) On the Effective Date, the following statements shall be true and the Agent
shall have received for the account of each Lender a certificate signed by a
duly authorized officer of the Company, dated the Effective Date, stating that:

 

(i) The representations and warranties contained in Section 4.01 are correct on
and as of the Effective Date, and

 

(ii) No event has occurred and is continuing that constitutes a Default.

 

(h) The Agent shall have received on or before the Effective Date the following,
each dated such day, in form and substance satisfactory to the Agent and (except
for the Notes) in sufficient copies for each Lender:

 

(i) A guaranty in substantially the form of Exhibit F hereto (together with each
other guaranty and guaranty supplement delivered pursuant to Section 5.01(i), in
each case as amended, the “Subsidiary Guaranty”), duly executed by each
Subsidiary Guarantor.

 

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(ii) The Notes to the Lenders to the extent requested by any Lender pursuant to
Section 2.16.

 

(iii) Certified copies of the resolutions of the Board of Directors of each Loan
Party approving each Loan Document to which it is a party, and of all documents
evidencing other necessary corporate action and governmental approvals, if any,
with respect to each Loan Document to which it is a party.

 

(iv) Copies of the unaudited pro forma Consolidated balance sheet of the Company
and its Subsidiaries as at December 31, 2003, and the related pro forma
Consolidated statements of income and cash flows of the Company and its
Subsidiaries for the fiscal year then ended, giving effect to the Acquisition as
of January 1, 2003.

 

(v) A certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying the names and true signatures of the officers of such Loan Party
authorized to sign each Loan Document to which it is a party and the other
documents to be delivered hereunder.

 

(vi) A favorable opinion of the Vice President and General Counsel of the
Company, substantially in the form of Exhibit D hereto.

 

(vii) A favorable opinion of Shearman & Sterling LLP, counsel for the Agent, in
form and substance satisfactory to the Agent.

 

(i) The Company shall have received not less than $425,000,000 in Net Cash
Proceeds from the sale of the common equity of the Company.

 

(j) The Company shall have received not less than $1,000,000,000 in Net Cash
Proceeds from the issuance of senior notes in the public debt markets.

 

(k) The Company’s Public Debt Rating shall be not lower than BB+ (stable) from
S&P and not lower than Baa3 (stable) from Moody’s.

 

(l) The Company shall have terminated the commitments of the lenders and paid in
full all Debt outstanding under (i) the $350,000,000 Five Year Credit Agreement
dated as of July 17, 2001, as amended, among the Borrower, the lenders parties
thereto and Citibank, N.A, as administrative agent and (ii) the $2,450,000,000
Credit Agreement dated as of May 28, 2004. By execution of this Agreement, each
of the Lenders that is a lender under either such credit agreement referred to
above hereby waives any requirement set forth in such credit agreement of prior
notice relating to the termination of their commitments thereunder.

 

SECTION 3.02. Conditions Precedent to the Initial Borrowing of Each Designated
Subsidiary. The obligation of each Lender to make an initial Advance to each
Designated Subsidiary following its designation as a Borrower hereunder pursuant
to Section 9.12 on the occasion of the initial Borrowing thereby is subject to
the Agent’s receipt on or before the date of such initial Borrowing of each of
the following, in form and substance satisfactory to the Agent and dated such
date:

 

(a) The Designation Letter of such Designated Subsidiary, in substantially the
form of Exhibit E hereto.

 

(b) The Note of such Designated Subsidiary to the Lenders to the extent
requested by any Lender pursuant to Section 2.15.

 

(c) A certificate of the Secretary or an Assistant Secretary (or person
performing similar functions) of such Designated Subsidiary certifying (i)
appropriate resolutions of the board of directors (or

 

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persons performing similar functions) of such Designated Subsidiary approving
this Agreement and its Notes, and all documents evidencing other necessary
corporate (or equivalent) action and governmental approvals, if any, with
respect to this Agreement and its Notes (copies of which shall be attached
thereto) and (ii) the names and true signatures of the officers of such
Designated Subsidiary authorized to sign the Designation Letter of such
Designated Subsidiary and its Notes and the other documents to be delivered by
such Designated Subsidiary hereunder.

 

(d) A copy of a certificate of the Secretary of State (or other appropriate
Governmental Authority) of the jurisdiction of organization of such Designated
Subsidiary, dated reasonably near the date of such Borrowing, certifying that
such Designated Subsidiary is duly organized and in good standing (or the
equivalent thereof) under the laws of the jurisdiction of its organization.

 

(e) A certificate signed by a duly authorized officer of such Designated
Subsidiary, dated as of the date of such Borrowing, certifying that such
Designated Subsidiary has obtained all authorizations, consents, approvals
(including, without limitation, exchange control approvals) and licenses of any
Governmental Authority or other third party necessary for such Designated
Subsidiary to execute and deliver its Designation Letter and its Notes and to
perform its obligations under this Agreement or any of its Notes.

 

(f) Such other documents, opinions and other information as any Lender, through
the Agent, may reasonably request.

 

SECTION 3.03. Conditions Precedent to Each Borrowing and Issuance. The
obligation of each Appropriate Lender to make an Advance on the occasion of each
Borrowing and the obligations of each Issuing Bank to issue a Letter of Credit
shall be subject to the conditions precedent that the Effective Date shall have
occurred and on the date of such Borrowing or such issuance (a) the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing, Notice of Issuance and the acceptance by such Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by
such Borrower that on the date of such Borrowing or such issuance such
statements are true):

 

(i) the representations and warranties contained in Section 4.01 (except, in the
case of Borrowings made after the initial Borrowing and in the case of the
issuance of Letters of Credit, the representations set forth in the last
sentence of subsection (e) thereof) (and, if such Borrowing shall have been
requested by a Designated Subsidiary, the representations and warranties of such
Designated Subsidiary contained in its Designation Letter) are correct on and as
of such date, before and after giving effect to such Borrowing or such issuance
and to the application of the proceeds therefrom, as though made on and as of
such date except to the extent that such representations and warranties
expressly relate to an earlier specified date, and

 

(ii) no event has occurred and is continuing, or would result from such
Borrowing or such issuance or from the application of the proceeds therefrom,
that constitutes a Default;

 

and (b) the Agent shall have received such other approvals, opinions or
documents as any Appropriate Lender through the Agent may reasonably request.

 

SECTION 3.04. Determinations Under Section 3.01. For purposes of determining
compliance with the conditions specified in Section 3.01, each Lender shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to the Lenders unless an officer of the Agent
responsible for the transactions contemplated by this Agreement shall have
received notice from such Lender prior to the date that the Company, by notice
to the Lenders, designates as the proposed Effective Date, specifying its
objection thereto. The Agent shall promptly notify the Lenders of the occurrence
of the Effective Date.

 

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ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 4.01. Representations and Warranties of the Company. The Company
represents and warrants as follows:

 

(a) Each Loan Party is a Person duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation.

 

(b) The execution, delivery and performance by each Loan Party of each Loan
Document to which it is a party and to be delivered by it, and the consummation
of the transactions contemplated hereby, are within such Loan Party’s corporate
or other powers, have been duly authorized by all necessary corporate or other
action, and do not contravene (i) such Loan Party’s charter or code of
regulations or comparable organizational documents or (ii) any applicable law or
any contractual restriction in any material contract or, to the knowledge of the
chief financial officer of the Company, any other contract the breach of which
would limit the ability of any Loan Party to perform its obligations under any
Loan Document, binding on or affecting any Loan Party.

 

(c) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third party is
required for the due execution, delivery and performance by any Loan Party of
any Loan Document to which it is a party and to be delivered by it or for the
consummation of the transactions contemplated hereby, other than authorizations,
approvals, actions, notices or filings (i) that have been duly obtained, taken,
given or made and are in full force and effect or (ii) as to which the failure
to obtain, take, give or make would not reasonably be likely to result in a
Material Adverse Effect.

 

(d) This Agreement has been, and each of the other Loan Documents to be
delivered by it when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and the other
Loan Documents when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party party thereto enforceable against such Loan Party
in accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors’
rights and by equitable principles (regardless of whether enforcement is sought
in equity or law).

 

(e) The Consolidated balance sheet of the Company and its Subsidiaries as at
December 31, 2003, and the related Consolidated statements of income and cash
flows of the Company and its Subsidiaries for the fiscal year then ended,
accompanied by an opinion of Deloitte & Touche LLP, independent public
accountants, and the Consolidated balance sheet of the Company and its
Subsidiaries as at March 31, 2004, and the related Consolidated statements of
income and cash flows of the Company and its Subsidiaries for the three months
then ended, duly certified by the chief financial officer of the Company, copies
of which have been furnished to each Lender, fairly present, subject, in the
case of said balance sheet as at March 31, 2004, and said statements of income
and cash flows for the three months then ended, to year-end audit adjustments,
the Consolidated financial condition of the Company and its Subsidiaries as at
such dates and the Consolidated results of the operations of the Company and its
Subsidiaries for the periods ended on such dates, all in accordance with GAAP
consistently applied. Since December 31, 2003, there has been no Material
Adverse Change.

 

(f) The unaudited Consolidated and consolidating pro forma balance sheets of the
Company and its Subsidiaries as at December 31, 2003, and the related unaudited
Consolidated and consolidating pro forma statements of income and cash flows of
the Company and its Subsidiaries for the year then ended, certified by the Chief
Financial Officer of the Company, copies of which have been furnished to each
Lender, fairly present, to the Chief Financial Officer’s best knowledge, the
Consolidated and consolidating pro forma financial condition of the Company and
its Subsidiaries as at such date and the Consolidated and consolidating pro
forma results of operations of the Company and its Subsidiaries for the period
ended on such date, in each case giving effect to the Acquisition as of January
1, 2003, all in accordance with GAAP.

 

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(g) There is no pending or, to the Company’s knowledge, threatened action, suit,
investigation, litigation or proceeding, including, without limitation, any
Environmental Action, affecting the Company or any of its Subsidiaries before
any court, governmental agency or arbitrator that (i) would be reasonably likely
to have a Material Adverse Effect (other than the Disclosed Litigation) or (ii)
purports to affect the legality, validity or enforceability of this Agreement or
any other Loan Document or the consummation of the transactions contemplated
hereby, and there has been no adverse change in the status, or financial effect
on the Company or any of its Subsidiaries, of the Disclosed Litigation from that
described on Schedule 3.01(b) hereto.

 

(h) The Information Memorandum and any other information, exhibit or report that
has been or will hereafter be furnished by or on behalf of the Company or any
other Loan Party to the Agent or any Lender in connection with the negotiation
and syndication of this Agreement or pursuant to the terms of this Agreement is
and will be when furnished, taken as a whole, complete and correct in all
material respects and does not and will not, when furnished, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading in light of the
circumstances under which such statements were or are made.

 

(i) The Company is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.

 

(j) No Loan Party is an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.

 

(k) The Company is, individually and together with its Subsidiaries, Solvent.
“Solvent” means, with respect to any Person on a particular date, that on such
date (i) the fair value of the property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent liabilities, of
such Person, (ii) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (iii) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as
they mature and (iv) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such Person’s
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.

 

ARTICLE V

 

COVENANTS OF THE BORROWERS

 

SECTION 5.01. Affirmative Covenants. So long as any Advance shall remain unpaid,
any Letter of Credit shall remain outstanding or any Lender shall have any
Commitment hereunder, each Borrower will:

 

(a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to
comply, in all material respects, with all applicable laws, rules, regulations
and orders, such compliance to include, without limitation, compliance with
ERISA and Environmental Laws.

 

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(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries
to pay and discharge, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
property and (ii) all lawful claims that, if unpaid, might by law become a Lien
upon its property; provided, however, that neither such Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings.

 

(c) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which such Borrower or such Subsidiary operates; provided,
however, that such Borrower and its Subsidiaries may self-insure to the same
extent as other companies engaged in similar businesses and owning similar
properties and to the extent consistent with prudent business practice.

 

(d) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its corporate existence,
rights (charter and statutory) and franchises; provided, however, that such
Borrower and its Subsidiaries may consummate any merger or consolidation
permitted under Section 5.02(b) and provided further that neither such Borrower
nor any of its Subsidiaries shall be required to preserve any right or franchise
if the Board of Directors (or equivalent governing body) of such Borrower or
such Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the business of such Borrower or such Subsidiary, as
the case may be, and that the loss thereof is not disadvantageous in any
material respect to such Borrower, such Subsidiary or the Lenders.

 

(e) Visitation Rights. At any reasonable time and from time to time, upon
reasonable notice and during normal business hours, permit the Agent or any of
the Lenders or any agents or representatives thereof, to examine and make copies
of and abstracts from the records and books of account of, and visit the
properties of, such Borrower and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of such Borrower and any of its Subsidiaries with
any of their officers or directors and with their independent certified public
accountants.

