Exhibit 10.1

 

Execution

 

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FIVE-YEAR CREDIT AGREEMENT

 

dated as of

 

August 12, 2005

 

between

 

HARTE-HANKS, INC.

 

The LENDERS Party Hereto,

 

J.P. MORGAN SECURITIES INC.

as Joint Lead Arranger and Joint Bookrunner

 

WELLS FARGO BANK, N.A.,

as Joint Lead Arranger, Joint Bookrunner and Syndication Agent

 

BANK OF AMERICA, N.A. and

THE BANK OF TOKYO-MITSUBISHI, LTD.

as Co-Documentation Agents

 

and

 

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

 

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$125,000,000

 

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TABLE OF CONTENTS

 

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    ARTICLE I          DEFINITIONS      SECTION 1.01.   Defined Terms    1
SECTION 1.02.   Classification of Loans and Borrowings    15 SECTION 1.03.  
Terms Generally    15 SECTION 1.04.   Accounting Terms; GAAP    16     ARTICLE
II          THE CREDITS      SECTION 2.01.   The Commitments    16 SECTION 2.02.
  Loans and Borrowings.    16 SECTION 2.03.   Requests for Syndicated
Borrowings.    17 SECTION 2.04.   Competitive Bid Procedure.    18 SECTION 2.05.
  Swingline Loans.    20 SECTION 2.06.   Letters of Credit.    22 SECTION 2.07.
  Funding of Borrowings.    27 SECTION 2.08.   Interest Elections.    27 SECTION
2.09.   Termination and Reduction of the Commitments.    29 SECTION 2.10.  
Repayment of Loans; Evidence of Debt.    29 SECTION 2.11.   Prepayment of Loans.
   31 SECTION 2.12.   Fees.    31 SECTION 2.13.   Interest.    33 SECTION 2.14.
  Alternate Rate of Interest    34 SECTION 2.15.   Increased Costs.    34
SECTION 2.16.   Break Funding Payments    36 SECTION 2.17.   Taxes.    36
SECTION 2.18.   Payments Generally; Pro Rata Treatment; Sharing of Set-offs.   
37 SECTION 2.19.   Mitigation Obligations; Replacement of Lenders.    39    
ARTICLE III          REPRESENTATIONS AND WARRANTIES      SECTION 3.01.  
Organization; Powers    40 SECTION 3.02.   Authorization; Enforceability    40
SECTION 3.03.   Governmental Approvals; No Conflicts    41

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SECTION 3.04.   Financial Condition; No Material Adverse Change.    41 SECTION
3.05.   Properties.    41 SECTION 3.06.   Litigation and Environmental Matters.
   42 SECTION 3.07.   Compliance with Laws and Agreements    42 SECTION 3.08.  
Investment and Holding Company Status    42 SECTION 3.09.   Taxes    42 SECTION
3.10.   ERISA    43 SECTION 3.11.   Disclosure    43 SECTION 3.12.   Use of
Credit    43 SECTION 3.13.   Certain Agreements and Liens.    43 SECTION 3.14.  
Subsidiaries    44 SECTION 3.15.   Deferred Compensation and Incentive Plans   
44     ARTICLE IV          CONDITIONS      SECTION 4.01.   Effective Date    44
SECTION 4.02.   Each Credit Event    46     ARTICLE V          AFFIRMATIVE
COVENANTS      SECTION 5.01.   Financial Statements and Other Information    46
SECTION 5.02.   Notices of Material Events    47 SECTION 5.03.   Existence;
Conduct of Business    48 SECTION 5.04.   Payment of Obligations    48 SECTION
5.05.   Maintenance of Properties; Insurance    48 SECTION 5.06.   Books and
Records; Inspection Rights    48 SECTION 5.07.   Compliance with Laws    49    
ARTICLE VI          NEGATIVE COVENANTS      SECTION 6.01.   Liens    49 SECTION
6.02.   Fundamental Changes.    50 SECTION 6.03.   Sale and Leasebacks.    52
SECTION 6.04.   Transactions with Affiliates    52 SECTION 6.05.   Subsidiary
Indebtedness    53 SECTION 6.06.   Certain Financial Covenants.    53    
ARTICLE VII          EVENTS OF DEFAULT    53

 

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     ARTICLE VIII           THE ADMINISTRATIVE AGENT    56      ARTICLE IX     
     MISCELLANEOUS      SECTION 9.01.    Notices.    58 SECTION 9.02.   
Waivers; Amendments.    60 SECTION 9.03.    Expenses; Indemnity; Damage Waiver.
   61 SECTION 9.04.    Successors and Assigns.    62 SECTION 9.05.    Survival
   65 SECTION 9.06.    Counterparts; Integration; Effectiveness    66 SECTION
9.07.    Severability    66 SECTION 9.08.    Right of Setoff    66 SECTION 9.09.
   Governing Law; Jurisdiction; Etc.    67 SECTION 9.10.    Waiver of Jury Trial
   67 SECTION 9.11.    Headings    68 SECTION 9.12.    Treatment of Certain
Information; Confidentiality.    68 SECTION 9.13.    USA Patriot Act    69
SECTION 9.14.    Interest Rate Limitation    69

 

SCHEDULE I   -   Commitments SCHEDULE II   -   Certain Agreements and Liens
SCHEDULE III   -   Litigation SCHEDULE IV   -   Environmental Matters SCHEDULE V
  -   Subsidiaries EXHIBIT A   -   Form of Assignment and Assumption EXHIBIT B  
-   Form of Opinion of Counsel to the Borrower EXHIBIT C   -   Form of Opinion
of Special New York Counsel to JPMCB

 

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FIVE-YEAR CREDIT AGREEMENT dated as of August 12, 2005, between HARTE-HANKS,
INC., the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative
Agent.

 

The Borrower (as hereinafter defined) has requested that the Lenders (as so
defined) extend credit to it in an aggregate principal or face amount not
exceeding $125,000,000 at any one time outstanding. The Lenders are prepared to
extend such credit upon the terms and conditions hereof, and, accordingly, the
parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

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

 

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

 

“Adjusted LIBO Rate” means, for the Interest Period for any Syndicated
Eurodollar Borrowing, an interest rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate for such Interest Period.

 

“Administrative Agent” means JPMCB, in its capacity as administrative agent for
the Lenders hereunder.

 

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

 

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

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate for such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
from and including the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, as the case may be.

 

“Annual Report” has the meaning assigned to such term in Section 5.01(a).

 

Credit Agreement

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“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment. If the Commitments
have terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.

 

“Applicable Rate” means, for any day, with respect to any ABR Loan or Syndicated
Eurodollar Loan, or with respect to the facility fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
“ABR Spread”, “Eurodollar Spread” or “Facility Fee Rate”, respectively, based
upon the Leverage Ratio as of the most recent determination date:

 

Leverage Ratio:

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ABR

Spread

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Eurodollar

Spread

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Facility

Fee Rate

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Category 1

Less than 1.50x

  0.000%   0.315%   0.085%

Category 2

Equal to or greater than

1.50x but less than or

equal to 2.50x

  0.000%   0.500%   0.125%

Category 3

Greater than 2.50x

  0.000%   0.600%   0.150%

 

For purposes of the foregoing, (i) the Leverage Ratio shall be determined as of
the end of each fiscal quarter of the Borrower’s fiscal year based upon the
Borrower’s consolidated financial statements delivered pursuant to Section
5.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date three Business Days after delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that (i) the Leverage Ratio shall be deemed to be in Category 3
(A) at any time that an Event of Default has occurred and is continuing and (B)
if the Borrower fails to deliver the consolidated financial statements required
to be delivered by it pursuant to Section 5.01(a) or (b), during the period from
the expiration of the time for delivery thereof until such consolidated
financial statements are delivered; and (ii) until the date three Business Days
after the first delivery of the Borrower’s consolidated financial statements
pursuant to Section 5.01, the “Applicable Rate” shall be the applicable rate per
annum set forth above under the captions “Eurodollar Spread” and “Facility Fee
Rate” in Category 1.

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions

 

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of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 

“Availability Period” means the period from and including the Effective Date to
but excluding the Commitment Termination Date.

 

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

 

“Borrower” means Harte-Hanks, Inc., a Delaware corporation.

 

“Borrowing” means (a) all Syndicated ABR Loans made, converted or continued on
the same date, (b) all Syndicated Eurodollar Loans or Competitive Loans of the
same Class and Type that have the same Interest Period (or any single
Competitive Loan that does not have the same Interest Period as any other
Competitive Loan of the same Type) or (c) a Swingline Loan. For purposes hereof,
the date of a Syndicated Borrowing comprising Loans that have been converted or
continued shall be the effective date of the most recent conversion or
continuation of such Loans.

 

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

 

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

 

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

 

“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 25% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by Persons who were neither

 

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(i) nominated by the board of directors of the Borrower nor (ii) appointed by
directors so nominated; or (c) the acquisition of direct or indirect Control of
the Borrower by any Person or group.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or,
for purposes of Section 2.15(b), by any lending office of such Lender or by such
Lender’s or such Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans constituting such Borrowing, are Syndicated Loans,
Competitive Loans or Swingline Loans.

 

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

 

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Syndicated Loans and to acquire participations in Letters of Credit and
Swingline Loans hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.09 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04. The
initial amount of each Lender’s Commitment is set forth on Schedule I, or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable. The initial aggregate amount of the Lenders’
Commitments is $125,000,000.

 

“Commitment Termination Date” means August 12, 2010.

 

“Competitive”, when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans constituting such Borrowing, are made pursuant
to Section 2.04.

 

“Competitive Bid” means an offer by a Lender to make a Competitive Loan in
accordance with Section 2.04.

 

“Competitive Bid Rate” means, with respect to any Competitive Bid, the Margin or
the Fixed Rate, as applicable, offered by the Lender making such Competitive
Bid.

 

“Competitive Bid Request” means a request by the Borrower for Competitive Bids
in accordance with Section 2.04.

 

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

 

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

 

“Disclosed Matters” means the actions, suits and proceedings disclosed in
Schedule III and the environmental matters disclosed in Schedule IV.

 

“Disposition” means any sale, assignment, transfer or other disposition of any
property (whether now owned or hereafter acquired) by the Borrower or any of its
Subsidiaries to any other Person (other than the Borrower or any of its
Subsidiaries) excluding (i) any sale, assignment, transfer or other disposition
of any property sold or disposed of in the ordinary course of business and on
ordinary business terms and (ii) any loss or damage to, or any condemnation or
taking of, any property.