 

(f) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper
books of record and account, in which full and correct entries shall be made of
all financial transactions and the assets and business of such Borrower and each
such Subsidiary in accordance with GAAP in effect from time to time.

 

(g) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are used or
useful in the conduct of its business in good working order and condition,
ordinary wear and tear excepted.

 

(h) Reporting Requirements. Furnish to the Lenders:

 

(i) as soon as available and in any event within 45 days after the end of each
of the first three quarters of each fiscal year of the Company, the Consolidated
balance sheet of the Company and its Subsidiaries as of the end of such quarter
and Consolidated statements of income and cash flows of the Company and its
Subsidiaries for the period commencing at the end of the previous fiscal year
and ending with the end of such quarter, duly certified (subject to year-end
audit adjustments) by the chief financial officer of the Company as having been
prepared in accordance with GAAP and certificates of the chief financial officer
of the Company as to compliance with the terms of this Agreement and setting
forth in reasonable detail the calculations necessary to demonstrate compliance
with Section 5.03;

 

(ii) as soon as available and in any event within 90 days after the end of each
fiscal year of the Company, a copy of the annual report for such year for the
Company and its

 

30

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Subsidiaries, containing the Consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal year and Consolidated statements of
income and cash flows of the Company and its Subsidiaries for such fiscal year,
in each case accompanied by an opinion acceptable to the Required Lenders by
Deloitte & Touche LLP or other independent public accountants reasonably
acceptable to the Required Lenders. There shall also be provided, in reasonable
detail, the calculations necessary to demonstrate compliance with Section 5.03;

 

(iii) as soon as possible and in any event within five days after a responsible
officer of the Company knows or should have known of the occurrence of each
Default continuing on the date of such statement, a statement of the chief
financial officer of the Company setting forth details of such Default and the
action that the Company has taken and/or proposes to take with respect thereto;

 

(iv) promptly after the sending or filing thereof, copies of all reports that
the Company sends to any of its security holders, and copies of all reports and
registration statements that the Company or any Subsidiary files with the
Securities and Exchange Commission or any national securities exchange;

 

(v) promptly after the commencement thereof, notice of all actions and
proceedings before any court, governmental agency or arbitrator affecting the
Company or any of its Subsidiaries of the type described in Section 4.01(g); and

 

(vi) such other information respecting the Company or any of its Subsidiaries as
any Lender through the Agent may from time to time reasonably request.

 

(i) New Domestic Subsidiaries. Promptly and in any event within 30 days
following the formation or acquisition of a Material Domestic Subsidiary, or the
occurrence of any event by which any Domestic Subsidiary becomes a Material
Domestic Subsidiary, in each case that is not at such time a Subsidiary
Guarantor, cause such Subsidiary to execute and deliver a Guaranty Supplement
(as defined in the Subsidiary Guaranty), together with the documents set forth
in clause 3.01(h)(iii), (iv) and (v).

 

(j) Pari Passu Status. Ensure, and cause each of its Designated Subsidiaries to
ensure, that the Debt outstanding under this Agreement and the Notes ranks at
least pari passu with all other senior unsecured Debt of the Company or such
Designated Subsidiary, as the case may be.

 

(k) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise permitted under this Agreement with any of
their Affiliates on terms that are fair and reasonable and no less favorable to
the Company or such Subsidiary than it would obtain in a comparable arm’s-length
transaction with a Person not an Affiliate.

 

SECTION 5.02. Negative Covenants. So long as any Advance shall remain unpaid,
any Letter of Credit shall remain outstanding or any Lender shall have any
Commitment hereunder, no Borrower will:

 

(a) Liens, Etc. Create or suffer to exist, or permit any of its Subsidiaries to
create or suffer to exist, any Lien on or with respect to any of its properties,
whether now owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any right to receive income, other than:

 

(i) Liens existing on the Effective Date and described on Schedule 5.02(a)
hereto,

 

(ii) purchase money Liens upon or in any real property or equipment acquired or
held by the Company or any Subsidiary in the ordinary course of business
(including any Lien in respect of a capitalized lease of personal property) to
secure the purchase price of such property or equipment or to secure Debt
incurred solely for the purpose of financing the acquisition or lease of such
property or equipment, or Liens existing on such property or equipment at the
time of its

 

31

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acquisition (other than any such Liens created in contemplation of such
acquisition that were not incurred to finance the acquisition of such property)
or extensions, renewals or replacements of any of the foregoing for the same or
a lesser amount, provided, however, that no such Lien shall extend to or cover
any properties of any character other than the real property or equipment being
acquired or leased, and no such extension, renewal or replacement shall extend
to or cover any properties not theretofore subject to the Lien being extended,
renewed or replaced,

 

(iii) Liens asserted by warehousemen, mechanics or materialmen which Liens are
being contested in good faith by appropriate proceedings diligently conducted
and for which reserves in accordance with GAAP are being maintained on the books
of the Company and any mechanic’s, carrier’s, landlord’s or similar common law
or statutory lien incurred in the normal course of business which has not been
docketed as a judgment,

 

(iv) Liens or levies for taxes, fees, assessments or governmental charges not
yet due and payable or being contested in good faith by appropriate proceedings
diligently conducted and Liens resulting from or incurred with respect to legal
proceedings which are being contested in good faith by appropriate proceedings
diligently conducted; provided that reserves in accordance with GAAP are being
maintained on the books of the Company with respect to such taxes, fees,
assessments, governmental charges and legal proceedings,

 

(v) Liens securing only workers’ compensation, unemployment insurance or similar
obligations and/or deposits or pledges made in connection with, or to secure
payment of, utilities or similar services, leases, workers’ compensation,
unemployment insurance, old age pensions or other social security obligations,

 

(vi) Encumbrances as set forth in all deeds, title insurance and mortgages
existing as of the Effective Date in respect of all real property owned or
leased by the Company or any of its Subsidiaries and any other zoning or deed
restrictions, public utility easements, minor title irregularities and similar
matters having no material adverse effect as a practical matter on the ownership
or use of any of the real property in question,

 

(vii) Liens securing or given in lieu of surety, stay, appeal or performance
bonds (other than contracts for the payment of indebtedness for borrowed money),
or deposits required by law or governmental regulations or by any court order,
decree, judgment or rule or as a condition to the transaction of business or the
exercise of any right, privilege or license, or Liens arising from a judgment
not constituting an Event of Default,

 

(viii) Interest or title of a lessor under a lease,

 

(ix) Liens in favor of the Agent or a Lender, if any, to secure the obligations
of the Loan Parties under the Loan Documents,

 

(x) Liens created or assumed in purchasing, constructing or improving any real
property or to which any real property is subject when purchased; provided,
however, that: (x) the mortgage, security interest or other lien is confined to
the property in question, and (y) the indebtedness secured thereby is
non-recourse as to any Loan Party and does not exceed the total cost of the
purchase, construction or improvement,

 

(xi) Any transfer of a check or other medium of payment for deposit or
collection, or any similar transaction in the normal course of business,

 

(xii) Any financing statement perfecting a security interest that would be
permissible under this Section 5.02(a),

 

32

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(xiii) Liens on property of a Person existing at the time such Person is merged
into or consolidated with the Company or any Subsidiary of the Company or
becomes a Subsidiary of the Company; provided that such Liens were not created
in contemplation of such merger, consolidation or acquisition and do not extend
to any assets other than those of the Person so merged into or consolidated with
the Company or such Subsidiary or acquired by the Company or such Subsidiary,

 

(xiv) other Liens securing Debt in an aggregate principal amount not to exceed
at any time outstanding 2% of Consolidated Tangible Net Assets at the time such
Lien is incurred,

 

(xv) the replacement, extension or renewal of any Lien permitted by clause (i),
(ii), (viii), (ix) or (xii) above upon or in the same property theretofore
subject thereto or the replacement, extension or renewal (without increase in
the amount or change in any direct or contingent obligor) of the Debt secured
thereby, and

 

(xvi) Liens on receivables (and related assets) in connection with Permitted
Receivables Financings, so long as such Liens extend solely to the receivables
(and related assets) being securitized thereunder.

 

(b) Mergers, Acquisitions, Etc. Merge with or into or consolidate with any other
Person; liquidate, wind up, dissolve or divide; acquire all or substantially all
of the properties or assets of any ongoing concern or ongoing line of business;
acquire all or substantially all of the capital stock or other equity interests
in or of any other Person other than in the ordinary course of business; or
agree, become or remain liable (contingently or otherwise) to do any of the
foregoing, or permit any of its Subsidiaries to do any of the foregoing, except:

 

(i) the Company or any Subsidiary of the Company may acquire all or
substantially all of the properties or assets of any other Person, acquire all
or substantially all of the capital stock or other equity interests in or of any
other Person, or become or remain liable (contingently or otherwise) to do any
of the foregoing,

 

(ii) a directly or indirectly wholly owned Domestic Subsidiary of the Company
(or any Subsidiary of such Subsidiary) may merge with or into or consolidate
with or into any other wholly owned Domestic Subsidiary of the Company (or any
Subsidiary of such Subsidiary),

 

(iii) a directly or indirectly wholly owned Subsidiary of the Company that is
not a Subsidiary Guarantor (or any Subsidiary of such Subsidiary) may merge with
or into or consolidate with or into any other wholly owned Subsidiary of the
Company (or any Subsidiary of such Subsidiary), and

 

(iv) a directly or indirectly wholly owned Subsidiary of the Company (or any
Subsidiary of such Subsidiary) may merge with the Company, provided that the
Company shall be the surviving corporation, and

 

provided further, in the case of each transaction permitted in clauses (i), (ii)
and (iii), that no Default shall have occurred and be continuing at the time of
such proposed transaction or would result therefrom.

 

(c) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of, or
permit any of its Subsidiaries to sell, lease, transfer or otherwise dispose of,
any assets, or grant any option or other right to purchase, lease or otherwise
acquire any assets, except (i) sales of inventory in the ordinary course of its
business, (ii) sales, transfers or other dispositions of obsolete or worn-out
tools, equipment or other property (including leasehold interests) no longer
used or useful in business and sales of intellectual property determined to be
uneconomical, negligible or obsolete, (iii) sales, leases, transfers and other
dispositions of assets (other than Foreign Assets) by (w) the Company to any
Subsidiary Guarantor, (x) any

 

33

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Subsidiary Guarantor to any other Subsidiary Guarantor (y) by any Subsidiary of
the Company to the Company or (z) any Subsidiary of the Company that is not a
Subsidiary Guarantor to any other Subsidiary of the Company, (iv) sales, leases,
transfers and other dispositions of Foreign Assets by the Company or any of its
Subsidiaries to the Company or any of its Subsidiaries, (v) in addition to the
sales permitted in clauses (i), (ii), (iii) and (iv) above, sales of assets for
fair value, provided that in the case of the sale of any asset pursuant to this
clause (v) in a single transaction or a series of related transactions in an
aggregate amount exceeding $20,000,000, the fair value of such asset shall have
been determined in good faith by the Board of Directors of the Company,
provided, further, that in the case of sales of assets pursuant to this clause
(v) having consideration of $100,000,000 or more individually or $250,000,000 or
more in the aggregate, the Borrowers shall, on the date of receipt by any
Borrower or any of its Subsidiaries of the Net Cash Proceeds from such sale,
prepay the Advances pursuant to, and in the amount and order of priority set
forth in, Section 2.10(b), as specified therein, and (vi) sales or transfers of
receivables (and related assets) in connection with Permitted Receivables
Financings.

 

(d) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:

 

(i) Investments by the Company and its Subsidiaries in (A) their Subsidiaries
outstanding on the date hereof, (B) Subsidiaries of the Company as required or
is reasonably desirable to comply with thin capitalization rules in
jurisdictions outside the United States, (C) wholly owned Subsidiaries (other
than pursuant to clauses (B) or (D)) in an additional aggregate amount invested
from the date hereof not to exceed $50,000,000 and (D) Subsidiary Guarantors;

 

(ii) Investments by the Company and its Subsidiaries made as capital
contributions to any of its direct or indirect Subsidiaries for the purpose of
repaying, prepaying or otherwise retiring Debt of the Target or its direct or
indirect Subsidiaries existing at the date of the Acquisition or restructuring
Subsidiaries of the Company in connection with the Acquisition;

 

(iii) Investment by Subsidiaries that are not Subsidiary Guarantors in any other
Subsidiaries of the Company;

 

(iv) loans and advances to employees in the ordinary course of the business of
the Company and its Subsidiaries as presently conducted in an aggregate
principal amount not to exceed $5,000,000 at any time outstanding;

 

(v) Investments in Marketable Securities;

 

(vi) Investments made by the Company or its Subsidiaries in joint ventures as
required by the applicable joint venture agreement in effect as of the date
hereof and additional Investments in joint ventures in an aggregate amount not
to exceed $20,000,000 at any time outstanding;

 

(vii) Investments consisting of intercompany Debt owed to the Company or to a
direct or indirect wholly owned Subsidiary of the Company;

 

(viii) any endorsement of a check or other medium of payment for deposit or
collection, or any similar transaction in the ordinary course of business;

 

(ix) the Company and its Subsidiaries may acquire and hold receivables and
similar items owing to them in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;

 

(x) the Guaranteed Obligations and obligations under the Subsidiary Guaranty;

 

34

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(xi) the Company and its Subsidiaries may acquire and own Investments (including
debt obligations) received in connection with the bankruptcy or reorganization
of customers and suppliers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of
business;

 

(xii) Investments by Subsidiaries of the Company organized outside of the United
States in the following (or the equivalent thereof in the applicable foreign
jurisdiction): (A) time deposits maturing within one year from the date of
purchase thereof, including certificates of deposit issued by any bank or trust
company organized outside of the United States that has total assets aggregating
at least $200,000,000 or the equivalent in a foreign currency, (B) fully
collateralized repurchase agreements having a term of not more than 30 days and
covering securities described in subsection (A) above entered into with any bank
or trust company described in subsection (A) above, or (C) investments in money
market funds substantially all of the assets of which are comprised of
securities described in (A) and (B) above;

 

(xiii) loans and advances to customers and vendors in the ordinary course of
business of the Company and its Subsidiaries as presently conducted in an
aggregate principal amount not to exceed $15,000,000 at any time outstanding;

 

(xiv) Investments made by the Company or its Subsidiaries in Subsidiaries of the
Company made as capital contributions of Foreign Assets; and

 

(xv) other Investments in an aggregate amount invested not to exceed
$100,000,000.