 

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

 

“EBITDA” means, for any period, the sum, for the Borrower and its Subsidiaries
(determined on a consolidated basis without duplication in accordance with
GAAP), of the following: (a) income (loss) from operations (calculated before
Interest Expense, taxes, extraordinary and unusual items and income or loss
attributable to equity in Affiliates) for such period plus (b) depreciation,
amortization and other non-cash charges (to the extent deducted in determining
income (loss) from operations) for such period.

 

Notwithstanding the foregoing, if during any period for which EBITDA is being
determined the Borrower or any of its Subsidiaries shall have consummated any
acquisition or shall have consummated any Disposition then, for all purposes of
this Agreement, EBITDA shall be determined on a pro forma basis as if such
acquisition or such Disposition had been made or consummated on the first day of
such period.

 

“Effective Date” means the date on which the conditions specified in Section
4.01 are satisfied (or waived in accordance with Section 9.02).

 

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

 

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

 

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

 

“Equity Rights” means, with respect to any Person, any subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including
any shareholders’ or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any additional shares
of capital stock of any class, or partnership or other ownership interests of
any type in, such Person.

 

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

 

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

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans constituting such Borrowing, are bearing interest at a
rate determined by reference to (a) in the case of a Syndicated Loan or a
Syndicated Borrowing, the Adjusted LIBO Rate, or (b) in the case of a
Competitive Loan or a Competitive Borrowing, the LIBO Rate.

 

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

 

“Exchange Act” means the United States Securities Exchange Act of 1934, as
amended.

 

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“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
any Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender’s failure or inability to comply with Section 2.17(e),
except to the extent that such Foreign Lender (or its assignor, if any) was
entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.17(a).

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

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

 

“Fixed Rate” means, with respect to any Competitive Loan (other than a
Competitive Eurodollar Loan), the fixed rate of interest per annum specified by
the Lender making such Competitive Loan in its related Competitive Bid. When
used in reference to any Loan or Borrowing, “Fixed Rate” refers to whether such
Loan, or the Loans constituting such Borrowing, are Competitive Loans bearing
interest at a Fixed Rate.

 

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

 

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

 

“Governmental Authority” means the government of the United States of America,
or of any other nation, or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

 

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

 

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

 

“Hedging Agreement” means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money (or with respect to deposits or advances of any
kind that have substantially the same effect as obligations for borrowed money),
(b) all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid (excluding current accounts payable incurred in the
ordinary course of business), (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances and (j) in respect
of the Borrower, the principal or face amount of all obligations in respect of
Loans and LC Exposure hereunder. The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a

 

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result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Interest Coverage Ratio” means, as at any date of determination thereof, the
ratio of (a) EBITDA for the period of four fiscal quarters ending on or most
recently ended prior to such date to (b) Interest Expense for such period.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Syndicated Borrowing in accordance with Section 2.08.

 

“Interest Expense” means, for any period, the sum, for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all interest in respect of
Indebtedness (including the interest component of any payments in respect of
Capital Lease Obligations) accrued or capitalized during such period (whether or
not actually paid during such period) plus (b) the net amount payable (or minus
the net amount receivable) under Hedging Agreements relating to interest during
such period (whether or not actually paid or received during such period) plus
(c) all fees, commissions and other charges payable by the Borrower in respect
of letters of credit included in Indebtedness under the definition thereof.

 

Notwithstanding the foregoing, if during any period for which Interest Expense
is being determined the Borrower or any of its Subsidiaries shall have
consummated any acquisition or Disposition then, for all purposes of this
Agreement, Interest Expense shall be determined on a pro forma basis as if such
acquisition or Disposition (and any Indebtedness incurred by the Borrower or any
of its Subsidiaries in connection with such acquisition or repaid as a result of
such Disposition) had been made or consummated (and such Indebtedness incurred
or repaid) on the first day of such period.

 

“Interest Payment Date” means (a) with respect to any Syndicated ABR Loan, each
Quarterly Date, (b) with respect to any Eurodollar Loan, the last day of each
Interest Period therefor and, in the case of any Interest Period for a
Eurodollar Loan of more than three months’ duration, each day prior to the last
day of such Interest Period that occurs at three-month intervals after the first
day of such Interest Period, (c) with respect to any Fixed Rate Loan, the last
day of the Interest Period therefor and, in the case of any Interest Period for
a Fixed Rate Loan of more than 90 days’ duration (unless otherwise specified in
the applicable Competitive Bid Request), each day prior to the last day of such
Interest Period that occurs at 90-day intervals after the first day of such
Interest Period, and any other dates that are specified in the applicable
Competitive Bid Request as Interest Payment Dates with respect to such Loan and
(d) with respect to any Swingline Loan, the day that such Loan is required to be
repaid.

 

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“Interest Period” means:

 

(a) for any Syndicated Eurodollar Loan, the period commencing on the date of
such Loan and ending on the numerically corresponding day in the calendar month
that is one, two, three or six months thereafter, as specified in the applicable
Borrowing Request or Interest Election Request;

 

(b) for any Competitive Eurodollar Loan, the period commencing on the date of
such Loan and ending on the numerically corresponding day in the calendar month
that is one, three, six or nine months thereafter, as specified in the
applicable Competitive Bid Request; and

 

(c) for any Fixed Rate Loan, the period (which shall not be less than seven days
or more than 360 days) commencing on the date of such Loan and ending on the
date specified in the applicable Competitive Bid Request;

 

provided, that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and (ii) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Loan initially shall be the date on which such
Loan is made and, in the case of a Syndicated Loan, thereafter shall be the
effective date of the most recent conversion or continuation of such Loan.

 

“Issuing Bank” means, collectively, JPMCB, Wells Fargo Bank, N.A. and Bank of
America, N.A., each as an issuer of Letters of Credit hereunder, and their
respective successors in such capacity as provided in Section 2.06(i). Each
Issuing Bank may, in its discretion, arrange for one or more Letters of Credit
to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing
Bank” shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate.

 

“JPMCB” means JPMorgan Chase Bank, N.A.

 

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

 

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

 

“Lenders” means the Persons listed on Schedule I and any other Person that shall
have become a party hereto pursuant to an Assignment and Assumption, other than
any such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption. Unless the context otherwise requires, the term “Lenders” includes
the Swingline Lenders.

 

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

 

“Letter of Credit Documents” means, with respect to any Letter of Credit,
collectively, any application therefor and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk with respect to such Letter of
Credit or (b) any collateral security for any of such obligations, each as the
same may be modified and supplemented and in effect from time to time.

 

“Leverage Ratio” means, as at any date, the ratio of (a) Indebtedness of the
Borrower and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) on such date to (b) EBITDA for the period
of four fiscal quarters ending on or most recently ended prior to such date.

 

“LIBO Rate” means, for the Interest Period for any Eurodollar Borrowing, the
rate appearing on Page 3750 of the Telerate Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
Dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for the offering of Dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not available
at such time for any reason, then the LIBO Rate for such Interest Period shall
be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable
to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance securing the performance of an obligation,
charge or security interest in, on or of such asset (including, in the case of
any account or other receivable, any sale thereof other than sales thereof in
the ordinary course of business for purposes of collection of past-due
receivables) and (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset.

 

“Loan Documents” means, collectively, this Agreement and the Letter of Credit
Documents.

 

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

 

“Margin” means, with respect to any Competitive Loan bearing interest at a rate
based on the LIBO Rate, the marginal rate of interest, if any, to be added to or
subtracted from the LIBO Rate to determine the rate of interest applicable to
such Loan, as specified by the Lender making such Loan in its related
Competitive Bid.

 

“Margin Stock” means “margin stock” within the meaning of Regulations T, U and X
of the Board.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, properties, operations, prospects or condition, financial or otherwise,
of the Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform any of its obligations under this Agreement or any of the
other Loan Documents or (c) the rights of or benefits available to the Lenders
under this Agreement or any of the other Loan Documents.

 

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $20,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of any Person in respect of any Hedging
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements) that such Person would be required to pay if such
Hedging Agreement were terminated at such time.

 

“Material Subsidiary” means any Subsidiary which (i) accounts for more than 5%
of the total consolidated revenue of the Borrower and its Subsidiaries or (ii)
represents more than 5% of the total consolidated assets of the Borrower and its
Subsidiaries.

 

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

 

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

 

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

 

“Permitted Encumbrances” means:

 

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

 

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(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;

 

(c) pledges and deposits made in the ordinary course of business in compliance
with workers’ compensation, unemployment insurance and other social security
laws or regulations;

 

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

 

(e) judgment liens in respect of judgments that do not constitute an Event of
Default under clause (k) of Article VII.

 

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

 

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

 

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

 

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

 

“Quarterly Dates” means the last Business Day of March, June, September and
December in each year, the first of which shall be the first such day after the
date hereof.

 

“Quarterly Report” has the meaning assigned to such term in Section 5.01(b).

 

“Register” has the meaning set forth in Section 9.04.

 

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

 

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“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures
and unused Commitments representing at least 51% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time (provided that,
for purposes of declaring the Loans to be due and payable pursuant to Article
VII, and for all purposes after the Loans become due and payable pursuant to
Article VII or the Commitments expire or terminate, the outstanding Competitive
Loans of the Lenders shall be included in determining the Required Lenders). The
“Required Lenders” of a particular Class of Loans means Lenders having Revolving
Credit Exposures and unused Commitments of such Class representing at least 51%
of the total Revolving Credit Exposures and unused Commitments of such Class at
such time.

 

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

 

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

 

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

 

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

 

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“Swingline Lender” means JPMCB and such other Lender that agrees to become a
Swingline Lender and is consented to by the Administrative Agent and the
Borrower, in their capacity as a lender of Swingline Loans hereunder.

 

“Swingline Loan” means a Loan made pursuant to Section 2.05.

 

“Syndicated”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans constituting such Borrowing, are Revolving Loans or
Borrowings (i.e. such Loan or Borrowing is not a Competitive or Swingline Loan
or Borrowing).

 

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

 

“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents, the borrowing of Loans and the use
of the proceeds thereof and the issuance of Letters of Credit hereunder.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans constituting such Borrowing, is
determined by reference to the Adjusted LIBO Rate, the Alternate Base Rate or,
in the case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.

 

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

 

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

 

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

 

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Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.

 

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

 

ARTICLE II

 

THE CREDITS

 

SECTION 2.01. The Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Syndicated Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (a) such Lender’s Syndicated Loans exceeding such Lender’s
Commitment or (b) the sum of the total Syndicated Loans plus the aggregate
principal amount of outstanding Competitive Loans plus the aggregate principal
amount of Swingline Loans exceeding the total Commitments. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Syndicated Loans.

 

SECTION 2.02. Loans and Borrowings.