 

(e) Payment Restrictions Affecting Subsidiaries. Directly or indirectly, enter
into or suffer to exist, or permit any of its Subsidiaries to enter into or
suffer to exist, any agreement or arrangement limiting the ability of any of its
or their Subsidiaries to declare or pay dividends or other distributions in
respect of its equity interests or repay or prepay any Debt owed to, make loans
or advances to, or otherwise transfer assets to or invest in, the Company or any
Subsidiary of the Company (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or otherwise),
except (i) any agreement or instrument evidencing Debt existing on the date
hereof and (ii) any agreement in effect at the time such Subsidiary becomes a
Subsidiary of the Company, so long as such agreement was not entered into solely
in contemplation of such Person becoming a Subsidiary of the Company.

 

(f) Accounting Changes. Make or permit, or permit any of its Subsidiaries to
make or permit, any change in accounting policies or reporting practices, except
as required or permitted by GAAP.

 

(g) Change in Nature of Business. Make, or permit any of its Subsidiaries to
make, any material change in the nature of the business of the Company and its
Subsidiaries considered as a whole as carried on at the date hereof.

 

SECTION 5.03. Financial Covenants. So long as any Advance shall remain unpaid,
any Letter of Credit shall remain outstanding or any Lender shall have any
Commitment hereunder, the Company will:

 

(a) Debt/EBITDA Ratio. Maintain a ratio of Consolidated Debt to Consolidated
EBITDA for the period of twelve months most recently ended on or prior to the
last day of each fiscal quarter set forth below of not greater than the ratio
set forth opposite such fiscal quarter end below:

 

Fiscal Quarter Ending

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

 

Ratio

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

September 30, 2004

  4.75 to 1

December 31, 2004

  4.50 to 1

March 31, 2005

  4.25 to 1

June 30, 2005

  4.25 to 1

September 30, 2005

  4.00 to 1

December 31, 2005

  3.75 to 1

Each fiscal quarter end after December 31, 2005

  3.50 to 1

 

35

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(b) Interest Coverage Ratio. Maintain a ratio of Consolidated EBITDA for the
period of four quarters most recently ended to cash interest payable on, and
amortization of debt discount in respect of, all Debt (other than Debt of the
Target outstanding at the date of the Acquisition) during such period, by the
Company and its Subsidiaries of not less than 3.50 : 1.00.

 

ARTICLE VI

 

EVENTS OF DEFAULT

 

SECTION 6.01. Events of Default. If any of the following events (“Events of
Default”) shall occur and be continuing:

 

(a) Any Borrower shall fail to pay any principal of any Advance when the same
becomes due and payable; or any Borrower shall fail to pay any interest on any
Advance or make any other payment of fees or other amounts payable under this
Agreement or any Note within four Business Days after the same becomes due and
payable; or

 

(b) Any representation or warranty made by any Borrower herein or by any
Borrower (or any of its corporate officers) in connection with this Agreement
shall prove to have been incorrect in any material respect when made; or

 

(c) (i) The Borrowers shall fail to perform or observe any term, covenant or
agreement contained in Section 5.01(d), (e) or (h), 5.02 or 5.03, or (ii) the
Borrowers shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement on its part to be performed or observed if such
failure shall remain unremedied for 15 days after written notice thereof shall
have been given to the Company by the Agent or any Lender; or

 

(d) The Company or any of its Subsidiaries shall fail to pay any principal of or
premium or interest on any Debt that is outstanding in a principal amount of at
least $25,000,000 in the aggregate at any one time (but excluding Debt
outstanding hereunder) of the Company or such Subsidiary (as the case may be),
when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior to the stated
maturity thereof; or

 

36

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(e) The Company or any of its Subsidiaries shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Company or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or unstayed for a period of 60
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Company or any of its
Subsidiaries shall take any corporate action to authorize any of the actions set
forth above in this subsection (e); or

 

(f) Judgments or orders for the payment of money in excess of $25,000,000 in the
aggregate shall be rendered against the Company or any of its Subsidiaries and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; provided, however, that
any such judgment or order shall not be an Event of Default under this Section
6.01(f) if and for so long as (i) the amount of such judgment or order is
covered by a valid and binding policy of insurance between the defendant and the
insurer covering payment thereof and (ii) such insurer, which shall be rated at
least “A” by A.M. Best Company, has been notified of, and has not disputed the
claim made for payment of, the amount of such judgment or order; or

 

(g) (i) Any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Stock of the Company (or other securities convertible into
such Voting Stock) representing 20% or more of the combined voting power of all
Voting Stock of the Company; or (ii) during any period of up to 24 consecutive
months, commencing before or after the date of this Agreement, individuals who
at the beginning of such 24-month period were directors of the Company shall
cease for any reason to constitute a majority of the board of directors of the
Company; or

 

(h) The Company or any of its ERISA Affiliates shall incur, or, in the
reasonable opinion of the Required Lenders, shall be reasonably likely to incur
liability in excess of $25,000,000 in the aggregate as a result of one or more
of the following: (i) the occurrence of any ERISA Event; (ii) the partial or
complete withdrawal of the Company or any of its ERISA Affiliates from a
Multiemployer Plan; or (iii) the reorganization or termination of a
Multiemployer Plan; or

 

(i) The Subsidiary Guaranty shall for any reason cease to be valid and binding
on or enforceable against each Subsidiary Guarantor (other than by reason of a
release of a Subsidiary Guarantor in accordance with the terms of the Subsidiary
Guaranty), or any Subsidiary Guarantor shall so state in writing;

 

then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers, terminate the
Commitments (other than the Commitments to make Advances by an Issuing Bank or a
Lender pursuant to Section 2.03(c)), and thereupon the Commitments shall
forthwith terminate, and (ii) shall at the request, or may with the consent, of
the Required Lenders, by notice to the Borrowers, declare the Advances, all
interest thereon and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Advances, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by

 

37

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each Borrower; provided, however, that in the event of an actual or deemed entry
of an order for relief with respect to any Borrower under the Federal Bankruptcy
Code, (A) the obligation of each Lender to make Advances shall automatically be
terminated (other than the Commitments to make Advances by an Issuing Bank or a
Lender pursuant to Section 2.03(c)) and (B) the Advances, all such interest and
all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by each Borrower.

 

SECTION 6.02. Actions in Respect of the Letters of Credit upon Default. If any
Event of Default shall have occurred and be continuing, the Agent may with the
consent, or shall at the request, of the Revolving Credit Lenders having at
least a majority in interest of the Revolving Credit Commitments, irrespective
of whether it is taking any of the actions described in Section 6.01 or
otherwise, make demand upon the Borrowers to, and forthwith upon such demand the
Borrowers will, (a) pay to the Agent on behalf of the Revolving Credit Lenders
in same day funds at the Agent’s office designated in such demand, for deposit
in the L/C Cash Collateral Account, an amount equal to the aggregate Available
Amount of all Letters of Credit then outstanding or (b) make such other
arrangements in respect of the outstanding Letters of Credit as shall be
acceptable to the Revolving Credit Lenders having at least a majority in
interest of the Revolving Credit Commitments. If at any time the Agent
determines that any funds held in the L/C Cash Collateral Account are subject to
any right or claim of any Person other than the Agent and the Revolving Credit
Lenders or that the total amount of such funds is less than the aggregate
Available Amount of all Letters of Credit, the Borrowers will, forthwith upon
demand by the Agent, pay to the Agent, as additional funds to be deposited and
held in the L/C Cash Collateral Account, an amount equal to the excess of (a)
such aggregate Available Amount over (b) the total amount of funds, if any, then
held in the L/C Cash Collateral Account that the Agent determines to be free and
clear of any such right and claim. Upon the drawing of any Letter of Credit, to
the extent funds are on deposit in the L/C Cash Collateral Account, such funds
shall be applied to reimburse the Issuing Banks to the extent permitted by
applicable law. After (i) no Event of Default shall be continuing or (ii) all
such Letters of Credit shall have expired or been fully drawn upon and all other
obligations of the Borrowers hereunder and under the Notes shall have been paid
in full, the balance, if any, in such L/C Cash Collateral Account shall be
returned to the Borrowers.

 

ARTICLE VII

 

GUARANTY

 

SECTION 7.01. Guaranty. The Company hereby absolutely, unconditionally and
irrevocably guarantees the punctual payment when due, whether at scheduled
maturity or on any date of a required prepayment or by acceleration, demand or
otherwise, of all obligations of each other Borrower now or hereafter existing
under or in respect of this Agreement and the Notes of such Borrower (including,
without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing obligations), whether direct or
indirect, absolute or contingent, and whether for principal, interest, premiums,
fees, indemnities, contract causes of action, costs, expenses or otherwise (such
obligations being the “Guaranteed Obligations”), and agrees to pay any and all
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Agent or any Lender in enforcing any rights under this
Guaranty. Without limiting the generality of the foregoing, the Company’s
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by any other Borrower to the Agent or any Lender
under or in respect of this Agreement and its Notes but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Borrower.
Notwithstanding any other provisions of this Agreement, stock of a foreign
entity directly held by the Company shall not serve as security for the
Guaranteed Obligations, other than stock of any such foreign entity representing
no more than 65% of the total combined voting power of all classes of stock of
such entity entitled to vote.

 

SECTION 7.02. Guaranty Absolute. The Company guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of this Agreement
and the applicable Notes, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or any Lender with respect thereto. The obligations of the
Company under or in respect of this Guaranty are independent of the Guaranteed
Obligations or any other obligations of any other Borrower under or in respect
of this Agreement and the Notes, and a separate action or actions may be brought
and prosecuted against the Company to enforce this Guaranty, irrespective of
whether any action is brought against any other Borrower or whether any other

 

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Borrower is joined in any such action or actions. The liability of the Company
under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and to the extent not prohibited by applicable law, the Company
hereby irrevocably waives any defenses it may now have or hereafter acquire in
any way relating to, any or all of the following:

 

(a) any lack of validity or enforceability of this Agreement, any Note or any
agreement or instrument relating thereto;

 

(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations or any other obligations of any
other Borrower under or in respect of this Agreement, and Notes, or any other
amendment or waiver of or any consent to departure from this Agreement or any
Note, including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Borrower or any of its
Subsidiaries or otherwise;

 

(c) any taking, exchange, release or amendment or waiver of, or consent to
departure from, any other guaranty, for all or any of the Guaranteed
Obligations;

 

(d) any manner of application of collateral, if any, or proceeds thereof, to all
or any of the Guaranteed Obligations, or any manner of sale or other disposition
of any collateral for all or any of the Guaranteed Obligations or any other
obligations of any Borrower under this Agreement or the Notes or any other
assets of any Borrower or any of its Subsidiaries;

 

(e) any change, restructuring or termination of the corporate structure or
existence of any Borrower or any of its Subsidiaries;

 

(f) any failure of the Agent or any Lender to disclose to any Borrower any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Borrower now or
hereafter known to the Agent or such Lender (the Company waiving any duty on the
part of the Agent and the Lenders to disclose such information);

 

(g) the release or reduction of liability of any other guarantor or surety with
respect to the Guaranteed Obligations; or

 

(h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by the Agent
or any Lender that might otherwise constitute a defense available to, or a
discharge of, any Borrower or any other guarantor or surety.

 

This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender or any other Person
upon the insolvency, bankruptcy or reorganization of any other Borrower or
otherwise, all as though such payment had not been made.

 

SECTION 7.03. Waivers and Acknowledgments. (a) The Company hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Agent or any Lender protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Borrower or
any other Person or any collateral.

 

(b) The Company hereby unconditionally and irrevocably waives any right to
revoke this Guaranty and acknowledges that this Guaranty is continuing in nature
and applies to all Guaranteed Obligations, whether existing now or in the
future.

 

(c) The Company hereby unconditionally and irrevocably waives (i) any defense
arising by reason of any claim or defense based upon an election of remedies by
the Agent or any Lender that in any

 

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manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification rights
of the Company or other rights of the Company to proceed against any of the
other Borrowers, any other guarantor or any other Person or any collateral and
(ii) any defense based on any right of set-off or counterclaim against or in
respect of the obligations of the Company hereunder.

 

(d) The Company hereby unconditionally and irrevocably waives any duty on the
part of the Agent or any Lender to disclose to the Company any matter, fact or
thing relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Borrower or any of its
Subsidiaries now or hereafter known by the Agent or such Lender.

 

(e) The Company acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by this Agreement
and that the waivers set forth in Section 7.02 and this Section 7.03 are
knowingly made in contemplation of such benefits.

 

SECTION 7.04. Subrogation. The Company hereby unconditionally and irrevocably
agrees, so long as any Event of Default has occurred and is continuing, not to
exercise any rights that it may now have or hereafter acquire against any other
Borrower or any other insider guarantor that arise from the existence, payment,
performance or enforcement of the Company’s obligations under or in respect of
this Guaranty, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any Lender against any
Borrower or any other insider guarantor or any collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any
Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash and the Commitments shall have expired or been terminated.
If any amount shall be paid to the Company in violation of the immediately
preceding sentence at any time prior to the later of (a) the payment in full in
cash of the Guaranteed Obligations and all other amounts payable under this
Guaranty and (b) the Termination Date, such amount shall be received and held in
trust for the benefit of the Agent and the Lenders, shall be segregated from
other property and funds of the Company and shall forthwith be paid or delivered
to the Agent in the same form as so received (with any necessary endorsement or
assignment) to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of this Agreement, or to be held as collateral for any
Guaranteed Obligations or other amounts payable under this Guaranty thereafter
arising. If (i) the Company shall make payment to the Agent or any Lender of all
or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash and (iii) the Termination Date shall have occurred, the
Agent and the Lenders will, at the Company’s request and expense, execute and
deliver to the Company appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
the Company of an interest in the Guaranteed Obligations resulting from such
payment made by the Company pursuant to this Guaranty.

 

SECTION 7.05. Subordination. The Company hereby subordinates any and all debts,
liabilities and other obligations owed to the Company by each other Borrower
(the “Subordinated Obligations”) to the Guaranteed Obligations to the extent and
in the manner hereinafter set forth in this Section 7.05:

 

(a) Prohibited Payments, Etc. Except during the continuance of an Event of
Default (including the commencement and continuation of any proceeding under any
bankruptcy law relating to any other Borrower), the Company may receive
regularly scheduled payments from any other Borrower on account of the
Subordinated Obligations. After the occurrence and during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any bankruptcy law relating to any other Borrower), however, unless the
Required Lenders otherwise agree, the Company shall not demand, accept or take
any action to collect any payment on account of the Subordinated Obligations.

 

(b) Prior Payment of Guaranteed Obligations. In any proceeding under any
bankruptcy law relating to any other Borrower, the Company agrees that the Agent
and the Lenders shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing

 

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after the commencement of a proceeding under any bankruptcy law, whether or not
constituting an allowed claim in such proceeding (“Post Petition Interest”))
before the Company receives payment of any Subordinated Obligations.

 

(c) Turn-Over. After the occurrence and during the continuance of any Event of
Default (including the commencement and continuation of any proceeding under any
bankruptcy law relating to any other Borrower), the Company shall, if the Agent
so requests, collect, enforce and receive payments on account of the
Subordinated Obligations as trustee for the Agent and the Lenders and deliver
such payments to the Agent on account of the Guaranteed Obligations (including
all Post Petition Interest), together with any necessary endorsements or other
instruments of transfer, but without reducing or affecting in any manner the
liability of the Company under the other provisions of this Guaranty.

 

(d) Agent Authorization. After the occurrence and during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any bankruptcy law relating to any other Borrower), the Agent is
authorized and empowered (but without any obligation to so do), in its
discretion, (i) in the name of the Company, to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and to apply any amounts
received thereon to the Guaranteed Obligations (including any and all Post
Petition Interest), and (ii) to require the Company (A) to collect and enforce,
and to submit claims in respect of, Subordinated Obligations and (B) to pay any
amounts received on such obligations to the Agent for application to the
Guaranteed Obligations (including any and all Post Petition Interest).

 

SECTION 7.06. Continuing Guaranty; Assignments. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until the later of (i)
the payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty and (ii) the Termination Date, (b) be binding upon
the Company, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Agent and the Lenders and their successors, transferees and
assigns. Without limiting the generality of clause (c) of the immediately
preceding sentence, the Agent or any Lender may assign or otherwise transfer all
or any portion of its rights and obligations under this Agreement (including,
without limitation, all or any portion of its Commitments, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to the Agent or such Lender herein or otherwise, in each case as and to the
extent provided in Section 9.07. The Company shall not have the right to assign
its rights under this Article VII or any interest in this Article VII without
the prior written consent of the Agent and the Lenders.

 

ARTICLE VIII

 

THE AGENT

 

SECTION 8.01. Authorization and Action. Each Lender (in its capacity as a Lender
and an Issuing Bank, as applicable) hereby appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement
(including, without limitation, enforcement or collection of the Notes), the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding upon all Lenders and all holders
of Notes; provided, however, that the Agent shall not be required to take any
action that exposes the Agent to personal liability or that is contrary to this
Agreement or applicable law. The Agent agrees to give to each Lender prompt
notice of each notice given to it by any Borrower pursuant to the terms of this
Agreement.

 

SECTION 8.02. Agent’s Reliance, Etc. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with this Agreement, except for
its or their own gross negligence or willful misconduct. Without limitation of
the generality of the foregoing, the Agent: (i) may treat the Lender that made
any Advance as the holder of the Debt resulting therefrom until the Agent
receives and accepts an Assignment and Acceptance entered into by such Lender,
as

 

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assignor, and an Eligible Assignee, as assignee, as provided in Section 9.07;
(ii) may consult with legal counsel (including counsel for the Borrowers),
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; (iii) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement; (iv) shall not have any duty
to ascertain or to inquire as to the performance, observance or satisfaction of
any of the terms, covenants or conditions of this Agreement on the part of any
Borrower or the existence at any time of any Default or to inspect the property
(including the books and records) of any Borrower; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; and (vi) shall incur no liability under or
in respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier or telegram) believed by
it to be genuine and signed or sent by the proper party or parties.

 

SECTION 8.03. CNAI and Affiliates. With respect to its Commitments, the Advances
made by it and the Notes issued to it, CNAI shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not the Agent; and the term “Lender” or “Lenders” shall, unless
otherwise expressly indicated, include CNAI in its individual capacity. CNAI and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally engage
in any kind of business with, the Company, any of its Subsidiaries and any
Person who may do business with or own securities of the Company or any such
Subsidiary, all as if CNAI were not the Agent and without any duty to account
therefor to the Lenders. The Agent shall have no duty to disclose information
obtained or received by it or any of its affiliates relating to the Company or
its Subsidiaries to the extent such information was obtained or received in any
capacity other than as Agent.

 

SECTION 8.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements referred to in Section 4.01 and such other 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 Agent 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 this Agreement.

 

SECTION 8.05. Indemnification. (a) The Lenders agree to indemnify the Agent (to
the extent not reimbursed by the Borrowers), ratably according to the respective
principal amounts of the Advances then owed to each of them (or if no Advances
are at the time outstanding, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent under this Agreement
(collectively, the “Indemnified Costs”), provided that no Lender shall be liable
for any portion of the Indemnified Costs resulting from the Agent’s gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including reasonable counsel fees) incurred by
the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the Agent
is not reimbursed for such expenses by the Borrowers. In the case of any
investigation, litigation or proceeding giving rise to any Indemnified Costs,
this Section 8.05 applies whether any such investigation, litigation or
proceeding is brought by the Agent, any Lender or a third party. For purposes of
this Section 8.05(a), the Lenders’ respective pro rata shares of any amount
shall be determined, at any time, according to the sum of (i) the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lenders, (ii) their respective Ratable Shares of the aggregate
Available Amount of all Letters of Credit outstanding at such time, (iii) the
aggregate unused portions of their respective Term Commitments at such time and
(iv) their respective Unused Revolving Credit Commitments at such time.

 

(b) Each Revolving Credit Lender severally agrees to indemnify the Issuing Banks
(to the extent not promptly reimbursed by the Borrowers) from and against such
Lender’s Ratable Share of any and all

 

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liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against any such Issuing Bank in any way
relating to or arising out of this Agreement or any action taken or omitted by
such Issuing Bank hereunder or in connection herewith; provided, however, that
no Revolving Credit Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Issuing Bank’s gross negligence or
willful misconduct. Without limitation of the foregoing, each Revolving Credit
Lender agrees to reimburse any such Issuing Bank promptly upon demand for its
Ratable Share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrowers under Section 9.04, to the extent
that such Issuing Bank is not promptly reimbursed for such costs and expenses by
the Borrowers.

 

(c) The failure of any Lender to reimburse the Agent or the Issuing Bank
promptly upon demand for its ratable share of any amount required to be paid by
the Lenders to the Agent or the Issuing Bank as provided herein shall not
relieve any other Lender of its obligation hereunder to reimburse the Agent or
the Issuing Bank for its ratable share of such amount, but no Lender shall be
responsible for the failure of any other Lender to reimburse the Agent or an
Issuing Bank for such other Lender’s ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender hereunder, the
agreement and obligations of each Lender contained in this Section 8.05 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under the Notes.

 

SECTION 8.06. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Company and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent
with the consent of the Company, which consent shall not be unreasonably
withheld and shall not be required if any Event of Default has occurred and is
continuing. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent’s giving of notice of resignation or the Required Lenders’
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent’s resignation or removal hereunder as Agent,
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.

 

SECTION 8.07. Other Agents. Each Lender hereby acknowledges that neither the
documentation agent nor any other Lender designated as any “Agent” on the
signature pages hereof (other than the Agent) has any liability hereunder other
than in its capacity as a Lender.

 

ARTICLE IX

 

MISCELLANEOUS

 

SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by any Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by each affected Lender, do any of the following: (a) waive any of the
conditions specified in Section 3.01, (b) increase the Commitments of the
Lenders, (c) reduce the principal of, or interest on, the Advances or any fees
or other amounts payable hereunder, (d) postpone any date fixed for any payment
of principal of, or interest on, the Advances or any fees or other amounts
payable hereunder, (e) change the percentage of the Revolving Credit Commitments
or of the aggregate unpaid principal amount of the Advances, or the number of
Lenders, that shall be required for the Lenders or any of them to take any
action hereunder, (f) reduce, subordinate or limit the obligations of the
Company under Section 7.01, (g) release all or substantially all of the
Subsidiary Guarantors from the obligations under the Subsidiary Guaranty (other
than to the extent permitted under the Subsidiary Guaranty), (h) amend this
Section 9.01 or (i) amend or waive any provision of this Agreement in any

 

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manner that would adversely affect such Lender’s right to receive its ratable
share of any payment made or proceeds distributed to which it is entitled under
the Loan Documents; and provided further that (x) no amendment, waiver or
consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Agent under this Agreement or any Note and (y) no amendment, waiver or consent
shall, unless in writing and signed by the Issuing Banks in addition to the
Lenders required above to take such action, adversely affect the rights or
obligations of the Issuing Banks in their capacities as such under this
Agreement.

 

SECTION 9.02. Notices, Etc. (a) All notices and other communications provided
for hereunder shall be either (a) in writing (including telecopier or
telegraphic communication) and mailed, telecopied, telegraphed or delivered or
(y) as and to the extent set forth in Section 9.02(c) and in the proviso to this
Section 9.02(a), if to any Borrower, at the address of the Company at 29400
Lakeland Blvd., Wickliffe, Ohio 44092-2298, Attention: Treasurer (with a copy to
the Company’s legal division at the same address); if to any Initial Lender, at
its Domestic Lending Office specified opposite its name on Schedule I hereto; if
to any other Lender, at its Domestic Lending Office specified in the Assignment
and Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at Two Penns Way, New Castle, Delaware 19720, Attention: Bank Loan
Syndications Department; or, as to any Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrowers and the Agent,
provided that materials required to be delivered pursuant to Section 5.01(h)(i),
(ii) or (iv) shall be delivered to the Agent as specified in Section 9.02(c).
All such notices and communications shall, when mailed, telecopied, telegraphed
or e-mailed, be effective when deposited in the mails, telecopied, delivered to
the telegraph company or confirmed by e-mail, respectively, except that notices
and communications to the Agent pursuant to Article II, III or VIII shall not be
effective until received by the Agent. Delivery by telecopier of an executed
counterpart of any amendment or waiver of any provision of this Agreement or the
Notes or of any Exhibit hereto to be executed and delivered hereunder shall be
effective as delivery of a manually executed counterpart thereof.