 

(a) Obligations of Lenders. Each Syndicated Loan shall be made as part of a
Borrowing consisting of Loans of the same Type made by the Lenders ratably in
accordance with their respective Commitments. Each Competitive Loan shall be
made in accordance with the procedures set forth in Section 2.04. The failure of
any Lender to make any Loan required to be made by it shall not relieve any
other Lender of its obligations hereunder; provided that the Commitments and
Competitive Bids of the Lenders are several and no Lender shall be responsible
for any other Lender’s failure to make Loans as required.

 

(b) Type of Loans. Subject to Section 2.14, (i) each Syndicated Borrowing shall
be constituted entirely of ABR Loans or of Eurodollar Loans as the Borrower may
request in accordance herewith, and (ii) each Competitive Borrowing shall

 

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be constituted entirely of Eurodollar Loans or Fixed Rate Loans as the Borrower
may request in accordance herewith. Each Swingline Loan shall be an ABR Loan.
Each Lender at its option may make any Eurodollar Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan; provided that
any exercise of such option shall not affect the obligation of the Borrower to
repay such Loan in accordance with the terms of this Agreement.

 

(c) Minimum Amounts; Limitation on Number of Borrowings. Each Syndicated
Eurodollar Borrowing shall be in an aggregate amount of $5,000,000 or a larger
multiple of $1,000,000. Each Syndicated ABR Borrowing shall be in an aggregate
amount equal to $1,000,000 or a larger multiple of $1,000,000; provided that a
Syndicated ABR Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Commitments. Each Competitive Borrowing shall
be in an aggregate amount equal to $5,000,000 or a larger multiple of
$1,000,000. Each Swingline Loan shall be in an amount equal to $1,000,000 or a
larger multiple of $100,000. Borrowings of more than one Class and Type may be
outstanding at the same time; provided that there shall not at any time be more
than a total of 20 Syndicated Eurodollar Borrowings outstanding.

 

(d) Limitations on Interest Periods. Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request (or to elect to convert
to or continue as a Syndicated Eurodollar Borrowing) any Borrowing prior to the
Commitment Termination Date if the Interest Period requested therefor would end
after the Commitment Termination Date.

 

SECTION 2.03. Requests for Syndicated Borrowings.

 

(a) Notice by the Borrower. To request a Syndicated Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (i) in the
case of a Syndicated Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of the proposed Borrowing or (ii)
in the case of a Syndicated ABR Borrowing, not later than 11:00 a.m., New York
City time, one Business Day before the date of the proposed Borrowing; provided
that any such notice of a Syndicated ABR Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.06(e) may be given not later
than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower.

 

(b) Content of Borrowing Requests. Each telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:

 

(i) the aggregate amount of the requested Borrowing;

 

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

 

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

 

(iv) in the case of a Syndicated Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the term
“Interest Period” and permitted under Section 2.02(d); and

 

(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07.

 

(c) Notice by the Administrative Agent to the Lenders. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

(d) Failure to Elect. If no election as to the Type of a Syndicated Borrowing is
specified, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period is specified with respect to any requested Syndicated Eurodollar
Borrowing, then the requested Borrowing shall be made instead as a Syndicated
ABR Borrowing.

 

SECTION 2.04. Competitive Bid Procedure.

 

(a) Requests for Bids by the Borrower. Subject to the terms and conditions set
forth herein, from time to time during the Availability Period the Borrower may
request Competitive Bids and may (but shall not have any obligation to) accept
Competitive Bids and borrow Competitive Loans; provided that the sum of the
total Syndicated Loans plus the aggregate principal amount of outstanding
Competitive Loans plus the aggregate principal amount of outstanding Swingline
Loans at any time shall not exceed the total Commitments. To request Competitive
Bids, the Borrower shall notify the Administrative Agent of such request by
telephone, in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New
York City time, four Business Days before the date of the proposed Borrowing
and, in the case of a Fixed Rate Borrowing, not later than 10:00 a.m., New York
City time, one Business Day before the date of the proposed Borrowing; provided
that the Borrower may submit up to (but not more than) three Competitive Bid
Requests on the same day, but a Competitive Bid Request shall not be made within
five Business Days after the date of any previous Competitive Bid Request,
unless any and all such previous Competitive Bid Requests shall have been
withdrawn or all Competitive Bids received in response thereto rejected. Each
such telephonic Competitive Bid Request shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Competitive Bid
Request in a form approved by the Administrative Agent and signed by the
Borrower. Each such telephonic and written Competitive Bid Request shall specify
the following information in compliance with Section 2.02:

 

(i) the aggregate amount of the requested Borrowing;

 

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

 

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(iii) whether such Borrowing is to be a Eurodollar Borrowing or a Fixed Rate
Borrowing;

 

(iv) the Interest Period for such Borrowing, which shall be a period
contemplated by the definition of the term “Interest Period” and permitted under
Section 2.02(d); and

 

(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07.

 

Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.

 

(b) Making of Bids by Lenders. Each Lender may (but shall not have any
obligation to) make one or more Competitive Bids to the Borrower in response to
a Competitive Bid Request. Each Competitive Bid by a Lender must be in a form
approved by the Administrative Agent and must be received by the Administrative
Agent by telecopy, in the case of a Competitive Eurodollar Borrowing, not later
than 9:30 a.m., New York City time, three Business Days before the proposed date
of such Borrowing, and in the case of a Fixed Rate Borrowing, not later than
9:30 a.m., New York City time, on the proposed date of such Borrowing.
Competitive Bids that do not conform substantially to the form approved by the
Administrative Agent may be rejected by the Administrative Agent, and the
Administrative Agent shall notify the applicable Lender of such rejection as
promptly as practicable. Each Competitive Bid shall specify (i) the principal
amount (which shall be $5,000,000 or a larger multiple of $1,000,000 and which
may equal the entire principal amount of the Competitive Borrowing requested by
the Borrower) of the Competitive Loan or Loans that the Lender is willing to
make, (ii) the Competitive Bid Rate or Competitive Bid Rates at which the Lender
is prepared to make such Loan or Loans (expressed as a percentage rate per annum
in the form of a decimal to no more than four decimal places) and (iii) the
Interest Period for each such Loan and the last day thereof.

 

(c) Notification of Bids by Administrative Agent. The Administrative Agent shall
promptly notify the Borrower by telecopy of the Competitive Bid Rate and the
principal amount specified in each Competitive Bid and the identity of the
Lender that shall have made such Competitive Bid.

 

(d) Acceptance of Bids by the Borrower. Subject only to the provisions of this
paragraph, the Borrower may accept or reject any Competitive Bid. The Borrower
shall notify the Administrative Agent by telephone, confirmed by telecopy in a
form approved by the Administrative Agent, whether and to what extent it has
decided to accept or reject each Competitive Bid, in the case of a Competitive
Eurodollar Borrowing, not later than 10:30 a.m., New York City time, three
Business Days before the date of the proposed Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City time,
on the proposed date of the Competitive Borrowing; provided, that (i) (A) the
failure of the Borrower to give such

 

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notice shall be deemed to be a rejection of each Competitive Bid, (B) the
Borrower shall not accept a Competitive Bid made at a particular Competitive Bid
Rate if the Borrower rejects a Competitive Bid made at a lower Competitive Bid
Rate, (C) the aggregate amount of the Competitive Bids accepted by the Borrower
shall not exceed the aggregate amount of the requested Competitive Borrowing
specified in the related Competitive Bid Request, (D) to the extent necessary to
comply with clause (B) or (C) of this proviso, the Borrower may accept
Competitive Bids at the same Competitive Bid Rate in part, which acceptance, in
the case of multiple Competitive Bids at such Competitive Bid Rate, shall be
made pro rata in accordance with the amount of each such Competitive Bid, and
(E) except pursuant to clause (D) of this proviso, no Competitive Bid shall be
accepted for a Competitive Loan unless such Competitive Loan is in a principal
amount of $5,000,000 or a larger multiple of $1,000,000; and (ii) if a
Competitive Loan must be in an amount less than $5,000,000 because of the
provisions of clause (D) of the first proviso of this paragraph, such
Competitive Loan may be in an amount of $1,000,000 or any multiple thereof, and
in calculating the pro rata allocation of acceptances of portions of multiple
Competitive Bids at a particular Competitive Bid Rate pursuant to such clause
(D) the amounts shall be rounded to multiples of $1,000,000 in a manner
determined by the Borrower. A notice given by the Borrower pursuant to this
paragraph shall be irrevocable.

 

(e) Notification of Acceptances by the Administrative Agent. The Administrative
Agent shall promptly notify each bidding Lender by telecopy whether or not its
Competitive Bid has been accepted (and, if so, the amount and Competitive Bid
Rate so accepted), and each successful bidder will thereupon become bound,
subject to the terms and conditions hereof, to make the Competitive Loan in
respect of which its Competitive Bid has been accepted.

 

(f) Bids by the Administrative Agent. If the Administrative Agent shall elect to
submit a Competitive Bid in its capacity as a Lender, it shall submit such
Competitive Bid directly to the Borrower at least one quarter of an hour earlier
than the time by which the other Lenders are required to submit their
Competitive Bids to the Administrative Agent pursuant to paragraph (b) of this
Section.

 

SECTION 2.05. Swingline Loans.

 

(a) Agreement to Make Swingline Loans. Subject to the terms and conditions set
forth herein, the respective Swingline Lenders agrees to make Swingline Loans to
the Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $10,000,000
or (ii) the sum of the total Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans plus the aggregate principal
amount of outstanding Swingline Loans exceeding the total Commitments; provided
that the Swingline Lender shall not be required to make a Swingline Loan (i) to
refinance an outstanding Swingline Loan or (ii) on the last Business Day of any
calendar month. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.

 

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(b) Notice of Swingline Loans by the Borrower. To request a Swingline Loan, the
Borrower shall notify the Administrative Agent of such request by telephone
(confirmed by telecopy), not later than 12:00 noon, New York City time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and amount of
the requested Swingline Loan. The Administrative Agent will promptly advise the
Swingline Lenders of any such notice received from the Borrower. The Swingline
Lenders shall make each Swingline Loan available to the Borrower by means of a
credit to the general deposit account of the Borrower with the respective
Swingline Lender (or, in the case of a Swingline Loan made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(e), by
remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan.