 

(b) Notwithstanding anything to the contrary contained in this Agreement or any
Note, (i) any notice to the Borrowers or to any one of them required under this
Agreement or any such Note that is delivered to the Company shall constitute
effective notice to the Borrowers or to any such Borrower, including the Company
and (ii) any Notice of Borrowing or any notice of Conversion delivered pursuant
to Section 2.09 may be delivered by any Borrower or by the Company, on behalf of
any other Borrower. Each Designated Subsidiary hereby irrevocably appoints the
Company as its authorized agent to receive and deliver notices in accordance
with this Section 9.02, and hereby irrevocably agrees that (A) in the case of
clause (i) of the immediately preceding sentence, the failure of the Company to
give any notice referred to therein to any such Designated Subsidiary to which
such notice applies shall not impair or affect the validity of such notice with
respect thereto and (B) in the case of clause (ii) of the immediately preceding
sentence, the delivery of any such notice by the Company, on behalf of any other
Borrower, shall be binding on such other Borrower to the same extent as if such
notice had been executed and delivered directly by such Borrower.

 

(c) So long as Citibank or any of its Affiliates is the Agent, materials
required to be delivered pursuant to Section 5.01(h)(i), (ii) and (iv) shall be
delivered to the Agent in an electronic medium in a format reasonably acceptable
to the Agent and the Lenders by e-mail at oploanswebadmin@citigroup.com. The
Company agrees that the Agent may make such materials, as well as any other
written information, documents, instruments and other material relating to the
Company, any of its Subsidiaries or any other materials or matters relating to
this Agreement, the Notes or any of the transactions contemplated hereby
(collectively, the “Communications”) available to the Lenders by posting such
notices on Intralinks or a substantially similar electronic system (the
“Platform”). The Company acknowledges that (i) the distribution of material
through an electronic medium is not necessarily secure and that there are
confidentiality and other risks associated with such distribution, (ii) the
Platform is provided “as is” and “as available” and (iii) neither the Agent nor
any of its Affiliates warrants the accuracy, adequacy or completeness of the
Communications or the Platform and each expressly disclaims liability for errors
or omissions in the Communications or the Platform. No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by the Agent
or any of its Affiliates in connection with the Platform.

 

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(d) Each Lender agrees that notice to it (as provided in the next sentence) (a
“Notice”) specifying that any Communications have been posted to the Platform
shall constitute effective delivery of such information, documents or other
materials to such Lender for purposes of this Agreement; provided that if
requested by any Lender the Agent shall deliver a copy of the Communications to
such Lender by email or telecopier. Each Lender agrees (i) to notify the Agent
in writing of such Lender’s e-mail address to which a Notice may be sent by
electronic transmission (including by electronic communication) on or before the
date such Lender becomes a party to this Agreement (and from time to time
thereafter to ensure that the Agent has on record an effective e-mail address
for such Lender) and (ii) that any Notice may be sent to such e-mail address.

 

SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender or the
Agent to exercise, and no delay in exercising, any right hereunder or under any
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

 

SECTION 9.04. Costs and Expenses. (a) The Borrowers agree to pay on demand all
reasonable, out-of-pocket costs and expenses of only the Agent in connection
with the preparation, execution, delivery, administration, modification and
amendment of this Agreement, the Notes and the other documents to be delivered
hereunder, including, without limitation, (A) all due diligence, syndication
(including printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrowers further agree to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without limitation,
reasonable fees and expenses of counsel for the Agent and each Lender in
connection with the enforcement of rights under this Section 9.04(a).

 

(b) The Borrowers agree to indemnify and hold harmless the Agent and each Lender
and each of their Affiliates and their officers, directors, employees, agents
and advisors (each, an “Indemnified Party”) from and against any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) incurred by or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
(i) the Notes, this Agreement, any of the transactions contemplated herein or
the actual or proposed use of the proceeds of the Advances or (ii) the actual or
alleged presence of Hazardous Materials on any property of the Company or any of
its Subsidiaries or any Environmental Action relating in any way to the Company
or any of its Subsidiaries, except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct. In the case of an investigation, litigation or
other proceeding to which the indemnity in this Section 9.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Borrower, its directors, equityholders or creditors
or an Indemnified Party or any other Person, whether or not any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. The Borrowers also agree not to assert any
claim for special, indirect, consequential or punitive damages against the
Agent, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of
liability, arising out of or otherwise relating to the Notes, this Agreement,
any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances.

 

(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by any Borrower to or for the account of a Lender (i) other than
on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.08, 2.10 or 2.12, acceleration of
the maturity of the Notes pursuant to Section 6.01 or for any other reason, or
by an Eligible Assignee to a Lender other than on the last day of the Interest
Period for such Advance upon an assignment of rights and obligations under this
Agreement pursuant to Section 9.07 as a result of a demand by the Company
pursuant to Section 9.07(a) or (ii) as a result of a payment or Conversion
pursuant to Section 2.08, 2.10 or 2.12, the applicable Borrower shall, upon
demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may reasonably

 

45

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incur as a result of such payment or Conversion, including, without limitation,
any loss, cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by any Lender to fund or maintain such
Advance.

 

(d) Without prejudice to the survival of any other agreement of any Borrower
hereunder, the agreements and obligations of the Borrowers contained in Sections
2.11, 2.14 and 9.04 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the Notes.

 

SECTION 9.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Advances due and payable pursuant to the provisions of Section 6.01,
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 indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of any Borrower against any and
all of the obligations of the Borrowers now or hereafter existing under this
Agreement and the Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the
applicable Borrower after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender and its Affiliates under this Section are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender and its Affiliates may have.

 

SECTION 9.06. Binding Effect. This Agreement shall become effective (other than
Section 2.01, which shall only become effective upon satisfaction of the
conditions precedent set forth in Section 3.01) when it shall have been executed
by the Company and the Agent and when the Agent shall have been notified by each
Initial Lender that such Initial Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Company, the Agent and each Lender
and their respective successors and assigns, except that no Borrower shall have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.

 

SECTION 9.07. Assignments and Participations. (a) Each Lender may and, if
demanded by the Company (following a demand by such Lender pursuant to Section
2.11 or 2.14) upon at least five Business Days’ notice to such Lender and the
Agent, will assign to one or more Persons all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Revolving Credit Commitment, its Term Commitment, its undrawn
Letter of Credit Commitment, the Advances owing to it, its participations in
Letters of Credit and the Note or Notes held by it); provided, however, that (i)
each such assignment shall be of a constant, and not a varying, percentage of
all rights and obligations under and in respect of one or more of the
Facilities, (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender’s rights and obligations under this Agreement, the amount of (x) the
Revolving Credit Commitment or Term Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof and
(y) the undrawn Letter of Credit Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
applicable Assignment and Acceptance) shall in no event be less than $1,000,000,
unless, in each case, the Company and the Agent agree, (iii) each such
assignment shall be to an Eligible Assignee, (iv) each such assignment made as a
result of a demand by the Company pursuant to this Section 9.07(a) shall be
arranged by the Company after consultation with the Agent and shall be either an
assignment of all of the rights and obligations of the assigning Lender under
this Agreement or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Company pursuant to this Section 9.07(a) unless and
until such Lender shall have received one or more payments from either the
Borrowers or one or more Eligible Assignees in an aggregate amount at least
equal to the aggregate outstanding principal amount of the Advances owing to
such Lender, together with accrued interest thereon to the date of payment of
such principal amount and all other amounts payable to such Lender under this
Agreement, and (vi) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note subject to such assignment and
a processing and recordation fee of $3,500 payable by the parties to each such

 

46

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assignment, provided, however, that in the case of each assignment made as a
result of a demand by the Company, such recordation fee shall be payable by the
Company except that no such recordation fee shall be payable in the case of an
assignment made at the request of the Company to an Eligible Assignee that is an
existing Lender, and (vii) any Lender may, without the approval of the Company
and the Agent, assign all or a portion of its rights to any of its Affiliates.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Section 2.11, 2.14 and 9.04
to the extent any claim thereunder relates to an event arising prior such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).

 

(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Borrower or the performance or observance by any Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender 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
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.

 

(c) Upon its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee, together
with any Note or Notes subject to such assignment, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company.

 

(d) The Agent shall maintain at its address referred to in Section 9.02 a copy
of each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Advances owing to, each Lender from time to time
(the “Register”). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrowers, the Agent and the
Lenders may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Company or any Lender at any reasonable time and from time
to time upon reasonable prior notice.

 

(e) Each Lender may sell participations to one or more banks or other entities
(other than the Company or any of its Affiliates) in or to all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitments, the Advances owing to it and any Note or
Notes held by it); provided, however, that (i) such Lender’s obligations under
this Agreement (including, without limitation, its Commitments to the Borrowers
hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrowers, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations

 

47

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under this Agreement and (v) no participant under any such participation shall
have any right to approve any amendment or waiver of any provision of this
Agreement or any Note, or any consent to any departure by any Borrower
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation, or
postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, in each case to the extent
subject to such participation.

 

(f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Company furnished to such Lender by or on behalf of the Company;
provided that, prior to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree to preserve the confidentiality of
any Confidential Information relating to the Company received by it from such
Lender.

 

(g) Notwithstanding any other provision set forth in this Agreement, any Lender
may at any time create a security interest in all or any portion of its rights
under this Agreement (including, without limitation, the Advances owing to it
and any Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.

 

(h) Designation. (i) Notwithstanding anything to the contrary contained herein,
any Lender (a “Designating Lender”) may grant to one or more special purpose
funding vehicles (each, an “SPV”), identified as such in writing from time to
time by the Designating Lender to the Agent and the Company, the option to
provide to the Borrowers all or any part of any Advance that such Designating
Lender would otherwise be obligated to make to the Borrowers pursuant to this
Agreement; provided that (A) nothing herein shall constitute a commitment by any
SPV to make any Advance, (B) if an SPV fails to provide all or any part of such
Advance, the Designating Lender shall be obligated to make such Advance pursuant
to the terms hereof and (C) the Designating Lender shall, at all times, remain
liable for any indemnity or other payment obligation with respect to its
Commitment hereunder. The making of a Advance by an SPV hereunder shall utilize
the applicable Commitment of the Designating Lender to the same extent, and as
if such Advance were made by such Designating Lender.

 

(ii) As to any Advances or portion thereof made by it, each SPV shall have all
the rights that the Designating Lender making such Advances or portion thereof
would have had under this Agreement; provided, however, that each SPV shall have
granted to its Designating Lender an irrevocable power of attorney, to deliver
and receive all communications and notices under this Agreement and to exercise
on such SPV’s behalf, all of such SPV’s voting rights under this Agreement. No
additional Notes shall be required to evidence the Advances or portion thereof
made by an SPV; and the related Designating Lender shall be deemed to hold its
Note, if any, as agent for such SPV to the extent of the Advances or portion
thereof funded by such SPV. In addition, any payments for the account of any SPV
shall be paid to its Designating Lender as agent for such SPV.

 

(iii) Each party hereto hereby agrees that no SPV shall be liable for any
indemnity or payment under this Agreement for which a Lender would otherwise be
liable. In furtherance of the foregoing, each party hereto hereby agrees (which
agreements shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPV, it will not institute
against, or join any other person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof.

 

(iv) In addition, notwithstanding anything to the contrary contained in this
Section 9.07(h) or otherwise in this Agreement, any SPV may (A) at any time and
without paying any processing fee therefor, assign or sell a participation in
all or a portion of its interest in any Advances to the Designating Lender or to
any financial institutions providing liquidity and/or credit support to or for
the account of such SPV to support the funding or maintenance of Advances and
(B) disclose on a confidential basis any non-public information relating to its
Advances to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancements to such SPV. This Section
9.07(h) may not be amended without the written consent of any Designating Lender
affected thereby.

 

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SECTION 9.08. Confidentiality. Neither the Agent nor any Lender shall disclose
any Confidential Information to any other Person without the written consent of
the Company, other than (a) to the Agent’s or such Lender’s Affiliates and their
officers, directors, employees, agents and advisors and, as contemplated by
Section 9.07(f), to actual or prospective Eligible Assignees and participants,
and then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process and (c) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking.

 

SECTION 9.09. Governing Law. This Agreement and the Notes shall be governed by,
and construed in accordance with, the laws of the State of New York.

 

SECTION 9.10. Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 9.11. Jurisdiction, Etc. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, 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 any such New York State court or, to the extent permitted by law,
in such federal court. Each Designated Subsidiary hereby agrees that service of
process in any such action or proceeding brought in the any such New York State
court or in such federal court may be made upon the Company at its address set
forth in Section 9.02 and each such Borrower hereby irrevocably appoints the
Company its authorized agent to accept such service of process, and agrees that
the failure of the Company to give any notice of any such service shall not
impair or affect the validity of such service or of any judgment rendered in any
action or proceeding based thereon. The Company hereby further irrevocably
consents to the service of process in any action or proceeding in such courts by
the mailing thereof by any parties hereto by registered or certified mail,
postage prepaid, to the Company at its address specified pursuant to Section
9.02. 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 shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Agreement or the Notes in the courts of
any jurisdiction.

 

(b) Each of the parties hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that 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 the Notes in any New York State
or federal court. 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.

 

SECTION 9.12. Designated Subsidiaries. (a) Designation. The Company may at any
time and from time to time by delivery to the Agent of a Designation Letter,
duly executed by the Company and a wholly owned Subsidiary organized within the
United States and in substantially the form of Exhibit E hereto, designate such
Subsidiary as a “Designated Subsidiary” for all purposes of this Agreement, and,
upon fulfillment of the applicable conditions set forth in Section 3.02 and
after such Designation Letter is accepted by the Agent, such Subsidiary shall
thereupon become a Designated Subsidiary for all purposes of this Agreement and,
as such, shall have all of the rights and obligations of a Borrower hereunder.
The Agent shall promptly notify each Lender of each such designation by the
Company and the identity of each such Designated Subsidiary.

 

(b) Termination. Upon the payment and performance in full of all of the
indebtedness, liabilities and obligations of any Designated Subsidiary under
this Agreement and the Notes issued by it, then, so long as at such time such
Designated Subsidiary has not submitted a Notice of Borrowing, such Designated
Subsidiary’s status as a Borrower and as a Designated Subsidiary shall terminate
upon notice to such effect from the Agent to the Lenders (which notice the Agent
shall promptly deliver to the Lenders following its receipt of such a request
from the Company). Thereafter, the Lenders shall be under no further obligation
to make any Advances to such Designated Subsidiary.

 

49

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SECTION 9.13. No Liability of the Issuing Banks. The Borrowers assume all risks
of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither an Issuing Bank
nor any of its officers or directors shall be liable or responsible for: (a) the
use that may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by such Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrowers shall have
a claim against such Issuing Bank, and such Issuing Bank shall be liable to the
Borrowers, to the extent of any direct, but not consequential damages suffered
by a Borrower that such Borrower proves were caused by (i) such Issuing Bank’s
willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) such Issuing Bank’s willful failure to make lawful payment under
a Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, such Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation.

 

SECTION 9.14. Patriot Act. Each Lender hereby notifies each Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies each Loan Party, which information
includes the name and address of each Loan Party and other information that will
allow such Lender to identify such Loan Party in accordance with the Act.

 

[The remainder of this page is intentionally left blank.]

 

50

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SECTION 9.15. Waiver of Jury Trial. Each of the Borrowers, the Agent and the
Lenders hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the Notes or the actions of the
Agent or any Lender in the negotiation, administration, performance or
enforcement thereof.

 

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

 

THE LUBRIZOL CORPORATION

By

 

/s/ James L. Hambrick

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

Name:

 

James L. Hambrick

Title:

 

President and CEO

By

 

/s/ Charles P. Cooley

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

Name:

 

Charles P. Cooley

Title:

 

Senior Vice President and CFO

CITICORP NORTH AMERICA, INC.,

    as Agent

By

 

/s/ Carolyn Sheridan

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

Name:

 

Carolyn Sheridan

Title:

 

Vice-President

 

51

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Initial Issuing Bank

 

CITICORP NORTH AMERICA, INC.

By

 

/s/ Carolyn Sheridan

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

Name:

 

Carolyn Sheridan

Title:

 

Vice-President

 

Initial Lenders

 

CITICORP NORTH AMERICA, INC.

By

 

/s/ Carolyn Sheridan

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

Name:

 

Carolyn Sheridan

Title:

 

Vice-President

KEYBANK NATIONAL ASSOCIATION

By

 

/s/ Marianne T. Meil

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

Name:

 

Marianne T. Meil

Title:

 

Vice President

ABN AMRO BANK N.V.

By

 

/s/ Alexander M. Blodi

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

Name:

 

Alexander M. Blodi

Title:

 

Managing Director

By

 

/s/ Michelle R. Costello

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

Name:

 

Michelle R. Costello

Title:

 

Assistant Vice President

WACHOVIA BANK, NATIONAL ASSOCIATION

By

 

/s/ Barbara Van Meerten

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

Name:

 

Barbara Van Meerten

Title:

 

Director

FIFTH THIRD BANK

By

 

/s/ Roy C. Lanctot

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

Name:

 

Roy C. Lanctot

Title:

 

Vice President

FORTIS CAPITAL CORP.

By

 

/s/ Henk Raison

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

 

/s/ Kathleen De Lathauer

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

Name:

 

Henk Raison

 

Kathleen De Lathauer

Title:

 

V.P.

 

SVP

MIZUHO CORPORATE BANK, LTD.

By

 

/s/ Greg Botshon

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

Name:

 

Greg Botshon

Title:

 

Senior Vice President

 

52

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PNC BANK, NATIONAL ASSOCIATION

By

 

/s/ Joseph G. Moran

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

Name:

 

Joseph G. Moran

Title:

 

Managing Director

THE ROYAL BANK OF SCOTLAND PLC

By

 

/s/ Patricia J. Dundee

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

Name:

 

Patricia J. Dundee

Title:

 

Senior Vice President

THE BANK OF TOKYO-MITSUBISHI, LTD.,

CHICAGO BRANCH

By

 

/s/ Shinichiro Munechika

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

Name:

 

Shinichiro Munechika

Title:

 

Deputy General Manager

CALYON NEW YORK BRANCH

By

 

/s/ Lee E. Greve

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

Name:

 

Lee E. Greve

Title:

 

Managing Director

   

Deputy Manager

By

 

/s/ Joseph A. Philbin

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

Name:

 

Joseph A. Philbin

Title:

 

Director

DEUTSCHE BANK AG NEW YORK BRANCH

By

 

/s/ Peter Yearly

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

Name:

 

Peter Yearly

Title:

 

Managing Director

By

 

/s/ Andre Niewiadowski

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

Name:

 

Andre Niewiadowski

Title:

 

Vice President

U.S. BANK, NATIONAL ASSOCIATION

By

 

/s/ Brian H. Gallagher

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

Name:

 

Brian H. Gallagher

Title:

 

Vice President

 

53

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

WELLS FARGO BANK, NATIONAL

ASSOCIATION

By

 

/s/ Steven M. Buehler

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

Name:

 

Steven M. Buehler

Title:

 

Vice President

By

 

/s/ Kathleen M. Savard

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

Name:

 

Kathleen M. Savard

Title:

 

Vice President

 

54

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

SCHEDULE I

THE LUBRIZOL CORPORATION

FIVE YEAR CREDIT AGREEMENT

APPLICABLE LENDING OFFICES

 

Name of Initial Lender

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

   Revolving Credit
Commitment

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

   Term Commitment

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

   Letter of Credit
Commitment

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

  

Domestic Lending
Office

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

  

Eurodollar Lending Office

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

Citicorp North America, Inc.

   $ 60,465,116.28    $ 69,534,883.72        

Two Penns Way

New Castle, DE 19720

Attn: Dave Graeber

T: 302 894-6034

F: 302 894-6120

  

Two Penns Way

New Castle, DE 19720

Attn: Dave Graeber

T: 302 894-6034

F: 302 894-6120

KeyBank National

Association

   $ 60,465,116.28    $ 69,534,883.72        

127 Public Square

Cleveland, OH 44121

Attn: Carolyn Zielski

T: 216 689-0413

F: 216 689-5962

  

127 Public Square

Cleveland, OH 44121

Attn: Carolyn Zielski

T: 216 689-0413

F: 216 689-5962

ABN AMRO Bank N.V.

   $ 52,325,581.40    $ 60,174,418.60        

208 South LaSalle Street,

Suite 1500

Chicago, IL 60604

Attn: John Byrd

F: 312 992-5111

  

208 South LaSalle Street,

Suite 1500

Chicago, IL 60604

Attn: John Byrd

F: 312 992-5111

Wachovia Bank, National

Association

   $ 52,325,581.40    $ 60,174,418.60        

201 S. College St, CP9

Charlotte, NC

Attn: Lisa White

T: 704 374-4426

F: 704 715-0098

  

201 S. College St, CP9

Charlotte, NC

Attn: Lisa White

T: 704 374-4426

F: 704 715-0098

Fifth Third Bank

   $ 30,232,558.14    $ 34,767,441.86        

5050 Kingsley Drive

Cincinnati, OH 45263

Attn: Stacie White

T: 513-358-3060

F: 513-358-0221

  

5050 Kingsley Drive

Cincinnati, OH 45263

Attn: Stacie White

T: 513-358-3060

F: 513-358-0221

Fortis Capital Corp.

   $ 30,232,558.14    $ 34,767,441.86        

3 Stamford Plaza

301 Tresser Boulevard, 9th Fl.

Stamford, CT 06901

Attn: Frank Campanelli

T: 203 705-5936

F: 203 705-5898

  

3 Stamford Plaza

301 Tresser Boulevard, 9th Fl.

Stamford, CT 06901

Attn: Frank Campanelli

T: 203 705-5936

F: 203 705-5898

 

55

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

Name of Initial Lender

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

   Revolving Credit
Commitment

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

   Term Commitment

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

   Letter of Credit
Commitment

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

  

Domestic Lending Office

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

  

Eurodollar Lending Office

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

Mizuho Corporate Bank,

Ltd.

   $ 30,232,558.14    $ 34,767,441.86        

1800 Plaza Ten

Jersey City, NJ 07311

Attn: Hyunsook Hwang

T: 201 626-9416

F: 201 626-9913

  

1800 Plaza Ten

Jersey City, NJ 07311

Attn: Hyunsook Hwang

T: 201 626-9416

F: 201 626-9913

PNC Bank, National

Association

   $ 30,232,558.14    $ 34,767,441.86        

501 First Avenue

#P7-FSC-04Z

Pittsburgh, PA 15219

Attn: April Washington

T: 412 768-6214

F: 412 768-4586

  

501 First Avenue

#P7-FSC-04Z

Pittsburgh, PA 15219

Attn: April Washington

T: 412 768-6214

F: 412 768-4586

The Royal Bank of

Scotland plc

   $ 30,232,558.14    $ 34,767,441.86        

101 Park Avenue

New York, NY 10178

Attn: Sheila Shaw

T: 212 401-1406

F: 212 401-1494

  

101 Park Avenue

New York, NY 10178

Attn: Sheila Shaw

T: 212 401-1406

F: 212 401-1494

The Bank of Tokyo-

Mitsubishi, Ltd., Chicago

Branch

   $ 30,232,558.14    $ 34,767,441.86        

Harborside Financial Center

500 Plaza III

Jersey City, NJ 07311

Attn: Jimmy Yu

T: 201 413-8566

F: 201 521-2335

  

Harborside Financial Center

500 Plaza III

Jersey City, NJ 07311

Attn: Jimmy Yu

T: 201 413-8566

F: 201 521-2335

Calyon New York Branch

   $ 23,255,813.95    $ 26,744,186.05        

1301 Avenue of the Americas

New York, NY 10019

Attn: Jai Sanichar

T: 212-261-7611

F : 212-459-3180

  

1301 Avenue of the Americas

New York, NY 10019

Attn: Jai Sanichar

T: 212-261-7611

F : 212-459-3180

Deutsche Bank AG New

York Branch

   $ 23,255,813.95    $ 26,744,186.05        

90 Hudson Street, Floor 1

Jersey City, NJ 07302

Attn: Ann-Renee Denora

T: 201 593-2121

F: 201 593-2313

  

90 Hudson Street, Floor 1

Jersey City, NJ 07302

Attn: Ann-Renee Denora

T: 201 593-2121

F: 201 593-2313

U.S. Bank National

Association

   $ 23,255,813.95    $ 26,744,186.05        

400 City Center

Oshkosh, WI 54901

Attn: Connie Sweeney

T: 920 237-7604

F : 920 237-7993

  

400 City Center

Oshkosh, WI 54901

Attn: Connie Sweeney

T: 920 237-7604

F : 920 237-7993

 

56

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

Name of Initial Lender

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

   Revolving Credit
Commitment

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

   Term Commitment

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

   Letter of Credit
Commitment

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

  

Domestic Lending Office

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

  

Eurodollar Lending Office

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

Wells Fargo Bank,

National Association

   $ 23,255,813.95    $ 26,744,186.05        

201 Third Street

MAC 0187-081

San Francisco, CA 94103

Attn: Cindy Dunn

T: 415 477-5431

F : 415 979-0675

  

201 Third Street

MAC 0187-081

San Francisco, CA 94103

Attn: Cindy Dunn

T: 415 477-5431

F : 415 979-0675

 

57

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

SCHEDULE 1.01

 

EXCLUDED DOMESTIC SUBSIDIARIES

 

Agrigenetics Research Corporation

 

Cosmetochem U.S.A.