 

(c) Participations by Lenders in Swingline Loans. The Swingline Lender may by
written notice given to the Administrative Agent not later than 10:00 a.m., New
York City time, on any Business Day require the Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans
outstanding. Such notice to the Administrative Agent shall specify the aggregate
amount of Swingline Loans in which Lenders will participate. Promptly upon
receipt of such notice, the Administrative Agent will give notice thereof to
each Lender, specifying in such notice such Lender’s Applicable Percentage of
such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above in this paragraph, to pay to
the Administrative Agent, for account of each Swingline Lender, such Lender’s
Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges
and agrees that its obligation to acquire participations in Swingline Loans
pursuant to this paragraph is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.07 with respect to Loans made by such Lender (and Section
2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the relevant Swingline Lender
the amounts so received by it from the Lenders. The Administrative Agent shall
notify the Borrower of any participations in any Swingline Loan acquired
pursuant to this paragraph, and thereafter payments in respect of such Swingline
Loan shall be made to the Administrative Agent and not to the relevant Swingline
Lender. Any amounts received by a Swingline Lender from the Borrower (or other
party on behalf of the Borrower) in respect of a Swingline Loan after receipt by
such Swingline Lender of the proceeds of a sale of participations therein shall
be promptly remitted to the Administrative Agent; any such amounts received by
the Administrative Agent shall be promptly remitted by the Administrative Agent
to the Lenders that shall have made their payments pursuant to this paragraph
and to the Swingline Lender, as their interests may appear; provided that any
such payment so remitted shall be repaid to the Swingline Lender or to the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.

 

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SECTION 2.06. Letters of Credit.

 

(a) General. Upon request of the Borrower, at any time and from time to time
during the Availability Period, the Issuing Lenders agree to issue Letters of
Credit for the account of the Borrower, in each case, subject to the terms and
conditions set forth herein. Each Letter of Credit shall be in a form reasonably
acceptable to the Administrative Agent and the relevant Issuing Bank. In the
event of any inconsistency between the terms and conditions of this Agreement
and the terms and conditions of any form of letter of credit application or
other agreement submitted by the Borrower to, or entered into by the Borrower
with, an Issuing Bank relating to any Letter of Credit, the terms and conditions
of this Agreement shall control.

 

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the relevant Issuing Bank) to an Issuing Bank and the
Administrative Agent (at least 2 Business Days in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this Section), the
amount of such Letter of Credit, the name and address of the beneficiary thereof
and such other information as shall be necessary to prepare, amend, renew or
extend such Letter of Credit. Subject to the terms and conditions hereof, the
Issuing Bank shall, on the requested date, issue, amend, renew or extend such
Letter of Credit for the account of the Borrower, provided that such Letter of
Credit shall not be issued, amended, renewed or extended unless (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$50,000,000 and (ii) the sum of the total Revolving Credit Exposures plus the
aggregate principal amount of outstanding Competitive Loans shall not exceed the
total Commitments. If requested by the Issuing Bank, the Borrower also shall
submit a letter of credit application on the Issuing Bank’s standard form in
connection with any request for a Letter of Credit.

 

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the Maturity Date.

 

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further

 

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action on the part of the relevant Issuing Bank or the Lenders, such Issuing
Bank hereby grants to each Lender, and each Lender hereby acquires from such
Issuing Bank, a participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to the Administrative
Agent, for the account of the relevant Issuing Bank, such Lender’s Applicable
Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed
by the Borrower on the date due as provided in paragraph (e) of this Section, or
of any reimbursement payment required to be refunded to the Borrower for any
reason. Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this 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 Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

 

(e) Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 12:00 noon, New York City time, on the date that such LC Disbursement
is made, if the Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., New York City time, on such date, or, if such notice has
not been received by the Borrower prior to such time on such date, then not
later than 12:00 noon, New York City time, on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
New York City time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided that, the Borrower
may, subject to the conditions to borrowing set forth herein (including the
conditions set forth in Section 2.02(c)), request in accordance with Section
2.03 or 2.05 that such payment be financed with a Syndicated ABR Borrowing or
Swingline Loan in an equivalent amount and, to the extent so financed, the
Borrower’s obligation to make such payment shall be discharged and replaced by
the resulting ABR Borrowing or Swingline Loan. If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.07 with respect to Loans made by such Lender
(and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Administrative Agent shall promptly pay to the relevant
Issuing Bank the amounts so received by it from the Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant to
this paragraph, the Administrative Agent shall distribute such payment to the
relevant Issuing Bank or, to the extent that Lenders have made payments pursuant
to this paragraph to reimburse the relevant Issuing Bank, then to such Lenders
and the relevant Issuing Bank as their

 

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interests may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse an Issuing Bank for any LC Disbursement (other than the funding of a
Syndicated ABR Loan or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.

 

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

 

(g) Disbursement Procedures. An Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for

 

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payment under a Letter of Credit. Such Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.

 

(h) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to Syndicated ABR Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(e) of this Section, then Section 2.13(d) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.

 

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

 

(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than 50% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in cash equal to the LC Exposure as of such date plus any
accrued and unpaid interest and fees thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with

 

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respect to the Borrower described in clause (h) or (i) of Article VII. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement and, in
that connection, the Borrower hereby grants to the Administrative Agent for the
benefit of the Lenders a security interest in such account (and in all funds and
other assets held in such account) as collateral security for the obligations of
the Borrower in respect of such LC Exposure and the other obligations of the
Borrower to the Lenders and the Administrative Agent hereunder. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account.

 

Moneys in such account shall be applied by the Administrative Agent to reimburse
the Issuing Banks for LC Disbursements for which they have not been reimbursed
and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.

 

(k) Defeasance. In the event that the Borrower wishes to refinance in full prior
to the Commitment Termination Date all of the Indebtedness incurred under this
Agreement, then the Borrower may defease its obligations in respect of such
Letters of Credit by depositing into an account with the Administrative Agent,
in the name of the Administrative Agent and for the benefit of the Lenders, an
amount in cash equal to 105% of the LC Exposure on such date. Such deposit shall
be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement and, in that
connection, the Borrower hereby grants to the Administrative Agent for the
benefit of the Lenders a security interest in such account (and in all funds and
other assets held in such account) as collateral security for the obligations of
the Borrower in respect of such LC Exposure. The Administrative Agent shall have
exclusive dominion and control, including the exclusive right of withdrawal,
over such account. Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of
the Administrative Agent and at the Borrower’s risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account.

 

Moneys in such account shall be applied by the Administrative Agent to reimburse
the Issuing Banks for LC Disbursements for which they have not been reimbursed
and, to the extent not so applied, shall be held for the satisfaction of the

 

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reimbursement obligations of the Borrower for the LC Exposure at such time. Such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all outstanding Letters of Credit have
expired or terminated and all LC Exposure paid in full.

 

SECTION 2.07. Funding of Borrowings.

 

(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders;
provided that Swingline Loans shall be made as provided in Section 2.05. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request or Competitive Bid Request;
provided that Syndicated ABR Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the relevant Issuing Bank.

 

(b) Presumption by the Administrative Agent. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Loan included in such Borrowing.

 

SECTION 2.08. Interest Elections.

 

(a) Elections by the Borrower for Syndicated Borrowings. The Loans constituting
each Syndicated Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Syndicated Eurodollar
Borrowing, shall have the Interest Period specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a Borrowing of a
different Type or to continue such Borrowing as a Borrowing of the same Type
and, in the case of a Syndicated Eurodollar Borrowing, may elect the Interest
Period therefor, all as provided in this Section. The Borrower may elect
different options with respect to different

 

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portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans constituting such
Borrowing, and the Loans constituting each such portion shall be considered a
separate Borrowing. This Section shall not apply to Competitive Borrowings or
Swingline Borrowings, which may not be converted or continued.

 

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

 

(c) Content of Interest Election Requests. Each telephonic and written Interest
Election Request shall specify the following information in compliance with
Section 2.02:

 

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

 

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

 

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

 

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
therefor after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period” and permitted under
Section 2.02(d).

 

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

 

(e) Failure to Elect; Events of Default. If the Borrower fails to deliver a
timely and complete Interest Election Request with respect to a Syndicated
Eurodollar Borrowing prior to the end of the Interest Period therefor, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to a Syndicated ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as

 

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an Event of Default is continuing (i) no outstanding Syndicated Borrowing may be
converted to or continued as a Syndicated Eurodollar Borrowing and (ii) unless
repaid, each Syndicated Eurodollar Borrowing shall be converted to a Syndicated
ABR Borrowing at the end of the Interest Period therefor.

 

SECTION 2.09. Termination and Reduction of the Commitments.

 

(a) Scheduled Termination. Unless previously terminated, the Commitments shall
terminate at the close of business on the Commitment Termination Date.

 

(b) Voluntary Termination or Reduction. The Borrower may at any time terminate,
or from time to time reduce, the Commitments; provided that (i) each reduction
of the Commitments shall be in an amount that is $10,000,000 or a larger
multiple of $5,000,000 and (ii) the Borrower shall not terminate or reduce the
Commitments if, after giving effect to any concurrent prepayment of the
Syndicated Loans in accordance with Section 2.11, the sum of the total
Syndicated Loans plus the aggregate principal amount of outstanding Competitive
Loans would exceed the total Commitments.

 

(c) Notice of Voluntary Termination or Reduction. The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Commitments
under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and
the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable;
provided that a notice of termination of the Commitments delivered by the
Borrower may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied.

 

(d) Effect of Termination or Reduction. Any termination or reduction of the
Commitments shall be permanent. Each reduction of the Commitments shall be made
ratably among the Lenders in accordance with their respective Commitments.

 

SECTION 2.10. Repayment of Loans; Evidence of Debt.

 

(a) Repayment. The Borrower hereby unconditionally promises to pay the Loans as
follows:

 

(i) to the Administrative Agent for account of the Lenders, the then unpaid
principal amount of the Syndicated Loans on the Commitment Termination Date;

 

(ii) to the Administrative Agent for account of the respective Lender, the then
unpaid principal amount of each Competitive Loan of such Lender on the last day
of the Interest Period therefor and

 

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(iii) to each Swingline Lender the then unpaid principal amount of each
Swingline Loan made by such Swingline Lender on the earlier of the Commitment
Termination Date and the first Business Day which is 15 days after such
Swingline Loan is made; provided that (A) on each date that a Syndicated
Borrowing or Competitive Borrowing is made, the Borrower shall repay all
Swingline Loans then outstanding; and (B) on the last Business Day of any
calendar month the Borrower shall repay all Swingline Loans then outstanding in
an aggregate amount in excess of $5,000,000.

 

(b) Manner of Payment. Prior to any repayment or prepayment of any Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be paid and
shall notify the Administrative Agent by telephone (confirmed by telecopy) of
such selection not later than 11:00 a.m., New York City time, three Business
Days before the scheduled date of such repayment; provided that each repayment
of Borrowings shall be applied to repay any outstanding ABR Borrowings before
any other Borrowings. If the Borrower fails to make a timely selection of the
Borrowing or Borrowings to be repaid or prepaid, such payment shall be applied,
first, to pay any outstanding ABR Borrowings and, second, to other Borrowings in
the order of the remaining duration of their respective Interest Periods (the
Borrowing with the shortest remaining Interest Period to be repaid first), and
for these purposes, Competitive Loans shall be deemed to be in the same Class as
Syndicated Loans. Each payment of a Syndicated Borrowing shall be applied
ratably to the Loans included in such Borrowing.

 

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

 

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

 

(e) Effect of Entries. The entries made in the records maintained pursuant to
paragraph (c) or (d) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such records or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.

 

(f) Promissory Notes. Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form

 

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approved by the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

 

SECTION 2.11. Prepayment of Loans.

 

(a) Right to Prepay Borrowings. The Borrower shall have the right at any time
and from time to time to prepay any Borrowing in whole or in part, subject to
the requirements of this Section (provided that the Borrower shall not have the
right to prepay any Competitive Loan without the prior consent of the Lender
thereof).

 

(b) Notices, Etc. The Borrower shall notify the Administrative Agent (and, in
the case of a prepayment of a Swingline Loan, the relevant Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Syndicated Eurodollar Borrowing or of a Competitive Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before the
date of prepayment, (ii) in the case of prepayment of an ABR Borrowing, not
later than 11:00 a.m., New York City time, one Business Day before the date of
prepayment or (iii) in the case of prepayment of a Swingline Loan, not later
than 12:00 noon New York City time, on the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by Section 2.09, then such notice
of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09. Promptly following receipt of any such notice
relating to a Syndicated Borrowing or Competitive Borrowing, the Administrative
Agent shall advise the relevant Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in the
case of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Syndicated Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13 and shall be made in the manner
specified in Section 2.10(b).

 

SECTION 2.12. Fees.

 

(a) Facility Fee. The Borrower agrees to pay to the Administrative Agent for
account of each Lender a facility fee, which shall accrue at the Applicable Rate
on the amount of the Commitment of such Lender (whether used or unused) during
the period from and including the date hereof to but excluding the later of the
date such Commitment terminates and the date such Lender’s Loans shall have been
paid in full; provided that, if such Lender continues to have any Revolving
Credit Exposure after its Commitment terminates, then such facility fee shall
continue to accrue on the amount of such Lender’s Revolving Credit Exposure from
and including the date on which its Commitment terminates to but excluding the
date on which such Lender ceases to have any Revolving Credit Exposure. Accrued
facility fees shall be payable on each Quarterly

 

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Date and on the later of the date the Commitments terminate and the date upon
which the Loans of all of the Lenders shall have been paid in full, provided
that (i) any facility fees accruing after the date on which the Commitments
terminate shall be payable on demand, and (ii) if any principal of any Loan is
not paid when due, whether at stated maturity, upon acceleration or otherwise,
the facility fee in respect of such principal shall be payable on demand. All
facility fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

 

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

 

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

 

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

 

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SECTION 2.13. Interest.

 

(a) ABR Loans. The Loans constituting each ABR Borrowing (including each
Swingline Loan) shall bear interest at a rate per annum equal to the Alternate
Base Rate plus the Applicable Rate.

 

(b) Eurodollar Loans. The Loans constituting each Eurodollar Borrowing shall
bear interest at a rate per annum equal to (i) in the case of a Syndicated
Eurodollar Borrowing, the Adjusted LIBO Rate for the Interest Period for such
Borrowing plus the Applicable Rate, or (ii) in the case of a Competitive
Eurodollar Borrowing, the LIBO Rate for the Interest Period for such Borrowing
plus (or minus, as applicable) the Margin applicable to such Loan.

 

(c) Fixed Rate Loans. Each Fixed Rate Loan shall bear interest at a rate per
annum equal to the Fixed Rate applicable to such Loan.

 

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

 

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

 

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

 

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SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of the
Interest Period for any Eurodollar Borrowing:

 

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

 

(b) the Administrative Agent is advised by the Required Lenders (or, in the case
of a Competitive Eurodollar Borrowing, any Lender that is required to make a
Loan included in such Borrowing) that the Adjusted LIBO Rate (in the case of a
Syndicated Eurodollar Borrowing) or the LIBO Rate (in the case of a Competitive
Eurodollar Borrowing) for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
respective Loans (or its Loan) included in such Borrowing for such Interest
Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Syndicated Borrowing to, or
the continuation of any Syndicated Borrowing as, a Syndicated Eurodollar
Borrowing shall be ineffective and such Syndicated Borrowing (unless prepaid)
shall be continued as, or converted to, a Syndicated ABR Borrowing, (ii) if any
Borrowing Request requests a Syndicated Eurodollar Borrowing, such Borrowing
shall be made as a Syndicated ABR Borrowing and (iii) any request by the
Borrower for a Competitive Eurodollar Borrowing shall be ineffective; provided
that if the circumstances giving rise to such notice do not affect all the
Lenders, then requests by the Borrower for Competitive Eurodollar Borrowings may
be made to Lenders that are not affected thereby.

 

SECTION 2.15. Increased Costs.

 

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

 

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

 

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

 

and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or such Issuing

 

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Bank of participating in issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.

 

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

 

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

 

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

 

(e) Competitive Loans. Notwithstanding the foregoing provisions of this Section
2.15, a Lender shall not be entitled to compensation pursuant to this Section
2.15 in respect of any Competitive Loan if the Change in Law that would
otherwise entitle it to such compensation shall have been publicly announced
prior to submission of the Competitive Bid pursuant to which such Loan was made.

 

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SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan or Fixed Rate Loan other than on the last day
of an Interest Period therefor (including as a result of an Event of Default),
(b) the conversion of any Syndicated Eurodollar Loan other than on the last day
of an Interest Period therefor, (c) the failure to borrow, convert, continue or
prepay any Syndicated Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice is permitted to be revocable
under Section 2.11(b) and is revoked in accordance herewith), (d) the failure to
borrow any Competitive Loan after accepting the Competitive Bid to make such
Loan, or (e) the assignment as a result of a request by the Borrower pursuant to
Section 2.19 of any Syndicated Eurodollar Loan other than on the last day of an
Interest Period therefor or of any Competitive Loan, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, the loss to any
Lender attributable to any such event shall be deemed to include an amount
determined by such Lender to be equal to the excess, if any, of (i) the amount
of interest that such Lender would pay for a deposit equal to the principal
amount of such Loan for the period from the date of such payment, conversion,
failure or assignment to the last day of the then current Interest Period for
such Loan (or, in the case of a failure to borrow, convert or continue, the
duration of the Interest Period that would have resulted from such borrowing,
conversion or continuation) if the interest rate payable on such deposit were
equal to the Adjusted LIBO Rate (in the case of a Syndicated Eurodollar Loan) or
the LIBO Rate (in the case of a Competitive Eurodollar Loan) for such Interest
Period, over (ii) the amount of interest that such Lender would earn on such
principal amount for such period if such Lender were to invest such principal
amount for such period at the interest rate that would be bid by such Lender (or
an affiliate of such Lender) for Dollar deposits from other banks in the
eurodollar market at the commencement of such period. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.

 

SECTION 2.17. Taxes.

 

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

 

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

 

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

 

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

 

(e) Foreign Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate.

 

SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

 

(a) Payments by the Borrower. The Borrower shall make each payment required to
be made by it hereunder (whether of principal, interest, fees or reimbursement
of LC Disbursements, or amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to the Issuing Banks or
Swingline Lenders as expressly provided herein and payments pursuant to Sections
2.15,

 

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2.16, 2.17 and 9.03, which shall be made directly to the Persons entitled
thereto. The Administrative Agent shall distribute any such payments received by
it for account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars.

 

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

 

(c) Pro Rata Treatment. Except to the extent otherwise provided herein: (i) each
Syndicated Borrowing shall be made from the Lenders, each payment of fees for
account of the Lenders under Section 2.12 shall be made for account of the
Lenders, and each termination or reduction of the amount of the Commitments
under Section 2.09 shall be applied to the respective Commitments of the
Lenders, pro rata according to the amounts of their respective Commitments; (ii)
each Syndicated Borrowing shall be allocated pro rata among the Lenders
according to the amounts of their respective Commitments (in the case of the
making of Syndicated Loans) or their respective Loans that are to be included in
such Borrowing (in the case of conversions and continuations of Loans); (iii)
each payment or prepayment of principal of Syndicated Loans by the Borrower
shall be made for account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of the Syndicated Loans held by them; and
(iv) each payment of interest on Syndicated Loans by the Borrower shall be made
for account of the Lenders pro rata in accordance with the amounts of interest
on such Loans then due and payable to the respective Lenders.

 

(d) Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Syndicated Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Syndicated Loans or
participations in LC Disbursements and Swingline Loans and accrued interest
thereon then due than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Syndicated Loans and participations in LC Disbursements
and Swingline Loans of other Lenders to the extent necessary so that the benefit
of all such payments shall be shared by the Lenders ratably in accordance with
the aggregate amount of principal of and accrued interest on their respective
Syndicated Loans and participations in LC Disbursements and Swingline Loans;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and

 

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the purchase price restored to the extent of such recovery, without interest,
and (ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.

 

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

 

(f) Certain Deductions by the Administrative Agent. If any Lender shall fail to
make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d),
2.07(b) or 2.18(e), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for account of such Lender to satisfy such
Lender’s obligations under such Sections until all such unsatisfied obligations
are fully paid.

 

SECTION 2.19. Mitigation Obligations; Replacement of Lenders.

 

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

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(b) Replacement of Lenders. If any Lender requests compensation under Section
2.15, or if the Borrower is required to pay any additional amount to any Lender
or any Governmental Authority for account of any Lender pursuant to Section
2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
(other than any outstanding Competitive Loans held by it) to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent (and, if a Commitment is being
assigned, the Issuing Banks and the Swingline Lenders), which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans (other than Competitive
Loans) and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to apply.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Lenders that:

 

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

 

SECTION 3.02. Authorization; Enforceability. The Transactions are within the
Borrower’s corporate powers and have been duly authorized by all necessary
corporate and, if required, by all necessary shareholder action. This Agreement
has been duly executed and delivered by the Borrower and constitutes, and each
of the other Loan Documents when executed and delivered will constitute, a
legal, valid and binding

 

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obligation of the Borrower, enforceable in accordance with its terms, except as
such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors’ rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

 

SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except (i) such as have been obtained or
made and are in full force and effect, or (ii) as may be required to be filed
with the Securities & Exchange Commission after the date hereof, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order
of any Governmental Authority, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any of
its Subsidiaries or assets, or give rise to a right thereunder to require any
payment to be made by any such Person, and (d) will not result in the creation
or imposition of any Lien (other than any Lien which may be created pursuant to
Section 2.06(j) or (k) hereof) on any asset of the Borrower or any of its
Subsidiaries.