 

Kalama Foreign Sales Corporation

 

58

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

EXHIBIT A-1 - FORM OF

REVOLVING CREDIT NOTE

 

U.S.$                

  Dated:                     , 200    

 

FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a
                         corporation (the “Borrower”), HEREBY PROMISES TO PAY to
                         (the “Lender”) for the account of its Applicable
Lending Office on the Termination Date (each as defined in the Credit Agreement
referred to below) the principal sum of U.S.$[amount of the Lender’s Revolving
Credit Commitment in figures] or, if less, the aggregate principal amount of the
Revolving Credit Advances (as defined below) made by the Lender to the Borrower
pursuant to the Credit Agreement dated as of                 , 2004 among the
Borrower, [The Lubrizol Corporation,] the Lender and certain other lenders
parties thereto, and Citicorp North America, Inc., as Agent for the Lender and
such other lenders (as amended or modified from time to time, the “Credit
Agreement”; the terms defined therein being used herein as therein defined)
outstanding on the Termination Date.

 

The Borrower promises to pay interest on the unpaid principal amount of each
Revolving Credit Advance from the date of such Revolving Credit Advance until
such principal amount is paid in full, at such interest rates, and payable at
such times, as are specified in the Credit Agreement.

 

Both principal and interest in respect of each Revolving Credit Advance are
payable in lawful money of the United States of America to the Agent at its
account maintained at 399 Park Avenue, New York, New York 10043, in same day
funds. Each Revolving Credit Advance owing to the Lender by the Borrower
pursuant to the Credit Agreement, and all payments made on account of principal
thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto which is part of this Promissory Note.

 

This Promissory Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of advances (the “Revolving Credit
Advances”) by the Lender to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each such Revolving
Credit Advance being evidenced by this Promissory Note and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.

 

[NAME OF BORROWER]

By

 

 

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

Title:

   

 

59

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

ADVANCES AND PAYMENTS OF PRINCIPAL

 

Date

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

 

Amount of

Advance

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

 

Amount of

Principal Paid

or Prepaid

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

  

Unpaid Principal

Balance

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

  

Notation

Made By

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

 

60

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

EXHIBIT A-2 - FORM OF

TERM NOTE

 

$                    

  Dated:                      , 200    

 

FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a
                         corporation (the “Borrower”), HEREBY PROMISES TO PAY to
                         (the “Lender”) for the account of its Applicable
Lending Office (defined in the Credit Agreement referred to below) the aggregate
principal amount of the Term Advance (as defined below) owing to the Lender by
the Borrower pursuant to the Credit Agreement dated as of                 , 2004
among the Borrower, [The Lubrizol Corporation,] the Lender and certain other
lenders parties thereto, and Citicorp North America, Inc., as Agent for the
Lender and such other lenders (as amended or modified from time to time, the
“Credit Agreement”; the terms defined therein being used herein as therein
defined), on the dates and in the amounts specified in the Credit Agreement.

 

The Borrower promises to pay interest on the unpaid principal amount of the Term
Advance from the date of the Term Advance until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement.

 

Both principal and interest are payable in lawful money of the United States of
America to the Agent at its account maintained at 399 Park Avenue, New York, New
York 10043, in same day funds. The Term Advance owing to the Lender by the
Borrower and the maturity thereof, and all payments made on account of principal
thereof, shall be recorded by the Lender and, prior to any transfer hereof,
endorsed on the grid attached hereto, which is part of this Promissory Note.

 

This Promissory Note is one of the Term Notes referred to in, and is entitled to
the benefits of, the Credit Agreement. The Credit Agreement, among other things,
(i) provides for the making of an advance (the “Term Advance”) by the Lender to
the Borrower in an amount not to exceed the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from such Term Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.

 

[NAME OF BORROWER]

By

 

 

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

Title:

   

 

61

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

ADVANCES AND PAYMENTS OF PRINCIPAL

 

Date

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

 

Amount of

Advance

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

 

Amount of

Principal Paid

or Prepaid

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

  

Unpaid Principal

Balance

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

  

Notation

Made By

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

 

62

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

EXHIBIT B - FORM OF NOTICE OF

BORROWING

 

Citicorp North America, Inc., as Agent

  for the Lenders parties

  to the Credit Agreement

  referred to below

  Two Penns Way

  New Castle, Delaware 19720

 

[Date]

 

Attention: Bank Loan Syndications Department

 

Ladies and Gentlemen:

 

The undersigned, [Name of Borrower], refers to the Credit Agreement, dated as of
                , 2004 (as amended or modified from time to time, the “Credit
Agreement”, the terms defined therein being used herein as therein defined),
among the undersigned, [The Lubrizol Corporation,] certain Lenders parties
thereto and Citicorp North America, Inc., as Agent for said Lenders, and hereby
gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement
that the undersigned hereby requests a Borrowing under the Credit Agreement, and
in that connection sets forth below the information relating to such Borrowing
(the “Proposed Borrowing”) as required by Section 2.02(a) of the Credit
Agreement:

 

(i) The Business Day of the Proposed Borrowing is                         ,
200    .

 

(ii) The Proposed Borrowing is to be made under the [Revolving Credit][Term]
Facility.

 

(iii) The Type of Advances comprising the Proposed Borrowing is [Base Rate
Advances] [Eurodollar Rate Advances].

 

(iv) The aggregate amount of the Proposed Borrowing is
$                        ].

 

[(v) The initial Interest Period for each Eurodollar Rate Advance made as part
of the Proposed Borrowing is          month[s].]

 

The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:

 

(A) the representations and warranties contained in Section 4.01 of the Credit
Agreement (except the representations set forth in the last sentence of
subsection (e) thereof) (and, if the undersigned is a Designated Subsidiary, in
the applicable Designation Letter) are correct, before and after giving effect
to the Proposed Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date except to the extent that such
representations and warranties expressly relate to an earlier specified date;
and

 

63

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

(B) no event has occurred and is continuing, or would result from such Proposed
Borrowing or from the application of the proceeds therefrom, that constitutes a
Default.

 

Very truly yours,

 

[NAME OF BORROWER]

By

 

 

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

Title:

   

 

64

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

EXHIBIT C - FORM OF

ASSIGNMENT AND ACCEPTANCE

 

Reference is made to the Credit Agreement dated as of                 , 2004 (as
amended or modified from time to time, the “Credit Agreement”) among The
Lubrizol Corporation, an Ohio corporation (the “Company”), the Lenders (as
defined in the Credit Agreement) and Citicorp North America, Inc., as agent for
the Lenders (the “Agent”). Terms defined in the Credit Agreement are used herein
with the same meaning.

 

The “Assignor” and the “Assignee” referred to on Schedule I hereto agree as
follows:

 

1. The Assignor hereby sells and assigns to the Assignee, without recourse, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor’s rights and obligations under the Credit Agreement Facility or
Facilities on Schedule I hereto together with, in the case of an assignment of a
Revolving Credit Commitment, participations in Letters of Credit held by the
Assignor on the date hereof. After giving effect to such sale and assignment,
the Assignee’s Commitment and the amount of the Advances owing to the Assignee
will be as set forth on Schedule 1 hereto.

 

2. The Assignor (i) represents and warrants that it is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Borrower or the performance or
observance by any Borrower of any of its obligations under the Credit Agreement
or any other instrument or document furnished pursuant thereto; and (iv)
attaches the Note[, if any,] held by the Assignor [and requests that the Agent
exchange such Note for a new Note payable to [the Assignee in an amount equal to
the Commitments assumed by the Assignee pursuant hereto or new Notes payable to
the Assignee in an amount equal to the Commitments assumed by the Assignee
pursuant hereto and] the Assignor in an amount equal to the Commitments retained
by the Assignor under the Credit Agreement[, respectively,] as specified on
Schedule 1 hereto].

 

3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof 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 Acceptance; (ii) agrees that it will, independently and without
reliance upon the 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 Credit
Agreement; (iii) confirms that it is an Eligible Assignee; (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; (v) agrees that it 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; and (vi) attaches any
U.S. Internal Revenue Service forms required under Section 2.14 of the Credit
Agreement.

 

4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the “Effective Date”) shall be the date
of acceptance hereof by the Agent, unless otherwise specified on Schedule 1
hereto.

 

5. Upon such acceptance and recording by the Agent, as of the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.

 

65

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

6. Upon such acceptance and recording by the Agent, from and after the Effective
Date, the Agent shall make all payments under the Credit Agreement and the Notes
in respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and facility fees with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate adjustments in
payments under the Credit Agreement and the Notes for periods prior to the
Effective Date directly between themselves.

 

7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.

 

8. This Assignment and Acceptance may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
Schedule 1 to this Assignment and Acceptance by telecopier shall be effective as
delivery of a manually executed counterpart of this Assignment and Acceptance.

 

IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.

 

66

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

Schedule 1

to

Assignment and Acceptance

 

Revolving Credit Facility

      

Percentage interest assigned:

                 %

Assignee’s Revolving Credit Commitment:

   $             

Aggregate outstanding principal amount of Advances assigned:

   $             

Principal amount of Revolving Credit Note payable to Assignee:

   $             

Principal amount of Revolving Credit Note payable to Assignor:

   $             

Term Facility

      

Percentage interest assigned:

                 %

Assignee’s Revolving Credit Commitment:

   $             

Aggregate outstanding principal amount of Advances assigned:

   $             

Principal amount of Term Note payable to Assignee:

   $             

Principal amount of Term Note payable to Assignor:

   $             

Letter of Credit Facility

      

Percentage interest assigned:

                 %

Assignee’s Letter of Credit Commitment:

   $             

Effective Date*:                 , 200    

 

[NAME OF ASSIGNOR], as Assignor

By

 

 

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

Title:

   

Dated:                 , 200    

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

* This date should be no earlier than five Business Days after the delivery of
this Assignment and Acceptance to the Agent.

 

67

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

[NAME OF ASSIGNEE], as Assignee

By

 

 

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

Title:

       

Dated:

                      , 200    

Domestic Lending Office:

            [Address]

Eurodollar Lending Office:

            [Address]

 

Accepted [and Approved]** this

                    day of , 200  

 

CITICORP NORTH AMERICA, INC., as Agent

By

 

 

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

Title:

   

 

[Approved this                      day

of                      , 200_

 

THE LUBRIZOL CORPORATION

   

By

 

 

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

  ]*

Title:

       

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

** Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of “Eligible Assignee”.

* Required if the Assignee is an Eligible Assignee solely by reason of clause
(iii) of the definition of “Eligible Assignee”.

 

68

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

EXHIBIT D - FORM OF

OPINION OF COUNSEL

FOR THE BORROWER

 

[Effective Date]

 

To each of the Lenders parties

  to the Five Year Credit Agreement

  referred to below and

  to Citicorp North America, Inc., as Agent

 

The Lubrizol Corporation

 

Ladies and Gentlemen:

 

This opinion is furnished to you pursuant to Section 3.01(i)(v) of the Credit
Agreement, dated as of             , 2004 (the “Credit Agreement”), among The
Lubrizol Corporation (the “Company”), the Lenders parties thereto and Citicorp
North America, Inc., as Agent for said Lenders. Terms defined in the Credit
Agreement are used herein as therein defined.

 

I am Vice President and General Counsel for the Loan Parties in connection with
the preparation, execution and delivery of the Loan Documents.

 

In that connection, I have examined:

 

(1) The Credit Agreement.

 

(2) The Subsidiary Guaranty.

 

(3) The documents furnished by each Loan Party pursuant to Section 3.01 of the
Credit Agreement.

 

(4) The Amended Articles of Incorporation and all amendments thereto (the
“Articles”) of each Loan Party.

 

(5) The Regulations or By-Laws of each Loan Party and all amendments thereto.

 

(6) A certificate of the Secretary of State of Ohio, dated             , 2004,
attesting to the continued corporate existence and good standing of the Company
in that State.

 

(7) Certificates of the Secretary of State of the jurisdiction of organization
of each Subsidiary Guarantor, dated             , 2004, attesting to the
continued corporate existence and good standing of that Subsidiary Guarantor.

 

I have also examined the originals, or copies certified to my satisfaction, of
the documents listed in a certificate of the chief financial officer of the
Company, dated the date hereof (the “Certificate”), certifying that the
documents listed in such certificate are all of the indentures, loan or credit
agreements, leases, guaranties, mortgages, security agreements, bonds, notes and
other agreements or instruments, and all of the orders, writs, judgments,
awards, injunctions and decrees, that affect or purport to affect each Loan
Party’s right to borrow money or such Loan Party’s

 

69

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

obligations under the Loan Documents. In addition, I have examined the
originals, or copies certified to my satisfaction, of such other corporate
records of the Loan Parties, certificates of public officials and of officers of
the Loan Parties, and agreements, instruments and other documents, as I have
deemed necessary as a basis for the opinions expressed below. As to questions of
fact material to such opinions, I have, when relevant facts were not
independently established by me, relied upon certificates of the Loan Parties or
their officers or of public officials. I have assumed the due execution and
delivery, pursuant to due authorization, of the Credit Agreement by the Initial
Lenders and the Agent.