 

SECTION 3.04. Financial Condition; No Material Adverse Change.

 

(a) Financial Condition. The Borrower has heretofore furnished to the Lenders
(i) its consolidated balance sheet and statements of income, stockholders’
equity and cash flows as of and for the fiscal year ended December 31, 2004,
reported on by KPMG LLP, independent public accountants and (ii) its
consolidated balance sheet and statements of income, stockholders’ equity and
cash flows as of and for the fiscal quarter and the portion of the fiscal year
ended June 30, 2005, certified by the chief financial officer of the Borrower.
Such financial statements present fairly, in all material respects, the actual
or pro forma, as the case may be, financial position and results of operations
and cash flows of the Borrower and its Subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments and
the absence of footnotes in the case of the statements referred to in clause
(ii) of the first sentence of this paragraph. None of the Borrower nor any of
its Subsidiaries has on the date hereof any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in said balance sheet as at June 30, 2005.

 

(b) No Material Adverse Change. Since June 30, 2005, there has been no material
adverse change in the business, assets, properties, operations, prospects or
condition, financial or otherwise, of the Borrower and its Subsidiaries, taken
as a whole.

 

SECTION 3.05. Properties.

 

(a) Property Generally. Each of the Borrower and its Subsidiaries has good title
to, or valid leasehold interests in, all its real and personal property material
to their businesses, taken as a whole, subject only to Liens permitted by
Section 6.01 and

 

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except for minor defects in title that do not interfere with its ability to
conduct such businesses as currently conducted or to utilize such properties for
their intended purposes.

 

(b) Intellectual Property. Each of the Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to their businesses, taken as a whole, and the
use thereof by the Borrower and its Subsidiaries does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

 

SECTION 3.06. Litigation and Environmental Matters.

 

(a) Actions, Suits and Proceedings. There are no actions, suits or proceedings
by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
of its Subsidiaries (i) could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.

 

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

 

(c) Disclosed Matters. Since the date of this Agreement, there has been no
change in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.

 

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

 

SECTION 3.08. Investment and Holding Company Status. Neither the Borrower nor
any of its Subsidiaries is (a) an “investment company” as defined in, or subject
to regulation under, the Investment Company Act of 1940 or (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.

 

SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely filed
or caused to be filed all Tax returns and reports required to have been filed
and has paid or caused to be paid all Taxes required to have been paid by it,
except

 

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(a) Taxes that are being contested in good faith by appropriate proceedings and
for which such Person has set aside on its books adequate reserves or (b) to the
extent that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

 

SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.

 

SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

 

SECTION 3.12. Use of Credit. Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying Margin Stock, and after applying the proceeds of any
extension of credit hereunder, not more than 25% of the fair market value of the
assets of the Borrower and its Subsidiaries consists of Margin Stock.

 

SECTION 3.13. Certain Agreements and Liens.

 

(a) Certain Agreements. Part A of Schedule II is a complete and correct list of
each credit agreement, loan agreement, indenture, purchase agreement, guarantee,
letter of credit or other arrangement providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any extension of
credit) to, or guarantee by, the Borrower or any of its Subsidiaries outstanding
on the date hereof the aggregate principal or face amount of each of which
equals or exceeds (or may equal or exceed) $10,000,000, and the aggregate
principal or face amount outstanding or that may become outstanding under each
such arrangement is correctly described in Part A of Schedule II.

 

(b) Liens. Part B of Schedule II is a complete and correct list of each Lien
securing Indebtedness of any Person outstanding on the date hereof the aggregate
principal or face amount of which equals or exceeds (or may equal or exceed)
$10,000,000 and covering any property of the Borrower or any of its
Subsidiaries, and the aggregate Indebtedness secured (or that may be secured) by
each such Lien and the property covered by each such Lien is correctly described
in Part B of Schedule II.

 

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SECTION 3.14. Subsidiaries. Set forth in Schedule V is a complete and correct
list of all of the Subsidiaries of the Borrower as of the date hereof, together
with, for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each Person holding ownership interests in such Subsidiary and
(iii) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule V, on the date hereof, (x) each of
the Borrower and its Subsidiaries owns, free and clear of Liens, and has the
unencumbered right to vote, all outstanding ownership interests in each Person
shown to be held by it in Schedule V, (y) all of the issued and outstanding
capital stock of each such Person organized as a corporation is validly issued,
fully paid and nonassessable and (z) there are no outstanding Equity Rights with
respect to such Person.

 

SECTION 3.15. Deferred Compensation and Incentive Plans. The Borrower has
heretofore delivered to the Lenders complete and correct copies of its Deferred
Compensation Plan, 2005 Omnibus Incentive Plan and 1998 Director Stock Plan,
each as in effect on the date hereof.

 

ARTICLE IV

 

CONDITIONS

 

SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and
of the Issuing Banks to issue Letters of Credit hereunder shall not become
effective until the date on which the Administrative Agent shall have received
each of the following documents, each of which shall be satisfactory to the
Administrative Agent (and to the extent specified below, to each Lender) in form
and substance (or such condition shall have been waived in accordance with
Section 9.02):

 

(a) Executed Counterparts. From each party hereto either (i) a counterpart of
this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page to this Agreement) that such party has
signed a counterpart of this Agreement.

 

(b) Opinion of Counsel to the Borrower. A favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of Cox
Smith Mathews Incorporated, counsel for the Borrower, substantially in the form
of Exhibit B, and covering such other matters relating to the Borrower, this
Agreement or the Transactions as the Required Lenders shall reasonably request
(and the Borrower hereby instructs such counsel to deliver such opinion to the
Lenders and the Administrative Agent).

 

(c) Opinion of Special New York Counsel to JPMCB. An opinion, dated the
Effective Date, of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel
to JPMCB, substantially in the form of Exhibit C (and JPMCB hereby instructs
such counsel to deliver such opinion to the Lenders).

 

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(d) Corporate Documents. Such documents and certificates as the Administrative
Agent or its counsel may reasonably request relating to the organization,
existence and good standing of the Borrower, the authorization of the
Transactions and any other legal matters relating to the Borrower, this
Agreement or the Transactions, all in form and substance satisfactory to the
Administrative Agent and its counsel.

 

(e) Officer’s Certificate. A certificate, dated the Effective Date and signed by
the President, a Vice President or a Financial Officer of the Borrower,
confirming (i) compliance with the conditions set forth in the lettered clauses
of the first sentence of Section 4.02, (ii) that the Leverage Ratio does not
exceed 3.00 to 1 and (iii) that the Interest Coverage Ratio is not less than
2.75 to 1.

 

(f) Termination of Existing Credit Agreements. The Administrative Agent shall
have received evidence that, on or prior to the Effective Date, the Borrower
shall have (i) repaid in full the outstanding principal amount of the “Loans”
under and as defined in the Three Year Credit Agreement dated as of October 18,
2002, as amended, between the Borrower, the Lenders and JPMCB, as Administrative
Agent, in each case together with all accrued and unpaid interest thereon, all
fees payable in respect thereof and all other amounts payable thereunder and
(ii) canceled each of the “Commitments” as defined in said Credit Agreement.

 

(g) Other Documents. Such other documents as the Administrative Agent or any
Lender or special New York counsel to JPMCB may reasonably request.

 

The obligation of any Lender to make its initial extension of credit hereunder
is also subject to the payment by the Borrower of such fees as the Borrower
shall have agreed to pay to any Lender or the Administrative Agent in connection
herewith, including the reasonable fees and expenses of Milbank, Tweed, Hadley &
McCloy LLP, special New York counsel to JPMCB, in connection with the
negotiation, preparation, execution and delivery of this Agreement and the
extensions of credit hereunder (to the extent that statements for such fees and
expenses have been delivered to the Borrower).

 

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Banks to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to Section
9.02) on or prior to 3:00 p.m., New York City time, on August 12, 2005 (and, in
the event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).

 

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SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of the Issuing Banks to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:

 

(a) the representations and warranties of the Borrower set forth in this
Agreement shall be true and correct on and as of the date of such Borrowing or
the date of issuance, amendment, renewal or extension of such Letter of Credit,
as applicable; and

 

(b) at the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

 

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in the preceding
sentence.

 

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and, unless defeased in accordance with Section 2.06(k), all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the Lenders that:

 

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

 

(a) promptly, but in any event no later than 90 days after the end of each
fiscal year of the Borrower, the audited consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows of the Borrower
and its Subsidiaries as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, prepared in
accordance with GAAP consistently applied (the ”Annual Report”), all reported on
by KPMG LLP or other independent public accountants of recognized national
standing (without a “going concern” or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;

 

(b) promptly, but in any event no later than 45 days after the end of each of
the first three fiscal quarters of each fiscal year of the Borrower, the
consolidated balance sheet and related statements of operations, stockholders’

 

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equity and cash flows of the Borrower and its Subsidiaries as of the end of and
for such fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding period
or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year (the “Quarterly Report”), all certified by one of its
Financial Officers as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;

 

(c) concurrently with any delivery of financial statements under clause (a) or
(b) of this Section, a certificate of the Chief Executive Officer and Chief
Financial Officer of the Borrower (i) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Section 6.06 and
(iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;

 

(d) concurrently with any delivery of financial statements under clause (a) of
this Section, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);

 

(e) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Borrower or
any of its Subsidiaries with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and

 

(f) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
of its Subsidiaries, or compliance with the terms of this Agreement and the
other Loan Documents, as the Administrative Agent or any Lender may reasonably
request.

 

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

 

(a) the occurrence of any Default;

 

(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Borrower or
any of its Affiliates that could reasonably be expected to result in a Material
Adverse Effect;

 

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(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;

 

(d) the assertion of any environmental matter by any Person against, or with
respect to the activities of, the Borrower or any of its Subsidiaries and any
alleged violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations, other than any environmental matter or
alleged violation that (either individually or in the aggregate) could not
reasonably be expected to have a Material Adverse Effect; and

 

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

 

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

 

SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.02.

 

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

 

SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.

 

SECTION 5.06. Books and Records; Inspection Rights. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account

 

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in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.