 

My opinions expressed below are limited to the law of the State of Ohio, [the
General Corporation Law of the State of Delaware] and the Federal law of the
United States.

 

Based upon the foregoing, subject to the qualifications set forth below and upon
such investigation as I have deemed necessary, I am of the following opinion:

 

1. Each Loan Party is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation.

 

2. The execution, delivery and performance by each Loan Party of the Loan
Documents to which it is a party, and the consummation of the transactions
contemplated thereby, are within each Loan Party’s corporate powers, have been
duly authorized by all necessary corporate action, and do not contravene (i) the
Articles or the Regulations of such Loan Party or (ii) any law, rule or
regulation applicable to any Loan Party (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System) or (iii)
any contractual or legal restriction contained in any document listed in the
Certificate or, to the best of my knowledge, contained in any other similar
document. Each Loan Document has been duly executed and delivered on behalf of
each Loan Party signatory thereto.

 

3. No authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third party is
required for the due execution, delivery and performance by any Loan Party of
any Loan Document to which it is a party.

 

4. To the best of my knowledge, there are no pending or overtly threatened
actions or proceedings against the Company or any of its Subsidiaries before any
court, governmental agency or arbitrator that purport to affect the legality,
validity, binding effect or enforceability of any Loan Document or the
consummation of the transactions contemplated thereby or, except as described in
Schedule 3.01(b) to the Credit Agreement, that are likely to have a materially
adverse effect upon the financial condition or operations of the Company or any
of its Subsidiaries.

 

5. Courts of the State of Ohio and Federal courts sitting in the State of Ohio
will respect a contractual choice of law made in a contract, such as Section
9.09 of the Credit Agreement and Section 16(b) of the Subsidiary Guaranty, and
will apply the laws of the chosen state, unless either the chosen state has no
substantial relationship to the parties or the transaction and there is no
reasonable basis for the parties’ choice, or application of the laws of the
chosen state would be contrary to the fundamental policy of a state having a
greater material interest in the issue than the chosen state and such state
would be the state of applicable law in the absence of a choice by the parties.
Under this test, although I find no authority in point and cannot opine
definitely, I believe on a reasoned basis, that in any action or proceeding
arising out of or relating to the Credit Agreement, the Subsidiary Guaranty or
the Notes in any court of the State of Ohio or in any Federal court sitting in
the State of Ohio, such court would recognize and give effect to the provisions
of Section 9.09 of the Credit Agreement and Section 16(b) of the Subsidiary
Guaranty wherein the parties thereto agree that the Credit Agreement, the
Subsidiary Guaranty and the Notes shall be governed by, and construed in
accordance with, the laws of the State of New York. Without limiting the
generality of the foregoing and on the same reasoned basis, I believe that a
court of the State of Ohio or a Federal court sitting in the State of Ohio would
apply the usury law of the State of New York, and would not apply the usury law
of the State of Ohio, to the Credit Agreement, Subsidiary Guaranty and the
Notes. However, if a court of the State of Ohio or a Federal court sitting in
the State of Ohio were to hold that the

 

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Credit Agreement, the Subsidiary Guaranty and the Notes are governed by, and to
be construed in accordance with, the laws of the State of Ohio, the Credit
Agreement, the Subsidiary Guaranty and the Notes would be, under the laws of the
State of Ohio, legal, valid and binding obligations of each Loan Party party
thereto, enforceable against such Loan Party in accordance with their respective
terms.

 

The opinions set forth above are subject to the following qualifications:

 

(a) My opinion in the last sentence of paragraph 5 above as to enforceability is
subject to the effect of any applicable bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar law affecting creditors’ rights generally.

 

(b) My opinion in the last sentence of paragraph 5 above as to enforceability is
subject to the effect of general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
(regardless of whether considered in a proceeding in equity or at law).

 

(c) I express no opinion as to (i) Section 2.15 of the Credit Agreement insofar
as it provides that any Lender purchasing a participation from another Lender
pursuant thereto may exercise set-off or similar rights with respect to such
participation and (ii) the effect of the law of any jurisdiction other than the
State of Ohio wherein any Lender may be located or wherein enforcement of the
Credit Agreement or the Notes may be sought that limits the rates of interest
legally chargeable or collectible.

 

(d) My opinion in paragraph 3 above is not intended to cover consents, approvals
or filings that might be required as a result of the ordinary course of conduct
by any Loan Party of its businesses and operations.

 

(e) The opinions expressed herein are as of the date of this opinion letter only
and as to the laws covered hereby only as they are in effect on that date and I
assume no obligation to update or supplement such opinions to reflect any facts
or circumstances that may come to my attention after that date or any changes in
law that may occur or become effective after that date.

 

This opinion is solely for your benefit and for the benefit of your successors
and assigns in connection with the transactions contemplated by the Loan
Documents and is not to be given to or relied on by any other person or entity
or for any other purpose without my prior written consent.

 

Very truly yours,

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

JOSEPH W. BAUER

Vice President and General Counsel for

The Lubrizol Corporation

 

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EXHIBIT E

FORM OF DESIGNATION LETTER

 

                    [Date]

 

To each of the Lenders parties

  to the Five Year Credit Agreement

  referred to below and

  to Citicorp North America, Inc., as Agent

 

Ladies and Gentlemen:

 

Reference is made to the Credit Agreement, dated as of             , 2004 (the
“Credit Agreement”), among The Lubrizol Corporation (the “Company”), the Lenders
parties thereto and Citicorp North America, Inc., as Agent for said Lenders.
Terms defined in the Credit Agreement are used herein as therein defined.

 

Please be advised that the Company hereby designates the undersigned wholly
owned Subsidiary organized within the United States,             , a
             (the “Designated Subsidiary”), as a “Designated Subsidiary” and a
“Borrower” under and for all purposes of the Credit Agreement.

 

The Designated Subsidiary, in consideration of the agreement of each Lender to
extend credit to it from time to time under, and on the terms and conditions set
forth in, the Credit Agreement does hereby assume each of the obligations
imposed upon a Designated Subsidiary and a Borrower under the Credit Agreement
and agrees to be bound by all of the terms and conditions of the Credit
Agreement. Notwithstanding any other provisions of the Credit Agreement or this
Designation Letter, stock of a foreign entity directly held by the Designated
Subsidiary shall not serve as security for any or all of the obligations imposed
upon a Designated Subsidiary and a Borrower under the Credit Agreement, other
than stock of any such foreign entity representing no more than 65% of the total
combined voting power of all classes of stock of such entity entitled to vote.
The Designated Subsidiary has, on the date hereof, delivered to the Agent a
properly completed and duly executed Note, in substantially the form of Exhibit
A-1 or A-2, as applicable, to the Credit Agreement, payable to each Lender that
has made a request pursuant to Section 2.16 of the Credit Agreement.

 

In furtherance of the foregoing, the Designated Subsidiary hereby represents and
warrants to the Agent and each of the Lenders as follows:

 

1. The Designated Subsidiary is a Person duly organized, validly existing and,
to the extent such concept is applicable in the jurisdiction of organization of
the Designated Subsidiary, in good standing under the laws of             .

 

2. The execution, delivery and performance by the Designated Subsidiary of this
Designation Letter, the Credit Agreement and the Notes issued by the Designated
Subsidiary and the consummation of the transactions contemplated hereby and
thereby, are within the Designated Subsidiary’s powers, have been duly
authorized by all necessary action (including, without limitation, all necessary
stockholders’ action), and do not contravene (a) the Designated Subsidiary’s
charter or by-laws (or similar organizational documents) or (b) law or any
contractual restriction binding on or affecting the Designated Subsidiary.

 

3. No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third party is
required for the due execution, delivery and performance by the Designated
Subsidiary of this Designation Letter, the Credit Agreement or any of the Notes
issued by the Designated Subsidiary, or for the consummation of the transactions
contemplated hereby and thereby, except as have been obtained or made and are in
full force and effect.

 

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4. This Designation Letter has been, and each of the Notes issued by the
Designated Subsidiary when executed and delivered under the Credit Agreement
will have been, duly executed and delivered by the Designated Subsidiary. Each
of this Designation Letter and the Credit Agreement is, and each of the Notes
issued by the Designated Subsidiary when delivered under the Credit Agreement
will be, the legal, valid and binding obligation of the Designated Subsidiary,
enforceable against the Designated Subsidiary in accordance with their
respective terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws generally affecting creditors’ rights and by equitable
principles (regardless of whether enforcement is sought in equity or law).

 

5. There is no pending or, to the knowledge of the Designated Subsidiary,
threatened action, suit, investigation, litigation or proceeding, including,
without limitation, any Environmental Action, affecting the Designated
Subsidiary or any of its Subsidiaries before any court, governmental agency or
arbitrator that (i) could reasonably be expected to have a Material Adverse
Effect or (ii) purports to affect the legality, validity or enforceability of
this Designation Letter, the Credit Agreement or any of the Notes issued by the
Designated Subsidiary, or the consummation of the transactions contemplated
hereby and thereby.

 

6. The Designated Subsidiary is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance to the Designated Subsidiary 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

 

The Designated Subsidiary hereby irrevocably appoints the Company as its
authorized agent to receive and deliver notices in accordance with Section
9.02(c) of the Credit Agreement, and hereby irrevocably agrees that (A) in the
case of any notices delivered to the Company, on behalf of the Designated
Subsidiary, in accordance with Section 9.02(b) of the Credit Agreement, the
failure of the Company to give any notice referred to therein to the Designated
Subsidiary shall not impair or affect the validity of such notice with respect
thereto and (B) in the case of Notice of Borrowing or notice of Conversion
delivered pursuant to Section 2.07 of the Credit Agreement by the Company, on
behalf of the Designated Subsidiary, in accordance with Section 9.02(b) of the
Credit Agreement, the delivery of any such notice by the Company, on behalf of
the Designated Subsidiary, shall be binding on the Designated Subsidiary to the
same extent as if such notice had been executed and delivered directly by the
Designated Subsidiary.

 

The Designated Subsidiary hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York state
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Designation Letter, the Credit Agreement or any of
the Notes issued by the Designated Subsidiary or for recognition or enforcement
of any judgment, and hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in any such New York State court or, to the extent permitted by applicable law,
in such federal court. The Designated Subsidiary hereby further irrevocably
consents to the service of process in any action or proceeding in such courts by
the mailing thereof by any Lender or the Agent by registered or certified mail,
postage prepaid, to it at its address specified below its name on the signature
page hereto. The Designated Subsidiary hereby further agrees that service of
process in any such action or proceeding brought in any such New York State
court or in any such federal court may be made upon the Company at the address
referred to in Section 9.02 of the Credit Agreement, and the Designated
Subsidiary hereby irrevocably appoints the Company as its authorized agent to
accept such service of process, and agrees that the failure of the Company to
give any notice of any such service to it shall not impair or affect the
validity of such service or of any judgment rendered in any action or proceeding
based thereon. The Designated Subsidiary 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
applicable law. Nothing in this Designation Letter, the Credit Agreement or any
of the Notes issued by the Designated Subsidiary shall affect any right that any
party may otherwise have to serve legal process in any other manner permitted by
applicable law or to bring any action or proceeding relating to this Designation
Letter, the Credit Agreement or any such Note in the courts of any jurisdiction.

 

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The Designated Subsidiary irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Designation Letter, the Credit Agreement or any of
the Notes issued by it in any New York state or federal court. The Designated
Subsidiary hereby irrevocably waives, to the fullest extent permitted by
applicable law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.

 

To the extent that the Designated Subsidiary has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Designated Subsidiary hereby irrevocably waives such immunity in respect of its
obligations under this Designation Letter, the Credit Agreement or any of the
Notes issued by it.

 

The Designated Subsidiary hereby irrevocably waives all right to trial by jury
in any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Designation Letter, the Credit
Agreement or any of the Notes issued by it or the actions of the Agent or any
Lender in the negotiation, administration, performance or enforcement thereof.

 

Very truly yours,

THE LUBRIZOL CORPORATION

By

 

 

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

Name:

   

Title:

   

[THE DESIGNATED SUBSIDIARY]

By

 

 

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

Name:

   

Title:

   

Address:

   

 

Acknowledged and Agreed to as of the date first above written:

CITIBANK, N.A., as Agent

By

 

 

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

Name:

   

Title:

   

 

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EXHIBIT F

FORM OF SUBSIDIARY GUARANTY

 

[To be separately delivered.]

 

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