 

SECTION 5.07. Compliance with Laws. The Borrower will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority, including, but not limited to, Environmental Laws
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

 

ARTICLE VI

 

NEGATIVE COVENANTS

 

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and, unless defeased in accordance with Section 2.06(k), all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the Lenders that:

 

SECTION 6.01. Liens. The Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
such income or revenues, except:

 

(a) Permitted Encumbrances;

 

(b) any Lien on any property or asset of the Borrower or any of its Subsidiaries
existing on the date hereof and set forth in Part B of Schedule II (or, to the
extent not meeting the minimum thresholds for required listing on Schedule II
pursuant to Section 3.13 and not otherwise listed in said Schedule II, (in a
footnote or otherwise), in an aggregate amount not exceeding $10,000,000);
provided that (i) no such Lien shall extend to any other property or asset of
the Borrower or any of its Subsidiaries and (ii) any such Lien shall secure only
those obligations which it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal amount
thereof;

 

(c) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower or any Subsidiary or existing on any property or asset of any
Person that becomes a Subsidiary after the date hereof prior to the time such

 

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Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;

 

(d) Liens on assets acquired, constructed or improved by the Borrower or any
Subsidiary (including Liens created pursuant to Capital Lease Obligations);
provided that (i) such security interests and the Indebtedness secured thereby
are incurred prior to or within 365 days after such acquisition or the
completion of such construction or improvement, (ii) the Indebtedness secured
thereby does not exceed the cost of acquiring, constructing or improving such
assets, (iii) such security interests shall not apply to any other property or
assets of the Borrower or any Subsidiary and (iv) the aggregate principal amount
of Indebtedness secured by all such security interests under this paragraph (d)
shall not exceed $50,000,000;

 

(e) set-off rights arising with respect to intercompany claims between the
Borrower and one or more of its Subsidiaries against the Borrower and one or
more other Subsidiaries;

 

(f) Liens created pursuant to Section 2.06(j) or (k) hereof;

 

(g) normal and customary set-off rights and bankers’ liens with respect to
deposit accounts; and

 

(h) Liens not otherwise permitted by the foregoing clauses of this Section 6.01
securing Indebtedness not in excess of $1,000,000 at any time outstanding.

 

SECTION 6.02. Fundamental Changes.

 

(a) Mergers, Consolidations, Disposal of Assets, Etc. The Borrower will not, nor
will it permit any of its Subsidiaries to, merge into or consolidate with any
other Person, or permit any other Person to merge into or consolidate with it,
or sell, transfer, lease or otherwise dispose of (in one transaction or in a
series of transactions) any of its assets, or any of the stock of any of its
Subsidiaries (in each case, whether now owned or hereafter acquired), if the
effect of any such sale of assets or stock or merger or consolidation would be
to sell, transfer, lease or otherwise dispose of all or substantially all of the
assets of the Borrower and its Subsidiaries (taken as a whole) or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing;

 

(i) any Person may merge into or consolidate with the Borrower in a transaction
in which the Borrower is the surviving corporation;

 

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(ii) any Person may merge into or consolidate with any Subsidiary in a
transaction in which the surviving entity is a Subsidiary; provided that if any
such merger shall be between a Subsidiary and a wholly owned Subsidiary, then
the wholly owned Subsidiary shall be the continuing or surviving corporation;

 

(iii) the Borrower may merge into or consolidate with any other Person in a
transaction in which such Person is the surviving entity so long as (x) such
Person assumes all of the obligations of the Borrower under this Agreement by an
instrument in form and substance reasonably satisfactory to the Administrative
Agent and (y) such Person delivers such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as is consistent with those
delivered by the Borrower pursuant to Section 4.01 on the Effective Date or as
the Administrative Agent shall have reasonably requested;

 

(iv) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets
to the Borrower or to another Subsidiary; and

 

(v) any Subsidiary may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders.

 

(b) Lines of Business. The Borrower will not, nor will it permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.

 

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SECTION 6.03. Sale and Leasebacks. The Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly, become or thereafter remain
liable as lessee or as guarantor or other surety with respect to the lessee’s
obligations under any lease, whether an operating lease or a capital lease, of
any property (whether real or personal or mixed) whether now owned or hereafter
acquired, (a) which the Borrower or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person or (b) which the
Borrower or any such Subsidiary intends to use for substantially the same
purpose as any other property which has been or is to be sold or transferred by
the Borrower or any such Subsidiary to any Person in connection with such lease,
if in the case of clause (a) or (b) above, such sale and such lease are part of
the same transaction or a series of related transactions or are with the same
other Person; provided that the Borrower or any Subsidiary may enter into any
such transaction so long as the sale price of all such transactions does not
exceed $20,000,000 in the aggregate during the term of this Agreement.

 

SECTION 6.04. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except

 

(a) transactions in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties,

 

(b) transactions between or among the Borrower and its Subsidiaries not
involving any other Affiliate,

 

(c) loans to employees of the Borrower or any Subsidiary for relocation expenses
or other purposes; provided that the aggregate outstanding principal amount of
the loans permitted under this clause (c) shall not exceed $3,000,000 at any one
time,

 

(d) customary obligations to directors and officers of the Borrower and its
Subsidiaries in respect of indemnification and reimbursement of expenses,

 

(e) the payment of customary fees (in the form of cash, stock options or stock)
to directors of the Borrower,

 

(f) the payment of compensation to officers of the Borrower approved by the
Board of Directors of the Borrower, and the payment of deferred compensation to
officers of the Borrower pursuant to the Harte-Hanks, Inc. Deferred Compensation
Plan (including any amendments, modifications or replacements thereof; provided
that such amendment, modification or replacement does not substantially change
the character of such deferred compensation program),

 

(g) the payment of bonuses to officers and directors of the Borrower approved by
the Board of Directors of the Borrower,

 

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(h) the issuance of stock of the Borrower and of options to purchase stock of
the Borrower pursuant to the Harte-Hanks 2005 Omnibus Incentive Plan, (including
any amendments, modifications or replacements thereof; provided that such
amendment, modification or replacement does not substantially change the
character of such stock option program), and

 

(i) the purchase of stock of the Borrower and of options to purchase stock of
the Borrower pursuant to the Borrower’s stock repurchase program that was
publicly announced in January 1997.

 

SECTION 6.05. Subsidiary Indebtedness. The Borrower will not permit the
aggregate principal amount of Indebtedness of its Subsidiaries (excluding any
Indebtedness of a Subsidiary owed to the Borrower or another Subsidiary, but
including any Guarantee by a Subsidiary of Indebtedness of the Borrower) at any
time to exceed $20,000,000.

 

SECTION 6.06. Certain Financial Covenants.

 

(a) Leverage Ratio. The Borrower will not permit the Leverage Ratio to exceed
3.00 to 1 at any time during the term of this Agreement.

 

(b) Interest Coverage Ratio. The Borrower will not permit the Interest Coverage
Ratio to be less than 2.75 to 1 at any time during the term of this Agreement.

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

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

 

(b) the Borrower shall fail to pay any interest on any Loan, any facility fee,
any fronting fee or any participation fee payable under this Agreement or any
other Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three or more Business Days;
or the Borrower shall fail to pay any other amount (other than an amount
referred to in clause (a) of this Article) payable under this Agreement or any
other Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of thirty or more days;

 

(c) any representation or warranty made or deemed made by or on behalf of the
Borrower or any of its Subsidiaries in or in connection with this Agreement or
any other Loan Document or any amendment or modification hereof or thereof,

 

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or in any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any other Loan Document or
any amendment or modification hereof or thereof, shall prove to have been
incorrect in any material respect when made or deemed made;

 

(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in Section 5.02(a) or 5.03 (with respect to the Borrower’s
existence) or in Article VI;

 

(e) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement or any other Loan Document (other than
those specified in clause (a), (b) or (d) of this Article) and such failure
shall continue unremedied for a period of 30 or more days after notice thereof
from the Administrative Agent to the Borrower;

 

(f) the Borrower or any of its Material Subsidiaries shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable
(whether at stated maturity or on acceleration);

 

(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, but without any further lapse of time) the holder
or holders of any Material Indebtedness or any trustee or agent on its or their
behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to (i) secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness or (ii) the voluntary
prepayment of any Indebtedness that is not then otherwise due or required to be
prepaid pursuant to its terms;

 

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

 

(i) the Borrower or any of its Material Subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or

 

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petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any of its Material Subsidiaries or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;

 

(j) the Borrower or any of its Material Subsidiaries shall become unable, admit
in writing its inability or fail generally to pay its debts as they become due;

 

(k) one or more judgments for the payment of money in an aggregate amount in
excess of $20,000,000 shall be rendered against the Borrower or any of its
Material Subsidiaries or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Borrower or any of its
Material Subsidiaries to enforce any such judgment;

 

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

 

(m) there shall have been asserted against the Borrower or any of its
Subsidiaries any claims or liabilities, whether accrued, absolute or contingent,
based on or arising from the generation, storage, transport, handling or
disposal of Hazardous Materials by the Borrower or any of its Subsidiaries that,
in the judgment of the Required Lenders, are reasonably likely to be determined
adversely to the Borrower or any of its Subsidiaries, and the amount thereof
(either individually or in the aggregate) is reasonably likely to have a
Material Adverse Effect (insofar as such amount is payable by the Borrower or
any of its Subsidiaries but after deducting any portion thereof that is
reasonably expected to be paid by other creditworthy Persons jointly and
severally liable therefor); or

 

(n) a Change in Control shall occur;

 

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind,

 

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all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.

 

ARTICLE VIII

 

THE ADMINISTRATIVE AGENT

 

Each of the Lenders and the Issuing Banks hereby irrevocably appoints the
Administrative Agent as its agent hereunder and under the other Loan Documents
and authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the
terms hereof or thereof, together with such actions and powers as are reasonably
incidental thereto.

 

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

 

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby or by the other
Loan Documents that the Administrative Agent is required to exercise in writing
by the Required Lenders, and (c) except as expressly set forth herein and in the
other Loan Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or under any other Loan Document or in connection herewith
or therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or

 

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conditions set forth herein or in any other Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein or therein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

 

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

 

The Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Banks and the Borrower. Upon any such resignation, the Required Lenders
shall have the right, in consultation with the Borrower, to appoint a successor.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent’s
resignation shall nonetheless become effective and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and (2) the Required Lenders shall perform the duties of the
Administrative Agent (and all payments and communications provided to be made
by, to or through the Administrative Agent shall instead be made by or to each
Lender directly) until such time as the Required Lenders appoint a successor
agent as provided for above in this paragraph. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent.

 

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

 

Except as otherwise provided in Section 9.02(b) with respect to this Agreement,
the Administrative Agent may, with the prior consent of the Required Lenders
(but not otherwise), consent to any modification, supplement or waiver under any
of the Loan Documents.

 

Notwithstanding anything herein to the contrary the Joint Bookrunners and the
Joint Lead Arrangers named on the cover page of this Agreement shall not have
any duties or liabilities under this Agreement, except in their capacity, if
any, as Lenders.

 

ARTICLE IX

 

MISCELLANEOUS

 

SECTION 9.01. Notices.

 

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b) of
this Section), all notices and other communications provided for herein shall be
in writing and shall be delivered by hand or overnight courier service, mailed
by certified or registered mail or sent by telecopy, as follows:

 

(i) if to the Borrower, to it at Harte-Hanks, Inc., 200 Concord Plaza Drive,
Suite 800, San Antonio, TX 78216, Attention of Dean H. Blythe (Telecopy No.
(210) 829-9139);

 

(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 1111 Fannin
Street, 10th Floor, Houston, Texas 77002-6925, Attention of Loan and Agency
Services Group, Maria Giannavola (Telephone No. (713) 750-7920; Telecopy No.
(713) 750-2358), with a copy to JPMorgan Chase Bank, N.A., 270 Park Avenue, 15th
floor, New York, NY 10017, Attention of Padmini Persaud (Telephone No. (212)
270-6155; Telecopy No. (212) 270-4164), and to JPMorgan Chase Bank, N.A., 270
Park Avenue, 4th floor, New York, NY 10017, Attention of John Kowalczuk
(Telephone No. (212) 270- 6782; Telecopy No. (212) 270- 4584);

 

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(iii) if to JPMCB, as an Issuing Bank, to JPMorgan Chase Bank, N.A., 10420
Highland Manor Drive, 4th Floor, Tampa, Florida 33610, Attention of Gina Thomas
(Telephone No. (813) 432- 6356; Telecopy No. (813) 432- 5161), with a copy to
JPMorgan Chase Bank, N.A., 270 Park Avenue, New York 10017, Attention of Padmini
Persaud (Telephone No. (212) 270-6155; Telecopy No. (212) 270-4164);

 

(iv) if to Wells Fargo Bank, N.A., as an Issuing Bank, to Wells Fargo Bank,
N.A., MAC T5303-230, 1445 Ross Avenue, 23rd Floor, Dallas, Texas, 75202;
Attention of US Corporate Banking (Telephone No. (214) 661- 1225; Telecopy No.
(214) 969 -0371);

 

(v) if to Bank of America, N.A., as an Issuing Bank, to Bank of America, N.A.,
MA5 100-09-03, 100 Federal Street, Boston, Massachusetts 02110; Attention of
David Duve (Telephone No. (617) 434-8121; Telecopy No. (617) 434-0601;

 

(vi) if to JPMCB as Swingline Lender, to JPMorgan Chase Bank, N.A., 1111 Fannin
Street, 10th Floor, Houston, Texas 77002-6925, Attention of Loan and Agency
Services Group, Maria Giannavola (Telephone No. (713) 750-7920; Telecopy No.
(713) 750-2358), with a copy to JPMorgan Chase Bank, N.A., 270 Park Avenue, 15th
floor, New York, NY 10017, Attention of Padmini Persaud (Telephone No. (212)
270-6155; Telecopy No. (212) 270-4164), and to JPMorgan Chase Bank, N.A., 270
Park Avenue, 4th floor, New York, NY 10017, Attention of John Kowalczuk
(Telephone No. (212) 270- 6782; Telecopy No. (212) 270- 4584); and

 

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

 

(b) Electronic Communications. Notices and other communications to the Lenders
hereunder may be delivered or furnished by electronic communications (including
e mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

 

(c) Change of Address, Etc. Any party hereto may change its address or telecopy
number for notices and other communications hereunder by notice to the other
parties hereto (or, in the case of any such change by a Lender, by notice to the
Borrower and the Administrative Agent). All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt.

 

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SECTION 9.02. Waivers; Amendments.

 

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

 

(b) Amendments. Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender adversely affected
thereby, (iii) postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender adversely affected thereby, (iv) alter the provisions of
clause (c) or (d) of Section 2.18 in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender, or (v) change any of the provisions of this Section or the percentage in
the definition of the term “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; and provided further that
no such agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent, any Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, such Issuing Bank
or the Swingline Lender, as the case may be.

 

Anything in this Agreement to the contrary notwithstanding, no waiver or
modification of any provision of this Agreement that has the effect (either
immediately or at some later time) of enabling the Borrower to satisfy a
condition precedent to the making of a Loan of any Class shall be effective
against the Lenders of such Class for purposes of the Commitments of such Class
unless the Required Lenders of such Class shall have concurred with such waiver
or modification, and no waiver or modification of

 

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any provision of this Agreement that could reasonably be expected to adversely
affect the Lenders of any Class in a manner that does not affect all Classes
equally shall be effective against the Lenders of such Class unless the Required
Lenders of such Class shall have concurred with such waiver or modification.

 

For purposes of this Section, the “scheduled date of payment” of any amount
shall refer to the date of payment of such amount specified in this Agreement,
and shall not refer to a date or other event specified for the mandatory or
optional prepayment of such amount. In addition, whenever a waiver, amendment or
modification requires the consent of a Lender “adversely affected” thereby, such
waiver, amendment or modification shall, upon consent of such Lender, become
effective as to such Lender whether or not it becomes effective as to any other
Lender, so long as the Required Lenders consent to such waiver, amendment or
modification as provided above.

 

SECTION 9.03. Expenses; Indemnity; Damage Waiver.

 

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

 

(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and each Issuing Bank, and each Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and to hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by any Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated

 

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by the Borrower or any of its Subsidiaries, or any Environmental Liability
related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.

 

(c) Reimbursement by Lenders. To the extent that the Borrower fails to pay any
amount required to be paid by it to the Administrative Agent, an Issuing Bank or
the Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, such Issuing Bank or the
Swingline Lender, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent, such
Issuing Bank or the Swingline Lender in its capacity as such.

 

(d) Waiver of Consequential Damages, Etc. To the extent permitted by applicable
law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.

 

(e) Payments. All amounts due under this Section shall be payable promptly after
written demand therefor.

 

SECTION 9.04. Successors and Assigns.

 

(a) Assignments Generally. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any Affiliate of an Issuing
Bank that issues any Letter of Credit), except that (i) the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void) and (ii)
no Lender may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section 9.04. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of an Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, Related Parties of each of the
Administrative Agent, the Issuing Banks, the Swingline Lender and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.

 

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(b) Assignments by Lenders.

 

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

 

(A) the Borrower, provided that no consent of the Borrower shall be required for
an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default under clause (a), (b), (h) or (i) of Article VII shall have
occurred and is continuing, any other assignee;

 

(B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of any Commitment to an assignee that
is a Lender with a Commitment immediately prior to giving effect to such
assignment;

 

(C) the Issuing Banks, to the extent such assignment is of all or a portion of a
Commitment or any Lender’s obligations in respect of its LC Exposure; and

 

(D) the Swingline Lender, to the extent such assignment is of all or a portion
of a Commitment or any Lender’s obligations in respect of its Swingline
Exposure.

 

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

 

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans of any Class, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default under clause
(a), (b), (h) or (i) of Article VII has occurred and is continuing;

 

(B) each partial assignment of any Commitment or Class of Loans shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement in respect of such Commitment and Loans;

 

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption in substantially the form of
Exhibit A hereto, together with a processing and recordation fee of $3,500; and

 

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(D) the assignee, if it shall not already be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

(iii) Effectiveness of Assignments. Subject to acceptance and recording thereof
pursuant to paragraph (c) below, from and after the effective date specified in
each Assignment and Assumption the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the rights
referred to in Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this Section 9.04 shall be treated for purposes of this Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with paragraph (e) below.

 

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

 

(d) Effectiveness of Assignments. Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an assignee, the
assignee’s completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and any written consent to such assignment required by
said paragraph (b), the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph (d).

 

(e) Participations. Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Banks or the Swingline Lender, sell
participations to one or more banks or other financial institutions (a
“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement and the other Loan Documents (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement and the other Loan Documents shall remain
unchanged, (ii) such Lender shall remain solely responsible to

 

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the other parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent, the Issuing Banks, the Swingline Lender and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
the other Loan Documents. Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and the other Loan Documents and to approve any
amendment, modification or waiver of any provision of this Agreement or any
other Loan Document; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (f) below, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) above. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 9.08 hereof as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(d) as though it were a Lender hereunder.

 

(f) Limitations on Rights of Participants. A Participant shall not be entitled
to receive any greater payment under Section 2.15 or 2.17 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower’s prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.17 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.17(e) as though it were a Lender.

 

(g) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank, and this Section 9.04 shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.

 

(h) No Assignments to the Borrower or Affiliates. Anything in this Section to
the contrary notwithstanding, no Lender may assign or participate any interest
in any Loan or LC Exposure held by it hereunder to the Borrower or any of its
Affiliates or Subsidiaries without the prior consent of each Lender.

 

SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, any Issuing Bank or any Lender may

 

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have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and
9.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.

 

SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract between and among the parties relating to
the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

SECTION 9.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by such
Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender under this Section are in addition
to other rights and remedies (including other rights of setoff) which such
Lender may have.

 

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SECTION 9.09. Governing Law; Jurisdiction; Etc.

 

(a) Governing Law. This Agreement shall be construed in accordance with and
governed by the law of the State of New York.

 

(b) Submission to Jurisdiction. The Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Issuing Banks or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement against the Borrower
or its properties in the courts of any jurisdiction.

 

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

 

(d) Service of Process. Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

 

SECTION 9.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

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SECTION 9.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

SECTION 9.12. Treatment of Certain Information; Confidentiality.

 

(a) Treatment of Certain Information. The Borrower acknowledges that from time
to time financial advisory, investment banking and other services may be offered
or provided to the Borrower or one or more of its Subsidiaries (in connection
with this Agreement or otherwise) by any Lender or by one or more subsidiaries
or affiliates of such Lender and the Borrower hereby authorizes each Lender to
share any information delivered to such Lender by the Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such subsidiary or affiliate,
it being understood that any such subsidiary or affiliate receiving such
information shall be bound by the provisions of paragraph (b) of this Section as
if it were a Lender hereunder. Such authorization shall survive the repayment of
the Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

 

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

 

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SECTION 9.13. USA Patriot Act. Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107 56
(signed into law October 26, 2001)), such Lender may be required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender to identify the Borrower in accordance with said Act.

 

SECTION 9.14. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges and other amounts which are treated as interest on such Loan
under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

 

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

 

HARTE-HANKS, INC. By:  

 

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Name:     Title:    

 

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LENDERS JPMORGAN CHASE BANK, N.A.

    individually, as Swingline Lender and as

    Administrative Agent

By:  

 

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Name:     Title:     WELLS FARGO BANK, N.A. By:  

 

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Name:     Title:     BANK OF AMERICA, N.A. By:  

 

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Name:     Title:     THE BANK OF TOKYO-MITSUBISHI, LTD. By:  

 

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Name:     Title:     UMB BANK N.A. By:  

 

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Name:     Title:    

 

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U.S. BANK NATIONAL ASSOCIATION By:  

 

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Name:     Title: