exv10w2



 





Exhibit 10.2




EXECUTION COPY




REVOLVING

CREDIT AGREEMENT




Dated as of June 13, 2007




among




AVERY DENNISON CORPORATION,

as Borrower,




JPMorgan Chase Bank, N.A.,

as Administrative Agent




and




The Other Banks Party Hereto




 






J.P. Morgan Securities Inc.,

Sole Lead Arranger and Bookrunner




 









 





TABLE OF CONTENTS

 






	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 1
	 	 	 	 
	Definitions And Accounting Terms
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 1.01.

	 	Defined Terms
	 	 	1	 
	Section 1.02.

	 	Use of Defined Terms
	 	 	14	 
	Section 1.03.

	 	Accounting Terms
	 	 	14	 
	Section 1.04.

	 	Exhibits and Schedules
	 	 	14	 
	Section 1.05.

	 	Pricing Levels
	 	 	14	 
	 
	 	 	 	 	 	 
	ARTICLE 2
	 	 	 	 
	Loans
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 2.01.

	 	Loans
	 	 	15	 
	Section 2.02.

	 	Loan Accounts
	 	 	15	 
	Section 2.03.

	 	Procedure for Borrowing
	 	 	16	 
	Section 2.04.

	 	Conversion and Continuation Elections
	 	 	16	 
	Section 2.05.

	 	Optional Reduction or Termination of Commitments
	 	 	18	 
	Section 2.06.

	 	Interest
	 	 	18	 
	Section 2.07.

	 	Repayment and Prepayments of Principal
	 	 	19	 
	Section 2.08.

	 	Fees
	 	 	19	 
	Section 2.09.

	 	Payments by Borrower
	 	 	20	 
	Section 2.10.

	 	Payments by the Banks to the Administrative Agent
	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE 3
	 	 	 	 
	Payments, Costs
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 3.01.

	 	Eurodollar
	 	 	21	 
	Section 3.02.

	 	Special Eurodollar Circumstances
	 	 	22	 
	Section 3.03.

	 	Eurodollar Indemnification
	 	 	23	 
	Section 3.04.

	 	Computation of Interest and Fees
	 	 	23	 
	Section 3.05.

	 	Holidays
	 	 	23	 
	Section 3.06.

	 	Payment Free of Taxes
	 	 	23	 
	Section 3.07.

	 	Funding Sources
	 	 	23	 
	Section 3.08.

	 	Failure to Charge Not Subsequent Waiver
	 	 	24	 
	Section 3.09.

	 	Other Costs
	 	 	24	 
	Section 3.10.

	 	Survivability
	 	 	25	 






i









 





	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 4
	 	 	 	 
	Conditions
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 4.01.

	 	Effective Date
	 	 	25	 
	Section 4.02.

	 	Any Borrowing, Conversion or Continuation
	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE 5
	 	 	 	 
	Representations And Warranties
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 5.01.

	 	Existence and Qualification; Power; Compliance with Law
	 	 	26	 
	Section 5.02.

	 	Authority Compliance with Other Instruments and
Government Regulations
	 	 	27	 
	Section 5.03.

	 	No Governmental Approvals Required
	 	 	27	 
	Section 5.04.

	 	Subsidiaries
	 	 	27	 
	Section 5.05.

	 	Financial Statements
	 	 	28	 
	Section 5.06.

	 	No Material Adverse Change or Other Liabilities
	 	 	28	 
	Section 5.07.

	 	Title to Assets
	 	 	29	 
	Section 5.08.

	 	Regulated Industries
	 	 	29	 
	Section 5.09.

	 	Litigation
	 	 	29	 
	Section 5.10.

	 	Binding Obligations
	 	 	29	 
	Section 5.11.

	 	No Default
	 	 	29	 
	Section 5.12.

	 	ERISA
	 	 	30	 
	Section 5.13.

	 	Regulation U
	 	 	30	 
	Section 5.14.

	 	Tax Liability
	 	 	30	 
	Section 5.15.

	 	Copyrights, Patents, Trademarks and Licenses, Etc
	 	 	30	 
	Section 5.16.

	 	Environmental Matters
	 	 	31	 
	Section 5.17.

	 	Insurance
	 	 	31	 
	Section 5.18.

	 	Disclosure
	 	 	31	 
	 
	 	 	 	 	 	 
	ARTICLE 6
	 	 	 	 
	Affirmative Covenants
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 6.01.

	 	Financial and Business Information
	 	 	31	 
	Section 6.02.

	 	Certificates, Other Information
	 	 	32	 
	Section 6.03.

	 	Notices
	 	 	32	 
	Section 6.04.

	 	Payment of Taxes and Other Potential Liens
	 	 	33	 
	Section 6.05.

	 	Preservation of Existence
	 	 	34	 
	Section 6.06.

	 	Maintenance of Properties
	 	 	34	 
	Section 6.07.

	 	Maintenance of Insurance
	 	 	34	 
	Section 6.08.

	 	Compliance With Laws
	 	 	34	 
	Section 6.09.

	 	Inspection Rights
	 	 	35	 
	Section 6.10.

	 	Keeping of Records and Books of Account
	 	 	35	 
	Section 6.11.

	 	ERISA Compliance
	 	 	35	 
	Section 6.12.

	 	Environmental Laws
	 	 	35	 
	Section 6.13.

	 	Use of Proceeds
	 	 	35	 






ii









 





	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 7
	 	 	 	 
	Negative Covenants
	 	 	 	 
	 
	 	 	 	 	 	 
	Section 7.01.

	 	Type of Business
	 	 	36	 
	Section 7.02.

	 	Liens
	 	 	36	 
	Section 7.03.

	 	Investments
	 	 	36	 
	Section 7.04.

	 	Contingent Obligations
	 	 	37	 
	Section 7.05.

	 	Subordinated Debt
	 	 	37	 
	Section 7.06.

	 	Sale of Assets or Merger
	 	 	37	 
	Section 7.07.

	 	Financial Covenants
	 	 	37	 
	Section 7.08.

	 	Use of Proceeds
	 	 	37	 
	 
	 	 	 	 	 	 
	ARTICLE 8
	 	 	 	 
	Events of Default And Remedies Upon Events of Default
	 	 	 	 
	 
	Section 8.01.

	 	Events of Default
	 	 	38	 
	Section 8.02.

	 	Remedies Upon Event of Default
	 	 	39	 
	 
	 	 	 	 	 	 
	ARTICLE 9
	 	 	 	 
	The Administrative Agent
	 	 	 	 
	 
	Section 9.01.

	 	Appointment and Authorization
	 	 	40	 
	Section 9.02.

	 	Delegation of Duties
	 	 	41	 
	Section 9.03.

	 	Administrative Agent and Affiliates
	 	 	41	 
	Section 9.04.

	 	Banks’ Credit Decisions
	 	 	41	 
	Section 9.05.

	 	Action by Administrative Agent
	 	 	42	 
	Section 9.06.

	 	Liability of Administrative Agent
	 	 	43	 
	Section 9.07.

	 	Indemnification
	 	 	44	 
	Section 9.08.

	 	Successor Administrative Agent
	 	 	45	 
	Section 9.09.

	 	Withholding Tax
	 	 	45	 
	 
	 	 	 	 	 	 
	ARTICLE 10
	 	 	 	 
	Miscellaneous
	 	 	 	 
	 
	Section 10.01.

	 	Cumulative Remedies; No Waiver
	 	 	46	 
	Section 10.02.

	 	Amendments; Consents
	 	 	46	 
	Section 10.03.

	 	Costs, Expenses and Taxes
	 	 	47	 
	Section 10.04.

	 	Banks’ Relationship
	 	 	48	 
	Section 10.05.

	 	Survival of Representations and Warranties
	 	 	48	 
	Section 10.06.

	 	Notices
	 	 	48	 
	Section 10.07.

	 	Execution in Counterparts
	 	 	49	 
	Section 10.08.

	 	Successors and Assigns
	 	 	50	 
	Section 10.09.

	 	Right of Setoff; Sharing of Excess Payment
	 	 	53	 
	Section 10.10.

	 	Indemnification by Borrower
	 	 	53	 
	Section 10.11.

	 	Nonliability of Banks
	 	 	54	 






iii









 





	 	 	 	 	 	 	 
	 	 	 	 	Page
	Section 10.12.

	 	Confidentiality
	 	 	54	 
	Section 10.13.

	 	Investment Intent
	 	 	55	 
	Section 10.14.

	 	Further Assurances
	 	 	55	 
	Section 10.15.

	 	Integration
	 	 	55	 
	Section 10.16.

	 	Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial
	 	 	55	 
	Section 10.17.

	 	Severability of Provisions
	 	 	55	 
	Section 10.18.

	 	Headings
	 	 	56	 
	Section 10.19.

	 	Time of the Essence
	 	 	56	 
	Section 10.20.

	 	USA PATRIOT Act Notice
	 	 	56	 






	 	 	 
	Exhibits	 	 
	 
	Exhibit A

	 	- Notice of Borrowing
	Exhibit B

	 	- Notice of Conversion/Continuation
	Exhibit C

	 	- Compliance Certificate
	Exhibit D

	 	- Assignment and Assumption






iv









 





REVOLVING CREDIT AGREEMENT




     THIS REVOLVING CREDIT AGREEMENT is dated as of June 13, 2007 and is entered into by and
among AVERY DENNISON CORPORATION, a Delaware corporation (the “Borrower”), the undersigned banks
and other financial institutions (together with each bank and financial institution which becomes a
Bank hereunder pursuant to Section 10.08, collectively the “Banks”) party hereto JPMORGAN CHASE
BANK, N.A., as Administrative Agent.



RECITAL




     Borrower and the Banks desire to enter into this Agreement on the terms and conditions
set forth herein.



ARTICLE 1



Definitions And Accounting Terms




     Section 1.01. Defined Terms. As used in this Agreement, the following terms shall have
the meanings set forth respectively after each:



     “Acquisition” means any transaction, or any series of related transactions, consummated after
the Effective Date, by which Borrower and/or any of its Subsidiaries directly or indirectly (a)
acquires any going business or all or substantially all of the assets of any firm, corporation, or
division thereof, whether through purchase of assets, merger or otherwise or (b) acquires (in one
transaction or as the most recent transaction in a series of transactions) control of at least a
majority in ordinary voting power of the securities of a corporation which have ordinary voting
power for the election of directors or (c) acquires control of at least a majority ownership
interest in any partnership or joint venture.



     “Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative
agent for the Banks hereunder, and any successor agent arising under Section 9.08.



     “Administrative Agent’s Payment Office” means the address for payments set forth on Schedule
10.06 or such other address as the Administrative Agent may from time to time specify.



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



     “Affiliate” means, as to any Person, any other Person which directly or indirectly controls,
or is under common control with, or is controlled by, such Person. As used in this definition,
“control” (including, with its correlative



 









 




meanings, “controlled by” and “under common control with”) shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract or otherwise),
provided that, in any event, any Person which owns directly or indirectly 50% or more of the
securities having ordinary voting power for the election of directors or other governing body of a
corporation or 50% or more of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person) will be deemed to control such corporation
or other Person.




     “Agent-Related Persons” means JPMorgan Chase Bank, N. A. and any successor agent arising under
Section 9.08 together with its Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.



     “Aggregate Amounts Due” has the meaning specified in Section 10.09(b).



     “Agreement” means this Revolving Credit Agreement, either as originally executed or as it may
from time to time be supplemented, modified, or amended.



     “Alpha Acquisition Corp.” means Alpha Acquisition Corp., a New York corporation and a
wholly-owned subsidiary of the Borrower.



     “Applicable Margin” means, for any date of determination, for the designated Rating
Level, Utilization Ratio applicable to such date of determination and Type of Loan, the
following interest rates per annum:



	 	 	 	 	 	 	 	 	 
	 	 	Applicable Margin when	 	Applicable Margin when
	 	 	Utilization Ratio is equal	 	Utilization Ratio is greater
	 	 	to or less than 0.50:1.00	 	than 0.50:1.00
	 	 	TYPE OF LOAN         	 	TYPE OF LOAN           
	 	 	Base Rate	 	Eurodollar	 	Base Rate	 	Eurodollar
	 	 	Loan	 	Rate Loan	 	Loan	 	Rate Loan
	Rating Level I
	 	0%	 	0.205%	 	.050%	 	0.255%
	Rating Level II
	 	0%	 	0.295%	 	.050%	 	0.345%
	Rating Level III
	 	0%	 	0.375%	 	.050%	 	0.425%






     For purposes of this definition, “Utilization Ratio” means, as of any date of
determination, the ratio of (1) the aggregate outstanding principal amount of all Loans as of such
date to (2) the Commitments in effect as of such date (whether used or unused) of all Banks. The
Applicable Margin shall be adjusted daily to reflect changes in the Utilization Ratio and the
Rating Level applicable to Borrower; provided, however, in the event of a change in Borrower’s
Rating Level, the Applicable Margin with respect to outstanding Eurodollar Rate Loans



2









 




will continue to be in effect until the end of the then existing Interest Period. The then
existing Applicable Margins shall thereupon be effective as to any new or continued Eurodollar Rate
Loans.




     “Approved Fund” has the meaning specified in Section 10.08(g).



     “Asset Sale” means the sale, transfer or other disposition (by way of merger, casualty,
condemnation or otherwise) by Borrower or any of its Subsidiaries to any person other than Borrower
or any such Subsidiary of (a) any equity interests of any of such Subsidiaries (other than
directors’ qualifying shares and shares required by applicable law to be held by foreign nationals
(but only to the extent of such legal requirement)) or (b) any other assets of Borrower or any of
its Subsidiaries (other than (i) assets disposed of in the ordinary course of business, (ii)
dispositions between or among Borrower and its Subsidiaries and (iii) any sale, transfer or other
disposition or series of related sales, transfers or other dispositions having a value not in
excess of $25,000,000 in the aggregate in any calendar year).



     “Assignment and Assumption” means an Assignment and Assumption
substantially in the form of Exhibit D.



     “Base Rate” means for any day a fluctuating rate per annum equal to the higher of (i) Prime
Rate for such day plus the Applicable Margin or (ii) the sum of the Federal Funds Rate for such day
plus 0.50% plus the Applicable Margin.



     “Base Rate Loan” means a Loan that bears interest based on the Base Rate. All Base Rate
Loans shall be denominated in Dollars.



     “Borrowing” means any of the groups of Loans made at any one time by the Banks. Each Borrowing
shall be made up of Loans made simultaneously by the Banks. Each Loan made by each Bank shall be
equal to that Bank’s pro-rata share, according to its Commitment, of the applicable Borrowing.



     “Borrowing Date” means any date on which a Borrowing occurs under Section 2.03.



     “Business Day” means any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Laws of, or are in fact closed in, the State of New York
and if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in
deposits in Dollars are conducted by and between banks in the London interbank market.



     “Cash Equivalents” means, when used in connection with any Person, the Person’s Investments
in:



3









 






     (a) Government Securities due within one year after the date of
the making of the Investment;




     (b) certificates of deposit issued by, bank deposits in, bankers’
acceptances of, and repurchase agreements covering Government
Securities executed by, any Bank or any bank doing business in and
incorporated under the laws of the United States of America or any state
thereof, or Canada and having on the date of such Investment combined
capital, surplus, and undivided profits of at least $500,000,000 in each
case due within one year after the date of the making of the Investment;
and




     (c) readily marketable commercial paper of corporations doing
business in and incorporated under the laws of the United States of
America or any state thereof, Canada or any province thereof given on the
date of such Investment the highest credit rating by NCO/Moody’s
Commercial Paper Division of Moody’s or S&P, in each case due within
six months after the date of the making of the Investment.



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



     “Commitment” means, as to each Bank, the amount set forth opposite that Bank’s name on
Schedule 2.01 hereto, as such amount may be reduced under Section 2.05.



     “Compliance Certificate” means a certificate in the form of Exhibit C signed by a Designated
Officer.



     “Consolidated Debt” means, at any date, the Debt of Borrower and its Consolidated
Subsidiaries, determined on a consolidated basis as of such date.



     “Consolidated Earnings Before Interest and Taxes” means, as of any date of determination, the
earnings of Borrower and the Consolidated Subsidiaries for the twelve month fiscal period then
ended before deducting interest expense and taxes on or measured by income charged against earnings
for that period, all determined and consolidated in conformity with generally accepted accounting
principles consistently applied.



     “Consolidated EBITDA” means, for any period, Consolidated Net Income for such period plus, to
the extent deducted in the determination of such Consolidated Net Income, (a) Consolidated Interest
for such period, (b) the provision for income taxes for such period, and (c) depreciation and
amortization expense for such period.



4









 





     “Consolidated Interest” means, as of any date of determination, the interest expense of
Borrower and the Consolidated Subsidiaries for the twelve month fiscal period then ended,
determined and consolidated in conformity with generally accepted accounting principles
consistently applied.



     “Consolidated Net Income” means, for any fiscal year, the consolidated net income of Borrower
and the Consolidated Subsidiaries for that period, determined and consolidated in conformity with
generally accepted accounting principles consistently applied.



     “Consolidated Net Worth” means, as of any date of determination, the consolidated net worth of
Borrower and the Consolidated Subsidiaries, determined in accordance with generally accepted
accounting principles consistently applied, plus Subordinated Debt in an amount up to but not
exceeding 20% of the consolidated net worth of Borrower and the Consolidated Subsidiaries (minus
any Subordinated Debt carried in the treasury of Borrower or any Subsidiary).



     “Consolidated Subsidiary” means any Subsidiary of Borrower whose financial statements are
consolidated with the financial statements of Borrower in conformity with generally accepted
accounting principles consistently applied.



     “Consolidated Total Liabilities” means, as of any date of determination, all liabilities of
Borrower and the Consolidated Subsidiaries that in conformity with generally accepted accounting
principles consistently applied should be reflected in the liability side of a consolidated balance
sheet of Borrower and the Consolidated Subsidiaries as of such date of determination.



     “Consolidated Total Tangible Assets” means, as of any date of determination, all assets of
Borrower and the Consolidated Subsidiaries that in conformity with generally accepted accounting
principles consistently applied should be reflected in the asset side of a consolidated balance
sheet of Borrower and the Consolidated Subsidiaries as of such date of determination, excluding any
Intangible Assets.



     “Contingent Obligation” means any guarantee of any obligation of another Person, or any
agreement to become directly or indirectly responsible for an obligation of another Person,
(including, without limitation, any agreement to maintain the net worth or liquidity of another
Person or to purchase any obligation, goods or services of another Person, or otherwise to provide
credit assurances to the holder of an obligation of another Person), or any agreement in the nature
of a guarantee or having the effect of creating responsibility for the obligation of another
Person, except the guarantee or agreement in the nature of a guarantee by Borrower or a
Consolidated Subsidiary of the obligations of a Consolidated Subsidiary.



5









 





     “Conversion/Continuation Date” means any date on which a conversion or
continuation occurs under Section 2.04.



     “Debt” of any Person means at any date, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price
of property or services, except trade accounts payable and deferred employee compensation
obligations arising in the ordinary course of business, (d) all obligations of such Person as
lessee which are capitalized in accordance with generally accepted accounting principles, (e) all
unpaid reimbursement obligations of such Person in respect of letters of credit or similar
instruments but only to the extent that either (i) the issuer has honored a drawing thereunder or
(ii) payment of such obligation is otherwise due under the terms thereof, (f) all Debt secured by a
Lien on real property which is otherwise an obligation of such Person, and (g) all Debt of others
in excess of $1,000,000 guaranteed by such Person.



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



     “Designated Officer” means (i) the chief executive officer, (ii) chief financial officer, vice
president and treasurer or (iv) vice president and controller of Borrower.



     “Dollars” (or “$”) means the national currency of the United States of America denominated in
dollars.



     “Domestic Subsidiary” means any Subsidiary whose principal place of business is located in the
United States of America.



     “Effective Date” means the time and Business Day on which the consummation of all of the
transactions contemplated in Section 4.01 occurs.



     “Eligible Assignee” has the meaning specified in Section 10.08(g).



     “Environmental Claims” means all claims, however asserted, by any Governmental Authority or
other Person alleging potential liability or responsibility for violation of any Environmental Law,
or for release or injury to the environment.



     “Environmental Laws” means all federal, state or local laws, statutes, common law duties,
rules, regulations, ordinances and codes, together with all administrative orders, directed duties,
requests, licenses, authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use matters.



6









 





     “ERISA” means, at any date, the Employee Retirement Income Security Act of 1974
and the regulations thereunder.



     “Eurocurrency Reserve Percentage” means, for any day during any Interest Period, the reserve
percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%) in effect on such
day, whether or not applicable to any Bank, under regulations issued from time to time by the Board
of Governors of the Federal Reserve System for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurodollar Rate for
each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of
any change in the Eurocurrency Reserve Percentage.



     “Eurodollar Rate” means for any Interest Period with respect to any Eurodollar Rate Loan, a
rate per annum determined by the Administrative Agent pursuant to the following formula:



	 	 	 	 	 
	 

	 	Eurodollar Rate =
	 	 Eurodollar Base Rate
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 1.00 - Eurocurrency Reserve Percentage







Where,




“Eurodollar Base Rate” means, for such Interest Period:



     (i) the rate per annum equal to the rate determined by the Administrative Agent to be
the offered rate that appears on Telerate Successor Page 3750, as published by Reuters (or a
successor servicer) that displays an average British Bankers Association LIBOR Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time) on the Quotation Date.



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



7









 



     (iii) in the event the rates referenced in the preceding subsections (i) and (ii) are not
available, the rate per annum determined by the Administrative
Agent as the rate of interest (rounded upward to the next 1/100th of 1%) at which deposits
in Dollars for delivery on the first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Rate Loan being made, continued or converted by JPMCB and with
a term equivalent to such Interest Period would be offered by JPMCB to major banks in the London
interbank market for such currency at their request at approximately 11:00 a.m. (London time) on
the Quotation Date.




     “Eurodollar Rate Loan” means a Loan that bears interest based on the Eurodollar Rate.



     “Events of Default” has the meaning set forth for that term in Section 8.01.



     “Federal Funds Rate” means, for any day, the rate per annum (rounded upwards to the nearest
1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next succeeding
Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate charged to JPMCB on such day on such
transactions as determined by the Administrative Agent.



     “Foreign Bank” has the meaning specified in Section 10.08(e). 

     “Fund” has the
meaning specified in Section 10.08(g).




     “Government Securities” means readily marketable direct obligations of the United States of
America or obligations fully guaranteed by the United States of America.



     “Governmental Agency” means (a) any federal, state, county or municipal government, or
political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality, or public body, or (c) any court, administrative
tribunal, or public utility, in each case whether of the United States of America or any other
nation or supranational entity.



     “Intangible Assets” means assets having no physical existence and that, in conformity with
generally accepted accounting principles consistently applied, should be classified as intangible
assets, including without limitation such intangible assets as patents, trademarks, copyrights,
franchises, licenses and goodwill.



8









 





     “Interest Coverage Ratio” means, at any date, the ratio of Consolidated Earnings Before
Interest and Taxes to Consolidated Interest for the period of four consecutive fiscal quarters most
recently ended on or prior to such date.



     “Interest Period” means, as to any Eurodollar Rate Loan, the period commencing on the
Borrowing Date of such Loan or on the Conversion/Continuation Date on which the Loan is convened
into or continued as a Eurodollar Rate Loan, and ending on the date one, two, three or six months
thereafter as selected by Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:




     (a) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the following
Business Day unless, in the case of a Eurodollar Rate Loan, the result of
such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the
preceding Business Day;




     (b) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end
of such Interest Period; and




     (c) no Interest Period for any Loan shall extend beyond the
Maturity Date.



     “Investment” means, when used in connection with any Person, any investment by the Person,
whether by means of purchase or other acquisition of stock or other securities or by means of loan,
advance, capital contribution, guarantee, or other debt or equity participation or interest in any
other Person.



     “JPMCB” means JPMorgan Chase Bank, N.A., a national banking
association, and its successors.



     “Laws” means, collectively, all federal, state and local laws, statutes, codes, ordinances,
rules and regulations, including published opinions of the court of last resort in the applicable
jurisdiction, and shall include, without limitation, all of the foregoing relating to environmental
matters.



     “Lending Office” means, as to any Bank, the office or offices of such Bank specified as its
“Lending Office” or “Domestic Lending Office” or “Eurodollar Lending Office”, as the case may be,
in its Administrative Questionnaire, or such other office or offices as such Bank may from time to
time notify Borrower and the Administrative Agent.



9









 





     “Leverage Ratio” means, at any date, the ratio of Consolidated Debt at such date to
Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended on or
prior to such date.



     “Lien” means any mortgage, deed of trust, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention agreement, any lease
in the nature thereof, and any financing statement filed under the Uniform Commercial Code of any
jurisdiction).



     “Loan” means each of the loans to be made to Borrower hereunder by each of the Banks, and may
be a Eurodollar Rate Loan or a Base Rate Loan (each a “Type” of Loan).



     “Loan Documents” means this Agreement and all other documents delivered to the
Administrative Agent or any Bank in connection herewith.



     “Majority Banks” means, at any time, a Bank or Banks holding more than 50% of the aggregate
principal amount of the Loans then outstanding (or if no Loans are at the time outstanding, a Bank
or Banks having more than 50% of the aggregate Commitments).



     “Margin Stock” means “margin stock” as such term is defined in Regulation U of the Board of
Governors of the Federal Reserve System, or any successor thereto.



     “Material Adverse Effect” means any change, effect, event, occurrence or state of facts that
is materially adverse to the combined business, financial condition or results of operations of the
Borrower, Paxar Corporation and their respective subsidiaries, taken as a whole, other than any
change, effect, event, occurrence or state of facts relating to or resulting from (i) general
economic or geopolitical conditions or the securities, credit or financial markets in general, (ii)
changes affecting the industries in which Borrower or Paxar Corporation operate generally, (iii)
changes in law or applicable accounting regulations or principles or interpretations thereof, (iv)
any outbreak or escalation of hostilities or war or any act of terrorism, (v) any weather-related
or other force majeure event, (vi) the announcement or the existence of, or compliance with, the
Merger Agreement or the announcement of the Merger or any of the other transactions contemplated by
the Merger Agreement, (vii) changes in the market price or trading volume of the common stock of
Borrower or Paxar Corporation; provided that with respect to clauses (i) through (v), such change,
effect, event, occurrence or state of facts shall not have a materially disproportionate impact on
Borrower, Paxar Corporation and their respective subsidiaries or the properties and/or facilities of Borrower,
Paxar Corporation and their respective subsidiaries, taken as a whole.



10









 





     “Maturity Date” means the earlier to occur of: (a) June 11, 2008, or, if such day is not a
Business Day, the next preceding Business Day; and (b) the date on which the Commitments terminate
in accordance with the provisions of this
Agreement.



     “Merger” means the merger of Alpha Acquisition Corp. with and into Paxar Corporation pursuant
to the Merger Agreement.



     “Merger Agreement” means the Agreement and Plan of Merger by and among the Borrower, Alpha
Acquisition Corp., and Paxar Corporation, dated as of March 22, 2007, as amended from time to
time.



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



     “Net Proceeds” means (a) with respect to any Asset Sale, the cash proceeds (including cash
proceeds subsequently received (as and when received) in respect of noncash consideration initially
received), net of (i) selling expenses (including broker’s fees or commissions, legal fees,
transfer and similar taxes and Borrower’s good faith estimate of income taxes paid or payable in
connection with such sale), (ii) amounts provided as a reserve, in accordance with generally
accepted accounting principles, against any liabilities under any indemnification obligations or
purchase price adjustment associated with such Asset Sale (provided that, to the extent and at the
time any such amounts are released from such reserve, such amounts shall constitute Net Proceeds)
and (iii) the principal amount of any Debt which is secured by the asset sold in such Asset Sale
and which is required to be repaid with such proceeds (other than any such Debt assumed by the
purchaser of such asset); provided, however, that, if the Borrower shall deliver a certificate of
an authorized officer to the Administrative Agent at the time of receipt thereof setting forth the
Borrower’s intent to reinvest such proceeds in productive assets of a kind then used or usable in
the business of the Borrower and the Subsidiaries within 60 days of receipt of such proceeds, such
proceeds shall not constitute Net Proceeds except to the extent not so used at the end of such
60-day period, at which time such proceeds shall automatically be deemed to be Net Proceeds; and
(b) with respect to any issuance of debt or equity securities, the cash proceeds thereof, net of
all taxes and fees, discounts, commissions, costs and other expenses incurred in connection
therewith.



     “Notice of Borrowing” means a notice in substantially the form of Exhibit A.



     “Notice of Conversion/Continuation” means a notice in substantially the form of Exhibit B.



11









 





     “Obligations” means all obligations of every nature of Borrower from time to time owed to the
Administrative Agent and the Banks under the Loan Documents.



     “Participant” has the meaning specified in Section 10.08(d).



     “Paxar Corporation” means Paxar Corporation, a New York corporation.



     “Pension Plan” means any “employee pension benefit plan” (as such term is defined in ERISA)
which is subject to ERISA and which is from time to time maintained by Borrower or any of its
Subsidiaries.



     “Person” means any entity, whether an individual, trustee, corporation, partnership, joint
stock company, trust, unincorporated organization, union, tribe, business association or firm,
joint venture, Governmental Agency, or otherwise.



     “Prepayment Event” means (i) any sale or issuance by Borrower or a Subsidiary of its debt or
equity securities pursuant to a private placement or sale that is underwritten, managed, arranged,
placed or initially purchased by an investment bank, but excluding any such sale or issuance
resulting from or related to Borrower’s director and employee benefit plans including but not
limited to issuance of stock awards or stock resulting from the exercise of stock options by, or as
compensation to, employees, consultants or management of the Borrower in the ordinary course of
business, and (ii) any Asset Sale.



     “Prime Rate” means, for any day, the rate of interest per annum then most recently publicly
announced by JPMCB as its prime rate in effect at its principal office in New York City. Each
change in the Prime Rate will be effective for purposes hereof from and including the date such
change is publicly announced as being effective.



     “Pro Rata Share” means, as to any Bank at any time, the percentage equivalent (expressed as a
decimal, rounded to the ninth decimal place) at such time of such Bank’s Commitment divided by the
combined Commitments of all Banks.



     “Quotation Date” means, for any Interest Period, the date two Business Days prior to the
commencement of such Interest Period.



     “Rating Level I” has the meaning assigned to that term in Section 1.05.



     “Rating Level II” has the meaning assigned to that term in Section 1.05.



     “Rating Level III” has the meaning assigned to that term in Section 1.05.



     “Reduction Amount” has the meaning specified in Section 2.07(c).



12









 





     “Regulation D” or “Regulation U” mean, respectively, Regulation D or Regulation U, as at
any time amended, of the Board of Governors of the Federal Reserve System or any other
regulation in substance substituted therefor.



     “Regulatory Development” means any or all of the following: (i) any change in the Laws, or
any change in the interpretation thereof by any Governmental Agency or other authority (whether or
not having the force of law); (ii) any change in the application of any existing Laws by any
Governmental Agency or other authority (whether or not having the force of law); and (iii)
compliance by any Bank with any request or directive (whether or not having the force of law) of
any monetary or fiscal agency or authority.



     “Restricted Margin Stock” means, as of any date of determination, all of the Margin Stock
owned by Borrower and its Subsidiaries to the extent that the fair market value thereof is not more
than 25% of the aggregate fair market value of the assets of Borrower and its Subsidiaries,
determined on a consolidated basis.



     “Right of Others” means, as to any property in which a Person has an interest, any legal or
equitable claim or other interest (other than a Lien) in or with respect to that properly held by
any other Person, and any option or right held by any other Person to acquire any such claim or
other interest, including a Lien.



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



     “Significant Subsidiary” means a Subsidiary of Borrower with assets in excess of 3% of
Consolidated Total Tangible Assets.



     “Subordinated Debt” means, as of any date of determination, the aggregate principal amount
then outstanding of indebtedness of Borrower that is subordinated to the Obligations, on terms that
(a) prohibit any payment on that indebtedness (whether principal, premium, if any, interest, or
otherwise) if: (i) any event not waived hereunder has occurred and is continuing that is a Default
or an Event of Default, or (ii) the payment would cause the occurrence of a Default or an Event of
Default; and (b) require that, upon acceleration of that indebtedness or upon dissolution,
liquidation, or reorganization of Borrower, the Obligations must be paid in full before any payment
(whether of principal, premium, if any, interest, or otherwise) maybe made on that indebtedness.



     “Subsidiary” means, with respect to any Person, any corporation, partnership or joint venture
whether now existing or hereafter organized or acquired: (a) in the case of a corporation of which
a majority of the securities having ordinary voting power for the election of a majority of the
board of directors (other than securities having such power only by reason of the happening of a
contingency) are at the time owned by such Person and/or one or



13









 




more Subsidiaries of such Person or (b) in the case of a partnership or joint venture, in which
such Person is a general partner or joint venturer or of which a majority of the partnership or
other ownership interests are at the time owned by such Person and/or one or more of its
Subsidiaries.




     “to the best knowledge of” means, when modifying a representation, warranty, or other statement
of any Person, that the fact or situation described therein is known by the Person (or, in the case
of a Person other than a natural person, known by a responsible officer, director or partner of
that Person) making the representation, warranty, or other statement, or with the exercise of
reasonable due diligence under the circumstances (in accordance with the standard of what a
reasonable person in similar circumstances would have done) should have been known by the Person
(or, in the case of a Person other than a natural person, should have been known by a responsible
officer, director or partner of that Person).



     “Type” has the meaning specified in the definition of “Loan.”



     “Unrestricted Margin Stock” means, as of any date of determination, all of the Margin Stock
owned by Borrower and its Subsidiaries that is not Restricted Margin Stock.



     Section 1.02. Use of Defined Terms. Any defined term used in the plural preceded by the
definite article shall be taken to encompass all members of the relevant class. Any defined term
used in the singular preceded by “any” shall be taken to indicate any number of the members of the
relevant class.



     Section 1.03. Accounting Terms. All accounting terms not specifically defined in this
Agreement shall be construed in conformity with, and all financial data required to be submitted by
this Agreement shall be prepared in conformity with, generally accepted accounting principles
applied on a consistent basis, except as otherwise specifically prescribed herein.



     Section 1.04. Exhibits and Schedules. All exhibits and schedules to this Agreement, either
as originally existing or as the same may from time to time be supplemented, modified, or
amended, are incorporated herein by reference.



     Section 1.05. Pricing Levels. For purposes of this Agreement, the following terms have the
following meanings, subject to the concluding paragraph of this Section 1.05:



     “Rating Level I” means a period during which the long-term senior unsecured debt rating of
Borrower is equal to or better than (i) A- by S&P, or (ii) A3 by Moody’s.



14









 





     “Rating Level II” means a period (other than a Rating Level I) during which the long-term
senior unsecured debt rating of Borrower is equal to or better than (i) BBB+ by S&P, or (ii) Baal
by Moody’s.



     “Rating Level III” means any period which is not a Rating Level I or a Rating Level II.



     The credit ratings to be used for purposes of this Section 1.05 are those assigned to the
long-term senior unsecured debt of Borrower without third-party credit enhancement. Any rating
assigned to any other debt of Borrower shall be disregarded. The rating in effect at any date is
that in effect at the close of business on such date.



     If Borrower is split-rated and the ratings differential is one level, the higher of the two
ratings will apply (e.g., A-/Baal results in a Rating Level I and BBB/Baal results in a Rating
Level II). If Borrower is split-rated and the ratings differential is more than one level, the
rating one level below the higher of the two ratings shall be used
(e.g., A-/Baa2 results in a
Rating Level II). If, however, at any date Borrower’s long-term senior unsecured debt is not rated
by both S&P and Moody’s, then a Rating Level III shall apply; provided, however, if a rating by
either Moody’s or S&P is unavailable because Moody’s or S&P has ceased to be in the business of
providing ratings, or no longer provides ratings of companies similar to the Borrower, the rating
level of the remaining rating agency shall apply.



ARTICLE 2



Loans




     Section 2.01. Loans. Subject to the terms and conditions hereof, at any time and from time to
time from the Effective Date through the Maturity Date, each Bank severally agrees to make Loans to
Borrower in such principal amounts in Dollars as Borrower may request that do not, in the case of
all Loans made by such Bank, exceed in the aggregate outstanding at any one time that Bank’s
Commitment or, in the case of all Loans made by all Banks, exceed in the aggregate all Banks’
combined Commitments. Within the limits of each Bank’s Commitment, and subject to the other terms
and conditions hereof, Borrower may borrow under this Section 2.01, prepay under Section 2.07(b)
and reborrow under this Section 2.01.



     Section 2.02. Loan Accounts. The Loans made by each Bank shall be evidenced by one or more
loan accounts or records maintained by such Bank in the ordinary course of business. The loan
accounts or records maintained by the Administrative Agent and each Bank shall be conclusive absent
manifest error of the amount of the Loans made by the Banks to Borrower and the interest and



15









 




payments thereon. Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of Borrower hereunder to pay any amount owing with respect to the
Loans.




     Section 2.03. Procedure for Borrowing.



     (a) Each Borrowing shall be made upon Borrower’s irrevocable written
notice delivered to the Administrative Agent in the form of a Notice of Borrowing
in the form of Exhibit A hereto (which notice must be received by the
Administrative Agent (i) prior to noon (New York City time) three Business Days
prior to the requested Borrowing Date, in the case of Eurodollar Rate Loans and
(ii) prior to noon (New York City time) on the Business Day of the requested
Borrowing Date, in the case of Base Rate Loans, specifying: (A) the amount of
the Borrowing, which shall be in an aggregate minimum amount of $5,000,000 or
any multiple of $1,000,000 in excess thereof in the case of Eurodollar Rate Loans,
and in an aggregate minimum amount of $1,000,000 or any multiple of $100,000
in excess thereof in the case of Base Rate Loans; (B) the requested Borrowing
Date, which shall be a Business Day; (C) the Type of Loans comprising the
Borrowing; and (D) the duration of the Interest Period applicable to such Loans
included in such notice. If the Notice of Borrowing fails to specify the duration of
the Interest Period for any Borrowing comprised of Eurodollar Rate Loans, such
Interest Period shall be three months.



     (b) The Administrative Agent will promptly notify each Bank of its
receipt of any Notice of Borrowing and of the amount of such Bank’s Pro Rata
Share of that Borrowing.



     (c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Administrative Agent for the account of Borrower at
the Administrative Agent’s Payment Office by 2:00 p.m. (New York City time)
on the Borrowing Date requested by Borrower in funds immediately available to
the Administrative Agent. The proceeds of all such Loans will then be made
available to Borrower by the Administrative Agent by wire transfer in accordance
with written instructions provided to the Administrative Agent by Borrower of
like funds as received by the Administrative Agent.



     (d) After giving effect to any Borrowing, unless the Administrative
Agent shall otherwise consent, there may not be more than eight different Interest
Periods in effect.



     Section 2.04. Conversion and Continuation Elections.



     (a) Borrower may, upon irrevocable written notice to the Administrative Agent in
the form of a Notice of Conversion/Continuation in the form of Exhibit B hereto in accordance with
Section 2.04(b): (i) elect, as of any Business Day to



16









 




convert any Base Rate Loans (or any part thereof in an amount not less than $5,000,000, or that is
in an integral multiple of $1,000,000 in excess thereof) into Eurodollar Rate Loans; (ii) elect, as
of the last day of the applicable Interest Period to convert any Eurodollar Rate Loans (or any part
thereof in an amount not less than $1,000,000, or that is in an integral multiple of $100,000 in
excess thereof) into Base Rate Loans; or (iii) elect, as of the last day of the applicable Interest
Period, to continue any Eurodollar Rate Loans having Interest Periods expiring on such day (or any
part thereof in an amount not less than $5,000,000, or that is in an integral multiple of
$1,000,000 in excess thereof); provided, that if at any time the aggregate amount of Eurodollar
Rate Loans in respect of any Borrowing is reduced, by payment, prepayment, or conversion of part
thereof to be less than $5,000,000, such Eurodollar Rate Loans shall automatically convert into
Base Rate Loans, and on and after such date the right of Borrower to continue such Loans as, and
convert such Loans into, Eurodollar Rate Loans shall terminate.




     (b) Borrower shall deliver a Notice of Conversion/Continuation to be
received by the Administrative Agent not later than (i) noon (New York City
time) at least three Business Days in advance of the Conversion/Continuation
Date, if the Loans are to be converted into or continued as Eurodollar Rate Loans;
and (ii) 11:00 a.m. (New York City time) on the Conversion/Continuation Date, if
the Loans are to be converted into Base Rate Loans, specifying: (A) the proposed
Conversion/Continuation Date; (B) the aggregate amount of Loans to be
converted or continued; (C) the Type of Loans resulting from the proposed
conversion or continuation; and (D) other than in the case of conversions into
Base Rate Loans, the duration of the requested Interest Period.



     (c) If upon the expiration of any Interest Period applicable to Eurodollar
Rate Loans, Borrower has failed to select timely a new Interest Period to be
applicable to such Eurodollar Rate Loans, or if any Default or Event of Default
then exists, Borrower shall be deemed to have elected to convert such Eurodollar
Rate Loans into Base Rate Loans effective as of the expiration date of such
Interest Period.



     (d) The Administrative Agent will promptly notify each Bank of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is provided
by Borrower, the Administrative Agent will promptly notify each Bank of the
details of any automatic conversion. All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Bank.



     (e) Unless the Majority Banks otherwise consent, during the existence
of a Default or Event of Default, Borrower may not elect to have a Loan
converted into or continued as a Eurodollar Rate Loan.



17









 





     (f) After giving effect to any conversion or continuation of Loans, unless the
Administrative Agent shall otherwise consent, there may not be more than eight different Interest
Periods in effect.



     Section 2.05. Optional Reduction or Termination of Commitments. Borrower may at any time and
from time to time, upon three Business Days’ written notice to the Administrative Agent (which
shall promptly notify each Bank thereof) by telecopier, telegram, personal delivery or cable,
terminate in whole or in part the unused portions of the Commitments; provided, however, that in
each case each partial termination shall be in integral multiples of $1,000,000; provided,
further, that the Commitments may not be reduced at any time to an amount less than the aggregate
principal amount of all Borrowings then outstanding; provided, further, that after any such
termination, the Commitments may not thereafter be increased in any amount without the consent of
all of the Banks.



     Section 2.06. Interest.



     (a) Interest shall be payable on the outstanding daily unpaid principal
amount of each Loan from the date thereof until payment in full at the rates set
forth herein both before and after default and before and after maturity and
judgment, with interest on overdue interest to bear interest at the rate set forth in
Section 2.06(d), to the extent permitted by applicable Laws. Upon any partial
prepayment of any Base Rate Loan, interest accrued through the date of such
prepayment shall be payable on the next following April 1, July 1, October 1 or
January 1. Upon any partial or full prepayment of any Eurodollar Rate Loan,
interest accrued through the date of such payment, prepayment or conversion shall
be payable on such date.



     (b) Interest accrued on each Base Rate Loan shall be due and payable on
each April 1, July 1, October 1 and January 1, commencing with the first such
date upon which Base Rate Loans are outstanding hereunder. The unpaid
principal amount of any Base Rate Loan shall bear interest at a fluctuating rate per
annum equal to the Base Rate.



     (c) Interest accrued on each Eurodollar Rate Loan with an Interest
Period of three months or less shall be payable on the last day of the Interest
Period for that Eurodollar Rate Loan. Interest accrued on each six month
Eurodollar Rate Loan shall also be paid at the end of the third month of such
Interest Period. The unpaid principal amount of any Eurodollar Rate Loan shall
bear interest at a rate per annum equal to the sum of the Eurodollar Rate for that
Eurodollar Rate Loan for the applicable Interest Period plus the Applicable
Margin.



18









 





     (d) Notwithstanding Section (b) or (c) of this Section, during the existence of an Event
of Default, the unpaid principal amount of Loans (and to the extent not paid when due, interest
thereon and fees) shall bear interest, to the extent permitted by applicable Laws, at a
fluctuating interest rate per annum at all times equal to the interest rate otherwise applicable
to such Loan (or, if not a Loan, at the interest rate per annum otherwise payable under this
Agreement for Base Rate Loans) plus 2% per annum, payable upon demand.



     Section 2.07. Repayment and Prepayments of Principal.



     (a) If not sooner paid, the principal indebtedness hereunder owed to
each Bank shall be payable on the Maturity Date.



     (b) The principal indebtedness hereunder may, at any time and from
time to time, be prepaid in whole or in part without premium or penalty, except
that: (i) any partial prepayment shall be at least $1,000,000, (ii) the
Administrative Agent must have received written notice of any prepayment at
least one Business Day before the date of prepayment in the case of Base Rate
Loans and at least three Business Days before the date of prepayment in the case
of Eurodollar Rate Loans (and the Administrative Agent shall promptly notify
each Bank thereof); (iii) each prepayment of principal, except for partial
prepayments on Base Rate Loans, shall be accompanied by prepayment of interest
accrued through the date of payment on the amount of principal paid, and (iv) in
the case of any prepayment of any Eurodollar Rate Loan, Borrower shall
promptly reimburse each Bank for any loss or cost directly or indirectly resulting
from the prepayment, determined as set forth in Section 3.03.



     (c) Upon consummation of any Prepayment Event, the Borrower shall
notify the Administrative Agent as promptly as practicable thereof and of the Net
Proceeds in connection therewith. The Commitments shall automatically, without
further action by any party hereto, be reduced effective on the tenth Business Day
following the date of receipt by the Administrative Agent of such notice by an
amount equal to the largest multiple of $1,000,000 that does not exceed the
amount of the related Net Proceeds. If after giving effect to such reduction, the
aggregate outstanding principal amount of the Loans would exceed the aggregate
amount of the Commitments, then Borrower shall on the third Business Day
following the date of receipt by the Administrative Agent of such notice prepay
Loans in accordance with Section 2.07(b) to the extent necessary to eliminate
such excess.



     Section 2.08. Fees.



     (a) Facility Fee. Borrower shall pay to the Administrative Agent, for the account of the
Banks ratably in proportion to their Commitments, a facility fee on the daily average aggregate
amount of the Commitments (including both the




19










 




portion thereof that is used and the portion thereof that is unused), at the rate of (i)
0.045% per annum during each Rating Level I, (ii) 0.055% per annum during each Rating Level
II and (iii) 0.075% per annum during each Rating Level III. Such facility fee shall accrue
from and including the Effective Date to but excluding the Maturity Date, payable quarterly
in arrears on each April 1, July 1, October 1 and January 1 and on the Maturity Date. The
facility fee provided in this subsection shall be nonrefundable and shall accrue at all
times after the Effective Date, including at any time during which one or more conditions
in Article 4 are not met.




     (b) Agency Fees. Borrower shall pay an agency fee to the Administrative Agent for the
Administrative Agent’s own account as agreed upon between Borrower and the Administrative
Agent.



     Section 2.09. Payments by Borrower.



     (a) All payments to be made by Borrower shall be made without set-off, recoupment or
counterclaim. Except as otherwise expressly provided herein, all payments by Borrower shall
be made to the Administrative Agent for the account of the Banks at the Administrative
Agent’s Payment Office, and shall be made in immediately available funds, no later than
1:00 p.m. (New York City time) on the date specified herein. The Administrative Agent will
promptly distribute to each Bank its Pro Rata Share (or other applicable share as expressly
provided herein) of such payment in like funds as received. Any payment received by the
Administrative Agent later than 1:00 p.m. (New York City time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall continue to
accrue.



     (b) Unless the Administrative Agent receives notice from Borrower prior to the date on
which any payment is due to the Banks that Borrower will not make such payment in full as
and when required, the Administrative Agent may assume that Borrower has made such payment
in full to the Administrative Agent on such date in immediately available funds and the
Administrative Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Bank on such due date an amount equal to the amount then due such Bank.
If and to the extent Borrower has not made such payment in full to the Administrative
Agent, each Bank shall repay to the Administrative Agent on demand such amount distributed
to such Bank, together with interest thereon at the Federal Funds Rate.



     Section 2.10. Payments by the Banks to the Administrative Agent.



     (a) Unless the Administrative Agent receives notice from a Bank at least one Business
Day prior to the date of any Borrowing (or prior to the time of a Borrowing, in the case of
any Base Rate Loan), that such Bank will not make



20









 




available as and when required hereunder to the Administrative Agent for the account of Borrower
the amount of that Bank’s Pro Rata Share of the Borrowing, the Administrative Agent may
assume that each Bank has made such amount available to the Administrative Agent in
immediately available funds on the Borrowing Date and the Administrative Agent may (but
shall not be so required), in reliance upon such assumption, make available to Borrower
on such date a corresponding amount. If and to the extent any Bank shall not have made its
full amount available to the Administrative Agent in immediately available funds and the
Administrative Agent in such circumstances has made available to Borrower such amount, that
Bank shall on the Business Day following such Borrowing Date make such amount available to
the Administrative Agent, together with interest at the Federal Funds Rate. A notice of the
Administrative Agent submitted to any Bank with respect to amounts owing under this Section
(a) shall be conclusive, absent manifest error. If such amount is so made available, such
payment to the Administrative Agent shall constitute such Bank’s Loan on the date of
Borrowing for all purposes of this Agreement. If such amount is not made available to the
Administrative Agent on the Business Day following the Borrowing Date, the Administrative
Agent will notify Borrower of such failure to fund and, upon demand by the Administrative
Agent, Borrower shall pay such amount to the Administrative Agent for the Administrative
Agent’s account, together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.




     (b) The failure of any Bank to make any Loan on any Borrowing Date shall not relieve
any other Bank of any obligation hereunder to make a Loan on such Borrowing Date, but no
Bank shall be responsible for the failure of any other Bank to make the Loan to be made by
such other Bank on any Borrowing Date.



ARTICLE 3



Payments, Costs




     Section 3.01. Eurodollar. Upon notice from any Bank and subject to compliance with Section 9.09,
Borrower shall promptly reimburse that Bank for any increase in its costs, including
without limitation, taxes (and additional amounts equal to increases in taxes attributable
to payments by Borrower of such taxes), assessments or a change in the basis of taxation of
payments to such Bank (other than any tax, or changes in the rate of any tax, based upon
the income, profits or business of the Bank, or upon any personal property or franchise of
the Bank, or any similar tax which may be levied upon the Bank, or any change in the rate
of any such similar tax by the United States or any other government having jurisdiction,
or any political subdivision or taxing authority of any thereof), fees, charges, and/or
special deposit and/or other similar reserve requirements (other



21









 




than requirements expressly included herein in the determination of the Eurodollar Rate
hereunder) directly or indirectly resulting from or relating to any Eurodollar Rate Loan
due to any circumstance, except only any increase in costs that is attributable to the
prepayment by a Bank, in the case of a Eurodollar Rate Loan, of a time deposit in the
London interbank market, where Borrower has not paid or redesignated a corresponding
Eurodollar Rate Loan prior to the end of the term of such Eurodollar Rate Loan. As used in
the preceding sentence, “reserve requirements” shall be calculated after taking into
account any compensation received by the Bank through the computation of the Eurocurrency
Reserve Percentage. Amounts payable to a Bank under this Section 3.01 shall be determined
solely by that Bank upon the assumption that
the Bank funded 100% of that Eurodollar Rate Loan by the acceptance of a time deposit in the
London interbank market for a corresponding amount and term, regardless of whether the Bank
did so in fact. In attributing a Bank’s general costs relating to its Eurodollar operations
to any transaction under this Agreement, or averaging any cost over a period of time, that
Bank may use any reasonable attribution and/or averaging method it deems appropriate and
practical. The determination of such amount by the Bank shall be presumed correct in the
absence of manifest error.




     Section 3.02. Special Eurodollar Circumstances. If (x) any Regulatory Development relating to
the interbank Eurodollar markets shall at any time in the reasonable opinion of any Bank
make it unlawful or impractical for that Bank to fund or maintain a Eurodollar Rate Loan in
the London interbank market for a corresponding amount or term, or to continue that funding
or maintaining, or to determine or charge interest rates based upon any appropriate
Eurodollar Rate or (y) the Administrative Agent or any Bank determines in connection with
any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (i)
deposits in Dollars are not being offered to banks in the London interbank market for the
applicable amount and Interest Period of such Eurodollar Rate Loan, (ii) adequate and
reasonable means do not exist for determining the Eurodollar Rate for such Eurodollar Rate
Loan, or (iii) the Eurodollar Rate for such Eurodollar Rate Loan does not adequately and
fairly reflect the cost to the Banks of funding such Eurodollar Rate Loan, the
Administrative Agent or that Bank, as applicable, shall promptly notify the Administrative
Agent and the Banks who shall notify Borrower and, notwithstanding any other provision of
this Agreement:



     (a) the then outstanding principal amounts of any outstanding Eurodollar Rate Loan
shall be automatically converted into a Base Rate Loan; and



     (b) no Eurodollar Rate Loan may be made thereafter until that Bank determines that to
do so would be lawful or practical.


     
Upon receipt of such notice, Borrower may revoke any pending request for a Borrowing,
conversion or continuation of Eurodollar Rate Loans or, failing
that, will be deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.



22









 





     Section 3.03. Eurodollar Indemnification. Borrower hereby indemnifies each Bank against, and
agrees to hold each Bank harmless from and reimburse each Bank on demand for all costs,
expenses, claims, penalties, liabilities, losses, legal fees and damages (including without
limitation any interest paid or that would be paid by a Bank for deposits in Dollars in the
London interbank market and any loss sustained or that would be sustained by a Bank in
connection with the reemployment of funds) incurred or sustained, or that would be incurred
or sustained, by each Bank, as reasonably determined by the Bank, as a result of (a) any
failure of Borrower to consummate, or the failure of any condition required for the
consummation of, any Eurodollar Rate Loan on the date or in the amount specified in any
notice, requesting or designating a Eurodollar Rate Loan or (b) Borrower’s prepayment of
any Eurodollar Rate Loan before the last
day of its Interest Period. The indemnification shall be determined as though the Bank had
funded or would have funded 100%, as the case may be, of the Eurodollar Rate Loan in the
London interbank market for a corresponding amount and term. The determination of such amount
by the Bank shall be presumed correct in the absence of manifest error.



     Section 3.04. Computation of Interest and Fees. All computations of interest hereunder shall be
calculated on the basis of a year of 365 days or 366 days, as the case may be, and the
actual number of days elapsed, except that computations of interest on all Eurodollar Rate
Loans and computations of interest on Base Rate Loans when the Base Rate is calculated by
reference to the Federal Funds Rate shall be calculated on the basis of a year of 360 days
and the actual number of days elapsed. All computations of fees hereunder shall be
calculated on the basis of a year of 360 days and the actual number of days elapsed.



     Section 3.05. Holidays. If any payment to be made by Borrower on a Loan shall come due on a day
other than a Business Day, payment shall be made on the next succeeding Business Day and
the extension of time shall be reflected in computing interest.



     Section 3.06. Payment Free of Taxes. Subject to compliance with Section 9.09, any payments made
by Borrower hereunder shall be made free and clear of, and without reduction by reason of,
any withholding tax.



     Section 3.07. Funding Sources. Nothing in this Agreement shall be deemed to obligate any Bank to
obtain the funds for any Borrowing in any particular place or manner or to constitute a
representation by any Bank that it has obtained or will obtain the funds for any Borrowing
in any particular place or manner.



23









 





     Section 3.08. Failure to Charge Not Subsequent Waiver. Any decision by the Administrative Agent
or any Bank not to require payment of any fee or costs, or to reduce the amount of the
payment required for any fee or costs or to calculate any fee or costs in any particular
manner, for any particular Eurodollar Rate Loan shall in no way limit the Administrative
Agent’s or that Bank’s right to require full payment of any fee or costs for any other
Eurodollar Rate Loan or to calculate any fee or costs in another manner.



     Section 3.09. Other Costs. If, at any time subsequent to the Effective Date, any Bank shall have
reasonably determined that the adoption of any Law regarding capital adequacy, any reserve,
special deposit or similar requirements generally applicable to commitments or credit
arrangements similar to the Commitments (other than requirements expressly included herein
in the determination of the Eurodollar Rate) hereunder, or any change therein, or any
change in the interpretation or administration thereof by any Governmental Agency, central
bank or comparable agency charged with the interpretation or administration thereof, or
compliance by said Bank or any corporation controlling said Bank with any request or
directive regarding capital adequacy, any reserve, special deposit or similar requirement
(other than requirements expressly included herein in the determination of the Eurodollar
Rate hereunder) (whether or not having the force of Law) of any such Governmental Agency,
central bank or
comparable agency, has or would have the effect of increasing the cost to, or reducing the
income received by or imposing any expense (including loss of margin), on any said Bank or
any corporation controlling said Bank, or, in the case of any capital adequacy requirement,
reducing the rate of return on said Bank’s or corporation’s capital as a consequence of its
obligations hereunder to a level below that which said Bank or corporation could have
achieved but for such adoption, change or compliance (taking into consideration said Bank’s
or corporation’s policies with respect to capital adequacy), then from time to time, each
affected Bank may notify Borrower (with a copy to Administrative Agent) of the additional
amount or amounts as will compensate said Bank or corporation for such increase, reduction or
imposition and, upon demand, Borrower shall pay said affected Bank or corporation such amount
or amounts. In determining such amount, the affected Bank or corporation may use reasonable
attribution and/or averaging methods which it deems appropriate and practical. In no event
shall Borrower be liable for any such amounts relating to periods of time more than three
months prior to the date upon which Borrower receives notice from the affected Bank, except
to the extent that such periods of time (i) relate to retroactive applications of any such
Law or retroactive interpretations or administrations of any such Law or (ii) represent
periods during which it is impracticable for any such Bank to calculate any such amounts due;
provided, however, that such information shall be provided to Borrower as soon as
practicable. Said affected Bank shall, upon Borrower’s request, provide Borrower
with a statement showing in reasonable detail, the basis for determining the amount charged
hereunder.



24









 





     Section 3.10. Survivability. Borrower’s obligations under this Article 3 shall survive the date
on which all Borrowings hereunder were fully paid.



ARTICLE 4




Conditions




     Section 4.01. Effective Date. This Agreement shall become effective (as of the date first
written above) only upon the satisfaction of all of the following conditions precedent:



     (a) The Administrative Agent shall have received all of the following, each dated as
of the Effective Date (unless otherwise specified or unless the Administrative Agent
otherwise agrees) and all in form and substance satisfactory to the Administrative Agent
and legal counsel for the Administrative Agent:




     (i) a certificate signed by a Designated Officer (A) stating that the execution,
delivery and performance of the Loan Documents by Borrower was duly authorized by
resolution of its board of directors on the date therein specified and that such
authorization is still in force and effect, (B) setting forth such resolution adopted by
such board of directors, (C) setting forth the name of each person authorized to sign any
Loan Document on behalf of Borrower with specimen signatures of such persons, and (D)
stating that the representations
and warranties contained in Article 5 are true and correct on and as of the Effective Date,
no state of facts constituting a Default or an Event of Default has occurred and is
continuing, and Borrower shall be in compliance with all the terms and provisions of the Loan
Documents;




     (ii) a current good standing certificate for Borrower issued by the appropriate
Governmental Agency in the jurisdiction of incorporation;




     (iii) a certificate of good standing of Borrower as a foreign corporation in
California;




     (iv) an opinion of counsel for the Borrower signed by appropriate legal counsel;




     (v) an opinion of counsel for the Administrative Agent; and




     (vi) such other certificates, documents, consents, or opinions that any Bank may
reasonably request.



25









 





     Section 4.02. Any Borrowing, Conversion or Continuation. The obligation of the Banks to
make any Loan or to convert into or continue any Eurodollar Rate Loan is subject to the
following conditions precedent:



     (a) the representations and warranties contained in Article 5 (other than in Sections
5.06 and 5.09) shall be true and correct in all material respects, and shall be deemed
made, on and as of the date of the Loan, conversion or continuation as though made on and
as of that date, and no state of facts constituting a Default or an Event of Default shall
have occurred and be continuing; and, upon its request therefor, the Administrative Agent
shall have received, dated as of the date of the Loan, a certificate of a Designated
Officer from Borrower to that effect, with any changes or exceptions thereto being
described in a schedule attached to such certificate and with such changes or exceptions
being subject to the approval of the Majority Banks;



     (b) the Administrative Agent shall have timely received a Notice of Borrowing or a
Notice of Conversion/Continuation, as applicable, in compliance with Article 2; and



     (c) in the case of the initial Loan, the Merger shall have been consummated in all
material respects in accordance with applicable law and the Merger Agreement prior to or
concurrently with the making of the initial Loan.



ARTICLE 5




Representations and Warranties




     Borrower represents and warrants to the Administrative Agent and the Banks that:



     Section 5.01. Existence and Qualification; Power; Compliance with Law.



     (a) Borrower is a corporation duly formed, validly existing and in good standing under
the laws of Delaware. The chief executive offices of Borrower are in Pasadena, California.
Borrower is duly qualified or registered to transact business in California and each other
jurisdiction in which the conduct of its business or the ownership of its properties make
such qualification or registration necessary, except where the failure so to qualify or
register would not have a Material Adverse Effect. Borrower has all requisite corporate
power and authority to conduct its business, to own and lease its properties and to
execute, deliver and perform all of its obligations under the Loan Documents.



     (b) All outstanding shares of capital stock of Borrower are duly authorized, validly
issued, fully paid, nonassessable, and issued in compliance with all applicable state and
federal securities and other laws.



26









 





     (c) Borrower is in compliance with all Laws and other legal requirements applicable
to its business, has obtained all authorizations, consents, approvals, orders, licenses and
permits from, and has accomplished all filings, registrations and qualifications with, or
obtained exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure so to comply, file,
register, qualify or obtain exemptions would not have a Material Adverse Effect.



     Section 5.02. Authority Compliance with Other Instruments and Government Regulations. The
execution, delivery, and performance by Borrower of the Loan Documents have been duly
authorized by all necessary action and do not and will not (a) require any consent or
approval not heretofore obtained of any stockholder, security holder or creditor; (b)
violate or conflict with any provision of Borrower’s charter, certificate, articles of
incorporation or bylaws, or amendments thereof; (c) result in or require the creation or
imposition of any Lien or Right of Others upon or with respect to any property now owned or
leased or hereafter acquired by Borrower; (d) violate any provision of any Laws (including
without limitation Regulation U of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination, or award presently in effect
having applicability to Borrower; or (e) result in a breach of or constitute a default
under, or cause or permit the acceleration of any obligation owed under, any indenture or
loan or credit agreement or any other material agreement, lease, or instrument to which
Borrower is a party or by which Borrower or any of its property, is bound or affected; and
Borrower is not in default under any Laws, order, writ, judgment, injunction, decree,
determination, award, indenture, agreement, lease, or instrument described in Section
5.02(e) in any respect that would have a Material Adverse Effect.



     Section 5.03. No Governmental Approvals Required. No authorization, consent, approval, order,
license or permit from, or filing, registration, or qualification with, or exemption from
any of the foregoing from, any Governmental Agency is or will be required to authorize or
permit under applicable Laws the execution, delivery, and performance by Borrower of the
Loan Documents.



     Section 5.04. Subsidiaries.



     (a) Schedule 5.04 hereto correctly sets forth as of December 30, 2006 the names,
forms of legal entity and jurisdictions of formation of all Subsidiaries of Borrower and
states whether each is or is not a Consolidated Subsidiary. Except for shares of capital
stock or partnership interests in a Subsidiary required by applicable Laws to be held by a
director or comparable official of that Subsidiary and unless otherwise indicated in
Schedule 5.04 or where the failure to own all of the shares of capital stock or partnership
interests in such Subsidiary would not have a Material Adverse Effect, all of the
outstanding shares of capital



27









 




stock or partnership interests of each Subsidiary are owned beneficially by Borrower, and,
to the best knowledge of Borrower, all securities and interests so owned are duly
authorized, validly issued, fully paid, non-assessable, and issued in compliance with all
applicable state and federal securities and other laws, and are free and clear of all Liens
and Rights of Others.




     (b) Each Subsidiary is a corporation or other legal entity duly formed, validly
existing, and in good standing under the laws of its jurisdiction of formation, is duly
qualified to do business and is in good standing in each jurisdiction in which the conduct
of its business or the ownership or leasing of its properties makes such qualification
necessary, except where the failure to be so duly qualified and in good standing does not
have a Material Adverse Effect, and has all requisite legal power and authority to conduct
its business and to own and lease its properties.



     (c) Each Subsidiary is in compliance with all Laws and other requirements applicable
to its business and has obtained all authorizations, consents, approvals, orders, licenses,
and permits from, and has accomplished all filings, registrations, and qualifications with,
or obtained exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, except where the failure to be in such
compliance, obtain such authorizations, consents, approvals, orders, licenses, and permits,
accomplish such filings, registrations, and qualifications, or obtain such exemptions, does
not have a Material Adverse Effect.



     Section 5.05. Financial Statements. Borrower has furnished to each Bank the following financial
statements: (i) the consolidated balance sheet of Borrower and its Consolidated
Subsidiaries as at December 30, 2006, and the related consolidated statements of income,
shareholders’ equity and changes in financial position for the year then ended, together
with the report of PricewaterhouseCoopers on such financial statements and (ii) the
consolidated balance sheet of Borrower and its Consolidated Subsidiaries as at March 31,
2007, and the related consolidated statements of income, shareholder’s equity and changes
in financial position for the three months then ended. The foregoing financial statements
are in accordance with the books and records of Borrower and its Consolidated Subsidiaries,
were prepared in accordance with generally accepted accounting principles applied
consistently throughout the periods covered thereby and fairly present the consolidated
financial condition and results of operations of Borrower and the Consolidated Subsidiaries
as at the dates and for the periods covered thereby.



     Section 5.06. No Material Adverse Change or Other Liabilities. Except as set forth in Section
5.09, since December 30, 2006, there has been no event or circumstance that has had a
Material Adverse Effect. Borrower and the Consolidated Subsidiaries do not have any
material liability or material contingent
liability required to be reflected or disclosed in the financial statements or notes thereto
described in Section 5.05 which is not so reflected or disclosed.



28









 





     Section 5.07. Title to Assets. Borrower has good and valid title to all of the assets reflected
in the financial statements described in Section 5.05 (except for assets that are sold in
transactions that are not prohibited by the terms of this Agreement) free and clear of all
Liens and Rights of Others other than (a) those reflected or disclosed in such financial
statements or notes thereto, (b) immaterial Liens or Rights of Others not required under
generally accepted accounting principles to be so reflected or disclosed, and (c) Liens or
Rights of Others permitted pursuant to Section 7.02.



     Section 5.08. Regulated Industries. Neither Borrower nor any of its Subsidiaries is required to
be registered under the Investment Company Act of 1940.



     Section 5.09. Litigation. There are no actions, suits, or proceedings pending or, to the best of
Borrower’s knowledge, threatened against or affecting Borrower or any of its Subsidiaries
or any property of any of them in any court of law or before any Governmental Agency which,
if determined adversely to any of them, would have a Material Adverse Effect, except as set
forth in Schedule 5.09 annexed hereto or as referred to in Borrower’s news releases and
filings with the Securities and Exchange Commission made or filed on or prior to the
Effective Date (including the Canadian Department of Justice and Australian Competition and
Consumer Commission investigations into industry competitive practices and any related or
threatened inquiries, claims, proceedings or lawsuits pertaining to these investigations or
to the subject matter thereof or of the concluded investigations by the U.S. Department of
Justice and the European Commission (including a purported class action seeking treble
damages for alleged unlawful competitive practices, and purported class actions related to
alleged disclosure and fiduciary duty violations pertaining to alleged unlawful competitive
practices, which were filed after the announcement of the investigation by the U.S.
Department of Justice), as well as the impact of potential violations of the U.S. Foreign
Corrupt Practices Act based on issues in China).



     Section 5.10. Binding Obligations. This Agreement constitutes the legal, valid, and binding
obligation of Borrower, enforceable against Borrower in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting creditors’ rights generally or by
equitable principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion.



     Section 5.11. No Default. No Default or Event of Default exists or has resulted from the
incurring of any Obligations by Borrower. As of the Effective
Date, neither Borrower nor any Subsidiary is in default under or with respect to any
material contractual obligation in any respect which, individually or together with all
such defaults, has had a Material Adverse Effect.



29









 





     Section 5.12. ERISA. (a) The actuarial present value of all vested accrued benefits under all
Pension Plans does not exceed the current fair market value of the assets determined on an
ongoing basis of the Pension Plans by an amount which would materially affect the financial
condition or Borrower’s abilities to pay or
perform its obligations under the Loan Documents; (b) no Pension Plan or trust created
thereunder has incurred any “accumulated funding deficiency” (as such term is defined in
Section 302 of ERISA) whether or not waived, since the effective date of ERISA; and (c) based
on information received from the respective administrators of “multiemployer plans” (as
defined in ERISA) to which Borrower or any Subsidiary contributes, the aggregate present
value of the unfunded vested benefits allocable to Borrower or such Subsidiaries under all
such multiemployer plans is not an amount which would materially affect the financial
condition or Borrower’s abilities to pay or perform its obligations under the Loan Documents.



     Section 5.13. Regulation U. Neither Borrower nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for purpose of
“buying” or “carrying” any Margin Stock within the meanings of Regulation U of the Board of
Governors of the Federal Reserve System. No part of any Borrowing will be used to buy or
carry any Margin Stock, or to extend credit to others for that purpose, or for any purpose,
if to do so would violate the provisions of Regulation U,



     Section 5.14. Tax Liability. Borrower and its Subsidiaries have filed all income tax returns
which are required to be filed, and have paid, or made provision for the payment of, all
taxes which have become due pursuant to said returns or pursuant to any assessment received
by Borrower or any Subsidiary, except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided, and except such taxes the
failure of which to pay will not have a Material Adverse Effect.



     Section 5.15. Copyrights, Patents, Trademarks and Licenses, Etc. Borrower or its Subsidiaries
own or are licensed or otherwise have the right to use all of the patents, trademarks,
service marks, trade names, copyrights, contractual franchises, authorizations and other
rights that are reasonably necessary for the operation of their respective businesses,
where the failure to have such rights would have a Material Adverse Effect. To the best
knowledge of Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be employed, by
Borrower or any Subsidiary infringes upon any rights held by any other Person, where such
infringement would create a Material Adverse Effect.



30









 





     Section 5.16. Environmental Matters. Borrower conducts in the ordinary course of business a
review of the effect of existing Environmental Laws and existing Environmental Claims on
its business, operations and properties, and as a result thereof Borrower has reasonably
concluded that such Environmental Laws and Environmental Claims would not, individually or
in the aggregate, have a Material Adverse Effect.



     Section 5.17. Insurance. The properties of Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of Borrower, in such
amounts, with such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties in localities where
Borrower or such Subsidiary operates.



     Section 5.18. Disclosure. No written statement made by Borrower to the Banks in connection with
the Loan Documents or any Loan contains or will contain any untrue statement of a material
fact or omits or will omit a material fact necessary to make the statements contained or
made therein not misleading. There is no fact which Borrower has not disclosed to the Banks
in writing which materially and adversely affects nor, so far as Borrower can now foresee,
is reasonably likely to prove to affect materially and adversely the business, operations,
properties, prospects, profits or condition (financial or otherwise) of Borrower and its
Subsidiaries, taken as a whole, or the ability of Borrower to perform the Obligations.



ARTICLE 6




Affirmative Covenants




     As long as any Borrowing remains unpaid, or any other Obligation remains unpaid or
unperformed, or any commitment to make Loans remains in effect, Borrower shall, and (except
in the case of Section 6.01, Section 6.02 and Section 6.03 shall cause each of its
Subsidiaries to, unless the Majority Banks otherwise consent in writing:



     Section 6.01. Financial and Business Information. Deliver to the Banks at its own expense:



     (a) As soon as reasonably possible, and in any event within 60 days after the close of
each of the first three fiscal quarters of Borrower, (i) the consolidated balance sheet of
Borrower and its Consolidated Subsidiaries as of the end of such quarter, setting forth in
comparative form the corresponding figures for the corresponding quarter of the preceding
fiscal year, if available, and




31










 




(ii) the consolidated statements of profit and loss and changes in financial position of
Borrower and its Consolidated Subsidiaries for such quarter and for the portion of the fiscal year
ended with such quarter, setting forth in comparative form the corresponding periods of the
preceding fiscal year, all in reasonable detail, prepared in accordance with generally accepted
accounting principles consistently applied and certified by the principal financial officer of
Borrower, subject to normal year-end audit adjustments;




     (b) As soon as reasonably possible, and in any event within 120 days after the close of
each fiscal year of Borrower, (i) the consolidated balance sheets of Borrower and its Consolidated
Subsidiaries as at the end of such fiscal year, setting forth in comparative form the corresponding
figures at the end of the preceding fiscal year and (ii) the consolidated statements of profit and
loss and changes in financial position of Borrower and its Consolidated Subsidiaries for such
fiscal year, setting forth in comparative form the corresponding figures for the previous fiscal
year. Such consolidated balance sheet and statements shall be prepared in reasonable detail, in
accordance with generally accepted accounting principles consistently applied, and shall be
accompanied by a report and opinion of PricewaterhouseCoopers or other independent public
accountants selected by Borrower and reasonably satisfactory to the Majority Banks, which report
and opinion shall be prepared in accordance with generally accepted auditing standards and shall be
subject only to such qualifications and exceptions as are acceptable to the Majority Banks.



     Section 6.02. Certificates, Other Information. Deliver or make available to the Banks via
Borrower’s website, averydennison.com or at its own expense:



     (a) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b), a Compliance Certificate executed by a Designated
Officer;



     (b) promptly after request by any Bank, copies of any material report
filed by Borrower or any of its Subsidiaries with any Governmental Agency
unless to do so would violate applicable Laws; and



     (c) promptly after the same are available, at any Bank’s request, copies
of each annual report, proxy or financial statement or other material report or
communication sent to all stockholders of Borrower, and copies of all annual,
regular, periodic and special reports and registration statements which Borrower
files with the Securities and Exchange Commission or any similar or
corresponding Governmental Agency or with any securities exchange.



     Section 6.03. Notices. Promptly notify the Administrative Agent and each Bank:



32









 





     (a) promptly upon becoming aware of the occurrence of any (i)
“reportable event” (as such term is defined in Section 4043 of ERISA) or (ii)
“prohibited transaction” (as such term is defined in Section 406 or Section
2003(a) of ERISA) with respect to which Borrower may be liable for excise tax
under Section 4975 of the Code in connection with any Pension Plan or any trust
created thereunder, in either case which may result in a Material Adverse Effect, a
written notice specifying the nature thereof, what action Borrower and/or any of
its Subsidiaries is taking or proposes to take with respect thereto, and, when
known, any action taken by the Internal Revenue Service with respect thereto; it
being understood that for purposes of this provision, “aware” means that such
event or transaction must be actually known to the chief financial officer or the
treasurer of Borrower;



     (b) promptly upon, and in any event within five Business Days after,
becoming aware of the existence of any condition or event which constitutes a
Default or an Event of Default a written notice specifying the nature and period of
existence thereof and what action Borrower is taking or proposes to take with
respect thereto; it being understood that for purposes of this provision, “aware”
means that such condition or event must be actually known to the chief financial
officer or the treasurer of Borrower;



     (c) promptly upon becoming aware that the holder of any evidence of
indebtedness or other security of Borrower or any of its Subsidiaries that is
material to Borrower and its consolidated Subsidiaries, considered as a whole, has
given notice or taken any other action with respect to a claimed default or event of
default, a written notice specifying the notice given or action taken by such holder
and the nature of the claimed default or event of default and what action Borrower
or its Subsidiary is taking or proposes to take with respect thereto; it being
understood that for purposes of this provision,
“aware” means that such notice or
action must be actually known to the chief financial officer or the treasurer of
Borrower;



     (d) of any change in accounting policies or financial reporting practices
by Borrower or any of its consolidated Subsidiaries that is material to Borrower
and its consolidated Subsidiaries considered as a whole; and



     (e) such other data and information as from time to time may be
reasonably requested by any Bank.



     Section 6.04. Payment of Taxes and Other Potential Liens. Pay and discharge promptly, all
taxes (including any withholding taxes required by law to be paid by the Borrower), assessments,
and governmental charges or levies imposed upon it, upon its property or any part thereof, upon its
income or profits or any part thereof, in each case that, individually or in the aggregate, are
material to Borrower and its Subsidiaries, considered as a whole, or upon any right or



33









 







interest of the Banks under any Loan Document; except that Borrower and its Subsidiaries shall not
be required to pay or cause to be paid (a) any income or gross receipts tax generally applicable to
banks or (b) any tax, assessment, charge, or levy that is not yet past due, or is being contested
in good faith by appropriate proceedings, as long as the relevant entity has established and
maintains adequate reserves for the payment of the same and by reason of such nonpayment no
material property of Borrower is in danger of being lost or forfeited.



     Section 6.05. Preservation of Existence. Preserve and maintain their respective existence,
licenses, rights, franchises, and privileges in the jurisdiction of their formation and all
authorizations, consents, approvals, orders, licenses, permits, or exemptions from, or
registrations with, any Governmental Agency that are necessary for the transaction of their
respective businesses, and qualify and remain qualified to transact business in each jurisdiction
in which such qualification is necessary in view of their respective business or the ownership or
leasing of their respective properties, except that the failure to preserve and maintain any
particular license, right, franchise, privilege, authorization, consent, approval, order, permit,
exemption, or registration, or to qualify or remain qualified in any jurisdiction, that would not
have a Material Adverse Effect will not constitute a violation of this covenant, and except that
nothing in this Section 6.05 shall prevent the termination of the business or existence (corporate
or otherwise) of any Subsidiary of Borrower which in the reasonable judgment of the Board of
Directors of Borrower is no longer necessary or desirable.



     Section 6.06. Maintenance of Properties. Maintain, preserve, and protect all of their
respective properties and equipment in good order and condition, subject to wear and tear in the
ordinary course of business and, in the case of unimproved properties, damage caused by the natural
elements, and not permit any waste of their respective properties, except where a failure to
maintain, preserve, and protect a particular item of property or equipment would not result in a
Material Adverse Effect.



     Section 6.07. Maintenance of Insurance. Maintain insurance with responsible insurance
companies in such amounts and against such risks as is usually carried by responsible companies
engaged in similar businesses and owning similar assets in the general areas in which Borrower and
its Subsidiaries operate except to the extent that Borrower or a Subsidiary is, in the reasonable
opinion of a Designated Officer, adequately self-insured in a manner comparable to responsible
companies engaged in similar businesses and owning similar assets in the general areas in which
Borrower and its Subsidiaries operate.



     Section 6.08. Compliance With Laws. Comply with the requirements of all applicable Laws and
orders of any Governmental Agency, noncompliance with which would result in a Material Adverse
Effect, except that Borrower and its Subsidiaries need not comply with a requirement then being
contested by any of
them in good faith by appropriate proceedings so long as no interest of the Banks
would be materially impaired thereby.



34









 





     Section 6.09. Inspection Rights. At any time during regular business hours and as often as
reasonably requested, permit any Bank or any employee, agent, or representative thereof to examine,
audit and make copies and abstracts from the records and books of account of, and to visit and
inspect the properties of Borrower and its Subsidiaries and to discuss the affairs, finances, and
accounts of Borrower and its Subsidiaries with any of their officials, customers or vendors, and,
upon request, to furnish promptly to each Bank true copies of all material financial information
formally made available to the senior management of Borrower and reasonably identifiable by
Borrower. Nothing herein shall obligate Borrower to disclose any information to the Banks
respecting trade secrets or similar proprietary information constituting products or processes
relating to the business of Borrower or its Subsidiaries or in violation of applicable Laws.



     Section 6.10. Keeping of Records and Books of Account. Keep adequate records and books of
account reflecting financial transactions in conformity with generally accepted accounting
principles applied on a consistent basis and all applicable requirements of any Governmental Agency
having jurisdiction over Borrower or any of its Subsidiaries, except where the failure to comply
with generally accepted accounting principles or such applicable requirements would not make the
records and books of accounts of Borrower and its Subsidiaries, taken as a whole, materially
misleading.



     Section 6.11. ERISA Compliance. Comply with the minimum funding requirements of ERISA with
respect to all Pension Plans.



     Section 6.12. Environmental Laws. Conduct its operations and keep and maintain its property in
compliance with all Environmental Laws where failure to do so will have a Material Adverse Effect.



     Section 6.13. Use of Proceeds. Use the proceeds of the Loans for working capital, commercial
paper backup and other general corporate purposes not in contravention of any Law or of any Loan
Document, including acquiring other Persons so long as the acquisition is approved by the board of
directors, requisite general partners, requisite managers or other governing board or body of the
Person being acquired.



ARTICLE 7



Negative Covenants




     As long as any Borrowing remains unpaid or any other Obligation remains unpaid or
unperformed, or any commitment to make Loans remains in effect,
Borrower shall not, and shall cause each of its Subsidiaries to not, unless the
Majority Banks otherwise consent in writing:



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     Section 7.01. Type of Business. Make any substantial change in the present character of
the business of Borrower and its Subsidiaries, taken as a whole.



     Section 7.02. Liens. Create, incur, assume or permit to exist any Lien upon any of its
property or assets (other than Unrestricted Margin Stock) now owned or hereafter acquired if the
aggregate obligations secured by all such Liens exceeds, or would exceed (giving effect to any
proposed new Lien) an amount equal to 10% of Consolidated Net Worth, except:



     (a) Liens for taxes not delinquent or being contested in good faith by
appropriate proceedings in accordance with Section 6.04;



     (b) Liens arising in connection with workers’ compensation,
unemployment insurance or social security obligations;



     (c) mechanics’, workmen’s, materialmen’s, landlords’, carriers’, or
other like Liens arising in the ordinary course of business with respect to
obligations which are not due or which are being contested in good faith by
appropriate proceedings;



     (d) minor Liens which do not in the aggregate materially detract from
the value of its property or assets or materially impair their use in the operation of
the business of Borrower or the Subsidiary owning same;



     (e) Liens in existence on property at the time of its acquisition by
Borrower or its Subsidiary;



     (f) Liens under the Loan Documents; and



     (g) purchase money Liens in connection with nonrecourse tax sale and
leaseback transactions.



     Section 7.03. Investments. Make or permit to exist any Investment in any Person, except:



     (a) credit extended in connection with the sale of goods or rendering of
services in the ordinary course of business;



     (b) Investments in a Consolidated Subsidiary;



     (c) Acquisitions;



36









 





     (d) Investments consisting of Cash Equivalents;



     (e) Investments that individually or in the aggregate would not result in
a Material Adverse Effect; and



     (f) Investments in corporations, joint ventures, partnerships and other
Persons not majority-owned by Borrower and its Subsidiaries not exceeding 5%
of Consolidated Net Worth in the aggregate.



     Section 7.04. Contingent Obligations. Incur or permit to exist any Contingent Obligation if
the aggregate of all Contingent Obligations exceeds, or would exceed (giving effect to any proposed
new Contingent Obligation) an amount equal to 5% of Consolidated Net Worth, except the endorsement
of negotiable instruments in the ordinary course of collection.



     Section 7.05. Subordinated Debt. Make any principal prepayment on any Subordinated Debt or, if
and so long as Default or Event of Default exists, any payment of principal or interest on any
Subordinated Debt.



     Section 7.06. Sale of Assets or Merger. Sell or otherwise dispose of all or substantially all
of the assets, or merge with any other corporation unless Borrower or one of its Subsidiaries is
the surviving corporation except that the sale of all or substantially all of the assets of a
Subsidiary of Borrower, or the merger of any Subsidiary of Borrower when it is not the surviving
corporation shall not violate this Section 7.06 if the assets of that Subsidiary are not material
in relation to the assets of Borrower and its Subsidiaries, taken as a whole.



     Section 7.07. Financial Covenants.



     (a) Not permit the Leverage Ratio to exceed 3.50 to 1.00 at any time;
and



     (b) Not permit the Interest Coverage Ratio to be less than 3.50 to 1.00 at
any time.



     Section 7.08. Use of Proceeds. Use any portion of the Loan proceeds, in any manner that might
cause the Loan or the application of such proceeds to violate Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or any other regulation of
such Board or to violate the Securities Exchange Act of 1934, as amended, in each case as in effect
on the date or dates of such Loan and such use of proceeds.



37









 





ARTICLE 8



Events of Default and Remedies Upon Events of Default




     Section 8.01. Events of Default. There will be a default hereunder if any one or more
of the following events (“Events of Default”) occurs and is continuing, whatever the reason
therefor:



     (a) failure of Borrower to pay any installment of principal when due or
to pay interest hereunder or any fee or other amounts due to any Bank hereunder
within three Business Days after the date when due; or



     (b) Borrower fails to perform or observe any other term, covenant, or
agreement contained in any Loan Document on its part to be performed or
observed within 30 days after the date performance is due; or



     (c) any representation or warranty in any Loan Document or in any
certificate, agreement, instrument, or other document made or delivered pursuant
to or in connection with any Loan Document proves to have been incorrect when
made in any material respect; or



     (d) Borrower or any of its Subsidiaries (i) fails to pay the principal, or
any principal installment, or any present or future indebtedness for borrowed
money, or any guaranty of present or future indebtedness for borrowed money,
within 10 days of the date when due (or within any longer stated grace period),
whether at the stated maturity, upon acceleration, by reason of required
prepayment or otherwise in excess of $50,000,000, or (ii) fails to perform or
observe any other term, covenant, or agreement on its part to be performed or
observed in connection with any present or future indebtedness for borrowed
money, or any guaranty of present or future indebtedness for borrowed money, in
excess of $50,000,000, if as a result of such failure any holder or holders thereof
(or an agent or trustee on its or their behalf) has the right to declare it due before
the date on which it otherwise would become due; or



     (e) any Loan Document, at any time after its execution and delivery and
for any reason other than the agreement of the Banks or satisfaction in full of all
the Obligations, ceases to be in full force and effect or is declared by a court of
competent jurisdiction to be null and void, invalid, or unenforceable in any
respect which is, in the reasonable opinion of the Majority Banks, materially
adverse to the interest of the Banks; or Borrower denies that it has any or further
liability or obligation under any Loan Document; or



     (f) a final judgment against Borrower or any of its Subsidiaries is
entered for the payment of money in excess of $50,000,000, and remains
unsatisfied without procurement of a stay of execution for 45 days after the date
of entry of judgment or in any event later than five days prior to the date of any proposed sale
under such judgment; or



38









 





     (g) any Domestic Subsidiary, any Significant Subsidiary or Borrower is the subject of an
order for relief by a bankruptcy court, or is unable or admits in writing its inability to pay its
debts as they mature, or makes an assignment for the benefit of creditors; or applies for or
consents to the appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator, or similar officer for it or for all or any part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator, or similar officer is appointed without
the application or consent of that entity and the appointment continues undischarged or unstayed
for 60 days; or institutes or consents to any bankruptcy, proposal in bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship,
liquidation, rehabilitation, or similar proceeding relating to it or to all or any part of its
property under the laws of any jurisdiction; or any similar proceeding is instituted without the
consent of that entity and continues undismissed or unstayed for 60 days; or any judgment, writ,
warrant of attachment or execution, or similar process is issued or levied against all or any part
of the property of any such entity in an amount in excess of 10% of the total assets of such
entity, and is not released, vacated, or fully bonded within sixty (60) days after its issue or
levy, or Borrower or any Domestic Subsidiary or any Significant Subsidiary shall take any corporate
action to authorize any of the actions set forth above in this subsection (g).



     Section 8.02. Remedies Upon Event of Default.



     (a) Upon the occurrence of any Event of Default (other than an Event of
Default described in Section 8.01(g)): (i) all commitments to make Loans may be
terminated by the Majority Banks without notice to or demand upon Borrower,
which are expressly waived by Borrower and (ii) the Majority Banks may declare
the unpaid principal of or unperformed balance of all Obligations due to the
Banks hereunder, all interest accrued and unpaid thereon, and all other amounts
payable under the Loan Documents to be forthwith due and payable, whereupon
the same shall become and be forthwith due and payable, without protest,
presentment, notice of dishonor, demand, or further notice of any kind, all of
which are expressly waived by Borrower.



     (b) Upon the occurrence of any Event of Default described in Section
8.01(g): (i) all commitments to make Loans shall terminate without notice to or
demand upon Borrower, which are expressly waived by Borrower; and (ii) the
unpaid principal of or unperformed balance of all Obligations due to the Banks
hereunder, and all interest accrued and unpaid on such obligations shall be
forthwith due and payable, without protest, presentment, notice of dishonor,
demand, or further notice of any kind, all of which are expressly waived by
Borrower.



39









 





     (c) Upon the occurrence of an Event of Default and acceleration of the
unpaid principal of or unperformed balance of all Obligations due to the Banks
hereunder, as provided in Sections 8.02(a) or 8.02(b), the Administrative Agent
and the Banks, or any of them, without notice to or demand upon Borrower,
which are expressly waived by Borrower, may proceed to protect, exercise, and
enforce their rights and remedies under the Loan Documents against Borrower
and such other rights and remedies as are provided by law or equity. The order
and manner in which the rights and remedies of the Administrative Agent and the
Banks under the Loan Documents and otherwise may be protected, exercised, or
enforced shall be determined by the Majority Banks.



     (d) All payments received by the Administrative Agent and the Banks,
or any of them, shall be applied first to the costs and expenses (including
attorneys fees and disbursements) of the Administrative Agent, acting as
Administrative Agent, and of the Banks and thereafter to the Banks
pro rata
according to the unpaid principal amount of the Loans held by each Bank.
Regardless of how any Bank may treat the payments for the purpose of its own
accounting, for the purpose of computing Borrower’s Obligations hereunder, the
payments shall be applied first, to the payment of accrued and unpaid fees
provided for hereunder and interest on all Obligations to and including the date of
such application, second, to the ratable payment of the unpaid principal of all
Loans, and third, to the payment of all other amounts then owing to the Banks
under the Loan Documents. No application of the payments will cure any Event
of Default or prevent acceleration, or continued acceleration, of amounts payable
under the Loan Documents or prevent the exercise, or continued exercise, of
rights or remedies of the Administrative Agent or Banks hereunder or under
applicable Laws.



ARTICLE 9



The Administrative Agent




     Section 9.01. Appointment and Authorization. Each Bank hereby irrevocably appoints and
authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Administrative Agent by the terms thereof
or are reasonably incidental, as determined by the Administrative Agent, thereto. This appointment
and authorization does not constitute appointment of the Administrative Agent as trustee for any
Bank and, except as specifically set forth herein to the contrary, the Administrative Agent shall
take such action and exercise such powers only in an administrative and ministerial capacity.
Without limiting the generality of the foregoing sentence, the use of the term “administrative
agent” in this Agreement with reference to the Administrative Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency doctrine



40









 







of any applicable law. Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship between independent
contracting parties.



     Section 9.02. Delegation of Duties. The Administrative Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of
any agent or attorney-in-fact that it selects with reasonable care.



     Section 9.03. Administrative Agent and Affiliates. JPMCB (and each successor Administrative
Agent) and its Affiliates have the same rights and powers under the Loan Documents as any other
Bank and may exercise the same as though JPMCB (or any successor Administrative Agent) were not the
Administrative Agent; and the term “Bank” or “Banks” includes JPMCB in its individual capacity.
JPMCB (and each successor Administrative Agent) and its respective Affiliates may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or other business with
Borrower and any Affiliate of Borrower, as if it were not the Administrative Agent and without any
duty to account therefor to the Banks. JPMCB (and each successor Administrative Agent) need not
account to any other Bank for any monies received by it for reimbursement of its costs and expenses
as Administrative Agent hereunder, or for any monies received by it in its capacity as a Bank
hereunder, except as otherwise provided herein.



     Section 9.04. Banks’ Credit Decisions. Each Bank agrees that it has, independently and without
reliance upon the Administrative Agent, any other Bank, or the directors, officers, agents, or
employees of the Administrative Agent or of any other Bank, and instead in reliance upon
information supplied to it by or on behalf of Borrower and upon such other information as it has
deemed appropriate, made its own independent credit analysis and decision to enter into this
Agreement. Each Bank also agrees that it shall, independently and without reliance upon the
Administrative Agent, any other Bank, or the directors, officers, agents, or employees of the
Administrative Agent or of any other Bank, continue to make its own independent credit analyses and
decisions in acting or not acting under the Loan Documents. Except for notices, reports and other
documents expressly herein required to be furnished to the Banks by the Administrative Agent, the
Administrative Agent shall not have any duty or responsibility to provide any Bank with any credit
or other information concerning the business, prospects, operations, property, financial and other
condition or credit worthiness of Borrower which may come into the possession of any of the
Agent-Related Persons.



41









 





     Section 9.05. Action by Administrative Agent.



     (a) The Administrative Agent may assume that no Event of Default has
occurred and is continuing, unless the Administrative Agent has actual knowledge
of the Event of Default, has received notice from Borrower stating the nature of
the Event of Default and stating that such notice is a “notice of default”, or has
received notice from a Bank stating the nature of the Event of Default and that
that Bank considers the Event of Default to have occurred and to be continuing.



     (b) The Administrative Agent has only those obligations under the Loan
Documents that are expressly set forth therein. Without limitation on the
foregoing, the Administrative Agent shall have no duty to inspect any property of
Borrower although the Administrative Agent may in its discretion periodically
inspect any property from time to time.



     (c) Except for any obligation expressly set forth in the Loan Documents
and as long as the Administrative Agent may assume that no Event of Default has
occurred and is continuing, the Administrative Agent may, but shall not be
required to, exercise its discretion to act or not act, except that the Administrative
Agent shall be required to act or not act upon the instructions of the Majority
Banks (or of all the Banks, to the extent required by Section 10.02) and those
instructions shall be binding upon the Administrative Agent and all the Banks,
provided that the Administrative Agent shall not be required to act or not act if to
do so would expose the Administrative Agent to significant personal liability or
would be contrary to any Loan Document or to applicable law.



     (d) If the Administrative Agent may not, pursuant to Section 9.05(a),
assume that no Event of Default has occurred and is continuing, the
Administrative Agent shall give notice thereof to the Banks and shall act or not
act upon the instructions of the Majority Banks (or all of the Banks, to the extent
required by Section 10.02), provided that the Administrative Agent shall not be
required to act or not act if to do so would expose the Administrative Agent to
significant liability or would be contrary to any Loan Document or to applicable
law. The Administrative Agent will notify the Banks of its receipt of any such
notice. The Administrative Agent shall take such action with respect to such
Default or Event of Default as may be requested by the Majority Banks in
accordance with Article 8; provided, however, that unless and until the
Administrative Agent has received any such request, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem advisable
or in the best interest of the Banks.



     (e) The Administrative Agent shall have no liability to any Bank for
acting, or not acting, as instructed by the Majority Banks (or all the Banks, if
required under Section 10.02), notwithstanding any other provision hereof.



42









 





     Section 9.06. Liability of Administrative Agent. None of the Agent-Related Persons shall be
liable for any action taken or not taken by them under or in connection with the Loan Documents,
except for their own gross negligence or willful misconduct. Without limitation on the foregoing,
the Agent-Related Persons:



     (a) may treat each Person whose name is recorded in the Register as a
Bank hereunder until the Administrative Agent receives notice of the assignment
or transfer of such Person’s interests hereunder in form satisfactory to the
Administrative Agent, signed by that Bank;



     (b) may consult with legal counsel, in-house legal counsel, independent
public accountants, in-house accountants and other professionals, or other experts
selected by it, of with legal counsel, independent public accountants, or other
experts for Borrower, and shall not be liable for any action taken or not taken by it
or them in good faith in accordance with the advice of such legal counsel,
independent public accountants, or experts;



     (c) will not be responsible to any Bank for any statement, warranty, or
representation made in any of the Loan Documents or in any notice, certificate,
report, request, or other statement (written or oral) in connection with any of the
Loan Documents;



     (d) except to the extent expressly set forth in the Loan Documents, will
have no duty to ascertain or inquire as to the performance or observance by
Borrower or any other Person of any of the terms, conditions, or covenants of any
of the Loan Documents or to inspect the property, books, or records of Borrower
or any of its Subsidiaries or other Person;



     (e) will not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, effectiveness, sufficiency, or value of any
Loan Document, any other instrument or writing furnished pursuant thereto or in
connection therewith;



     (f) will not incur any liability by acting or not acting in reliance upon
any Loan Document, notice, consent, certificate, statement, or other instrument or
writing believed by it or them to be genuine and signed or sent by the proper party
or parties; the Administrative Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Banks and such request and
any action taken or failure to act pursuant thereto shall be binding upon all of the
Banks (for purposes of determining compliance with the conditions specified in
Section 4.01, each Bank that has executed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document or
other matter either sent by the Administrative Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to or approved by
or acceptable or satisfactory to the Bank); and



43









 





     (g) will not incur any liability for any arithmetical error in computing any amount
payable to or receivable from any Bank hereunder, including without limitation payment of principal
and interest hereunder, payment of commitment fees, Loans, and other amounts; provided that
promptly upon discovery of such an error in computation, the Administrative Agent, the Banks and
(to the extent applicable) Borrower shall make such adjustments as are necessary to correct such
error and to restore the parties to the position that they would have occupied had the error not
occurred.



     Section 9.07. Indemnification. Whether or not the transactions contemplated hereby are
consummated, the Banks shall indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of Borrower and without limiting the obligation of Borrower to do so),
pro rata, from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including, without
limitation, attorney’s fees and disbursements and the allocated cost of in-house counsel) of any
kind or nature whatsoever which may at any time (including at any time following repayment of the
Loans and the termination, resignation or replacement of the Administrative Agent or replacement of
any Bank) be imposed on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such Person under or in
connection with any of the foregoing, including with respect to any investigation, litigation or
proceeding (including any bankruptcy or other insolvency proceeding or appellate proceeding)
related to or arising out of this Agreement or the Loans or the use of the proceeds thereof,
whether or not any Indemnified Person is a party thereto (all the foregoing, collectively, the
“Indemnified Liabilities”); provided, however, that no Bank shall be liable for the payment to any
Agent-Related Person of any portion of such Indemnified Liabilities resulting from such Person’s
gross negligence or willful misconduct. Without limitation of the foregoing, each Bank shall
reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including fees and expenses of any counsel (including in-house counsel)) incurred by the
Administrative Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any
other Loan Document, or any document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of Borrower. The
undertaking in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Administrative Agent.




44










 





     Section 9.08. Successor Administrative Agent. The Administrative Agent may, and at the
request of the Majority Banks shall, resign as Administrative Agent upon 30 days’ notice to the
Banks. If the Administrative Agent resigns under this Agreement, the Majority Banks shall appoint
from among the Banks a successor agent for the Banks. If no successor agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Banks and Borrower, a successor agent from among the Banks. Upon
the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed
to all the rights, powers and duties of the retiring Administrative Agent and the term
“Administrative Agent” shall mean such successor agent and the retiring Administrative Agent’s
appointment, powers and duties as Administrative Agent shall be terminated. After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this
Article 9 and Section 10.03 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement. If no successor agent has
accepted appointment as Administrative Agent by the date which is 30 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Banks shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Majority Banks appoint a successor
agent as provided for above.



     Section 9.09. Withholding Tax. Each Bank that is a “foreign corporation, partnership or
trust” within the meaning of the Code shall deliver to the Administrative Agent, prior to becoming
a Bank (including after accepting an assignment of an interest herein) and promptly upon becoming
aware that any form or other documentation provided pursuant to this Section 9.09 has become
invalid, two duly signed completed copies of either IRS Form W-8BEN or any successor form thereto
(relating to such Person and entitling it to an exemption from, or reduction of, withholding tax on
all payments to be made to such Person by Borrower pursuant to this Agreement) or IRS Form W-8ECI
or any successor form thereto (relating to all payments to be made to such Person by Borrower
pursuant to this Agreement) or such other evidence satisfactory to Borrower and the Administrative
Agent that such Person is entitled to an exemption from, or reduction of, U.S. withholding tax.
Thereafter and from time to time, each such Person shall (a) promptly submit to the Administrative
Agent such additional duly completed and signed copies of one of such forms (or such successor
forms as shall be adopted from time to time by the relevant United States taxing authorities) as
may then be available under then current United States laws and regulations to avoid, or such
evidence as is satisfactory to Borrower and the Administrative Agent of any available exemption
from or reduction of, United States withholding taxes in respect of all payments to be made to such
Person by Borrower pursuant to this Agreement, (b) promptly notify the Administrative



45









 







Agent of any change in circumstances which would modify or render invalid any claimed exemption or
reduction, and (c) take such steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Bank, and as may be reasonably necessary (including the re-designation
of its Lending Office) to avoid any requirement of applicable Laws that Borrower make any deduction
or withholding for taxes from amounts payable to such Person. If such Person fails to deliver the
above forms or other documentation, then the Administrative Agent may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax imposed by Sections
1441 and 1442 of the Code, without reduction, and, unless such failure shall result from a change
in law making it impossible for such Person to provide such forms or other documentation, the
Borrower shall not be required to pay any additional amounts as a result of such withholding. If
any Governmental Authority asserts that the Administrative Agent did not properly withhold any tax
or other amount from payments made in respect of such Person, such Person shall indemnify the
Administrative Agent therefor, including all penalties and interest, any taxes imposed by any
jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and
expenses (including the reasonable fees and out-of-pocket expenses of any legal counsel (including
the allocated cost of in-house counsel)) of the Administrative Agent. The obligation of the Banks
under this Section shall survive the payment of all Obligations and the resignation or replacement
of the Administrative Agent.



ARTICLE 10



Miscellaneous




     Section 10.01. Cumulative Remedies; No Waiver. The rights, powers, and remedies of the
Administrative Agent or any Bank provided in any Loan Document are cumulative and not exclusive of
any right, power, or remedy provided by law or equity. No failure or delay on the part of the
Administrative Agent or any Bank in exercising any right, power, or remedy may be, or may be deemed
to be, a waiver thereof; nor may any single or partial exercise of any right, power, or remedy
preclude any other or further exercise of any other right, power, or remedy. The terms and
conditions of Sections 4.01 and 4.02 are inserted for the sole benefit of the Banks and may be
waived by the Majority Banks in whole or in part with or without terms or conditions in respect of
any Loan, without prejudicing the Bank’s rights to assert them in whole or in part in respect of
any other Loans.



     Section 10.02. Amendments; Consents. No amendment, modification, supplement, termination, or
waiver of any provision of this Agreement, and no consent to any departure by Borrower therefrom,
may in any event be effective unless in writing signed by the Administrative Agent with the written
approval of



46









 







the Majority Banks, and then only in the specific instance and for the specific purpose given; and
in addition to the approval in writing of the Majority Banks, no amendment, modification,
supplement, termination, waiver, or consent may be effective:



     (a) to reduce the principal of, or the amount of principal, principal prepayments, or the rate
of interest payable on, any Obligation or increase the amount of any Commitment or decrease the
amount of any fee payable to any Bank without the approval in writing of each affected Bank;



     (b) to postpone any date fixed for any payment of principal of, prepayment of principal of, or
any installment of interest on, any Obligation or any installment of any fee or to extend the term
of any Commitment without the approval in writing of each affected Bank;



     (c) to amend or modify the provisions of the definitions in Section 1.01 of “Commitment” or
“Majority Banks”, of Sections 10.02, 10.09, 10.11 or of Article 8 without the approval of all the
Banks; or



     (d) to amend or modify any provision of this Agreement that expressly requires the consent or
approval of all the Banks without the approval of all the Banks;


provided, further, that no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Majority Banks, all the Banks or all the affected Banks, as
the case may be, affect the rights or duties of the Administrative Agent under this Agreement or
any other Loan Document. Any amendment, modification, supplement, termination, waiver or consent
pursuant to this Section 10.02 shall apply equally to and be binding upon, all of the Banks.




     Section 10.03. Costs, Expenses and Taxes. Borrower shall pay on demand the reasonable costs
and expenses of the Administrative Agent in connection with the negotiation, preparation, execution
and delivery, amendment, waiver, refinancing and restructuring of, and reorganization (including a
bankruptcy reorganization, if such payment is approved by the bankruptcy court) affecting, the Loan
Documents and the reasonable expenses of the Administrative Agent and the Banks in connection with
the enforcement of the Loan Documents, and any matter related thereto, including without limitation
filing fees, recording fees, title insurance fees, appraisal fees, search fees, and other
out-of-pocket expenses and the reasonable fees and out-of-pocket expenses of any legal counsel
(including the allocated cost of in-house counsel), independent public accountants, and other
outside experts retained by the Administrative Agent or the Banks. Borrower shall pay any and all
documentary and other taxes (other than income or gross receipts taxes generally applicable to
banks) and all costs,



47









 







expenses, fees, and charges payable or determined to be payable in connection with the filing or
recording of this Agreement, any other Loan Document, or any other instrument or writing to be
delivered hereunder or thereunder, or in connection with any transaction pursuant hereto or
thereto, and shall reimburse, hold harmless, and indemnify the Administrative Agent and the Banks
from and against any and all loss, liability, or legal or other expense with respect to or
resulting from any delay in paying or failure to pay any tax, cost, expense, fee, or charge or that
any of them may suffer or incur by reason of the failure of Borrower to perform any of the
Obligations. Any amount payable to the Administrative Agent or the Banks under this Section 10.03
shall bear interest from the date of demand for payment at the rate then in effect for Base Rate
Loans.



     Section 10.04. Banks’ Relationship. Nothing contained in this Agreement or any other Loan
Document and no action taken by the Banks and Borrower pursuant hereto or thereto may, or may be
deemed to, make any Bank and Borrower a partnership, an association, a joint venture, or other
entity. The sole relationship between the Banks and Borrower is that of lenders and borrower,
respectively. Each Bank’s obligation to make any Loan is several, and not joint or joint and
several, and is not conditioned upon the performance by all other Banks of their obligations to
make Loans. A default by any Bank will not increase the Commitment of any other Bank. Any Bank not
in default may, if it desires, assume in such proportion as the non-defaulting Banks may agree the
obligations of any Bank in default, but is not obligated to do so.



     Section 10.05. Survival of Representations and Warranties. All representations and warranties
of Borrower contained herein or in any other Loan Document (including, for this purpose, all
representations and warranties contained in any certificate or other writing required to be
delivered by or on behalf of Borrower pursuant to any Loan Document) will survive the execution and
delivery of this Agreement, and, in the absence of actual knowledge by the Banks of the untruth of
any representation or warranty, have been or will be relied upon by the Banks, notwithstanding any
investigation made by the Banks or on their behalf.



     Section 10.06. Notices.



     (a) General. Unless otherwise expressly provided in the Loan Documents, all notices,
requests, demands, directions and other communications provided for hereunder or under any other
Loan Document shall be in writing (including by facsimile transmission). All such written notices
shall be mailed, faxed or delivered to the applicable address, facsimile number or electronic mail
address, and all notices and other communications expressly permitted hereunder to be given by
telephone shall be made to the applicable telephone number, as follows:



48









 






     (i) if to Borrower or the Administrative Agent, to the address, facsimile
number, electronic mail address or telephone number specified for such Person on Schedule
10.06 or to such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the other parties; and




     (ii) if to any other Bank, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire or to such other
address, facsimile number, electronic mail address or telephone number as shall be
designated by such party in a notice to Borrower and the Administrative Agent.



     (b) Timing. All such notices and other communications shall be deemed to be given or made upon
the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered
by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if
delivered by mail, four Business Days after deposit in the United States mail, postage prepaid; (C)
if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if
delivered by electronic mail, when received; provided, however, that notices and other
communications to the Administrative Agent and the Banks pursuant to Article 2 shall not be
effective until actually received by such Person. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.



     (c) Effectiveness of Facsimile Documents and Signatures. Loan Documents maybe transmitted
and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject
to applicable law, have the same force and effect as manually-signed originals and shall be binding
on Borrower, the Administrative Agent and the Banks. The Administrative Agent may also require that
any such documents and signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.



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



     Section 10.07. Execution in Counterparts. This Agreement and any other Loan Document may be
executed in any number of counterparts and any party hereto or thereto may execute any counterpart, each of
which when executed and delivered will be deemed to be an original and all of which counterparts of this Agreement or any other Loan
Document, as the case may be, taken together will be deemed to be but one and the same instrument.
The execution of this Agreement or any other Loan Document by any party hereto or thereto will not
become effective until counterparts hereof or thereof, as the case may be, have been executed by
all the parties hereto or thereto.



49









 





     Section 10.08. Successors and Assigns.



     (a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Bank (and any attempted assignment or transfer by Borrower without such
consent shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy or
claim under or by reason of this Agreement.



     (b) Any Bank may at any time assign, with, so long as no Event of
Default has occurred and is continuing, the consent of Borrower (which consent
may be given or withheld in Borrower’s sole discretion) to one or more Eligible
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); provided that (i) except in the case of an assignment of the entire remaining
amount of the assigning Bank’s Commitment and the Loans at the time owing to
it or in the case of an assignment to a Bank or an Affiliate of a Bank or an
Approved Fund with respect to a Bank, the aggregate amount of the Commitment
(which for this purpose includes Loans outstanding thereunder) subject to each
such assignment, determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent or, if “Trade
Date” is specified in the Assignment and Assumption, as of the Trade Date, shall
not be less than $5,000,000, or that is in an integral multiple of $1,000,000 in
excess thereof, unless each of the Administrative Agent and, so long as no Event
of Default has occurred and is continuing, Borrower otherwise consents (each
such consent to be within the discretion of the consenting party), (ii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Bank’s rights and obligations under this Agreement with respect to the
Loans or the Commitment assigned, (iii) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500 (which fee shall not be
payable by the Borrower) and (iv) no consent of Borrower shall be required if the



50









 







proposed assignment is to another Bank, an Affiliate of a Bank or an Approved Fund with respect to
a Bank unless as a result of such assignment, the Borrower would incur an additional cost pursuant
to Section 3.06, but the assigning Bank shall give the Administrative Agent and Borrower written
notice thereof. Subject to acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent
of the interest assigned by such Assignment and Assumption, have the rights and obligations of a
Bank under this Agreement, and the assigning Bank 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 Bank’s rights and
obligations under this Agreement, such Bank shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 3.01, 3.03 and 3.09 with respect to facts and circumstances
occurring prior to the effective date of such assignment). Any assignment or transfer by a Bank of
rights or obligations under this Agreement that does not comply with this subsection shall be
treated for purposes of this Agreement as a sale by such Bank of a participation in such rights and
obligations in accordance with subsection (d) of this Section.



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



     (d) Any Bank may at any time, without the consent of, but with notice to, Borrower and the
Administrative Agent, sell participations to any Person (other than a natural person or Borrower or
any of Borrower’s Affiliates or Subsidiaries (each, a “Participant”)) in all or a portion of such
Bank’s rights and/or obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) such Bank’s obligations under this Agreement shall
remain unchanged, (ii) such Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) Borrower, the Administrative Agent and the other
Banks shall continue to deal solely and directly with such Bank in connection with such Bank’s
rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Bank
sells such a participation shall provide that



51









 







such Bank shall retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such agreement or
instrument may provide that such Bank will not, without the consent of the Participant, agree to
any amendment, waiver or other modification that would (x) postpone any date upon which any payment
of money is to be paid to such Participant or (y) reduce the principal, interest, fees or other
amounts payable to such Participant. Subject to subsection (e) of this Section, Borrower agrees
that each Participant shall be entitled to the benefits of Sections 3.01, 3.03 and 3.09 to the same
extent as if it were a Bank and had acquired its interest by assignment pursuant to subsection (b)
of this Section. To the extent permitted by law, each Participant also shall be entitled to the
benefits of, and be subject to, Section 10.09 as though it were a Bank.



     (e) A Participant shall not be entitled to receive any greater payment under Section 3.01,
3.03 and 3.09 than the applicable Bank 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 Borrower’s prior written consent. A Participant that would be a “foreign corporation,
partnership or trust” as contemplated by Section 9.09 (a “Foreign Bank”) if it were a Bank shall
not be entitled to the benefits of Section 3.01 unless Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of Borrower, to comply with
Section 9.09 as though it were a Bank.



     (f) Any Bank 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 Bank, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall
release such Bank from any of its obligations hereunder or substitute any such pledgee or assignee
for such Bank as a party hereto.



     (g) As used herein, the following terms have the following meanings:




     “Eligible Assignee” means, (a) a Bank; (b) an Affiliate of a Bank; (c) an Approved
Fund; and (d) any other Person (other than a natural person) approved by (i) the
Administrative Agent, and (ii) unless (A) such Person is taking delivery of an assignment
in connection with physical settlement of a credit derivative transaction or (B) an Event
of Default has occurred and is continuing, Borrower (each such consent to be within the
discretion of the consenting party); provided, that notwithstanding the foregoing,
“Eligible Assignee” shall not include Borrower or any of Borrower’s Affiliates or
Subsidiaries.




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



52









 






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



     Section 10.09. Right of Setoff; Sharing of Excess Payment.



     (a) Borrower acknowledges that each Bank and each of its Affiliates have a contractual right
of setoff of amounts credited to any deposit account maintained by Borrower with that Bank or its
Affiliates against the Obligations owed to that Bank or its Affiliates. Upon the occurrence of an
Event of Default which is then continuing, Borrower consents to the exercise by each Bank and its
Affiliates of its right of setoff, as aforesaid, in accordance with applicable Laws.



     (b) Each Bank severally agrees that if that Bank or any of its Affiliates shall, through the
exercise of a right of setoff, banker’s lien or counterclaim against Borrower or by virtue of a
voluntary or involuntary payment received or applied, receive payment or reduction of a proportion
of the aggregate amount of principal and interest then due hereunder, or amounts due to that Bank
or its Affiliates in respect of fees hereunder (collectively, the “Aggregate Amounts Due” to such
Bank and such Affiliates), which is greater than the proportion received by any other Bank in
respect to the Aggregate Amounts Due to such other Bank, then the Bank and its Affiliates receiving
such greater proportionate payment shall purchase participations (which it shall be deemed to have
purchased from each seller simultaneously upon the receipt by such seller of its portion of such
payment) in the Aggregate Amounts Due to the other Banks so that all such recoveries of Aggregate
Amounts Due shall be shared by the Banks in proportion to the Aggregate Amounts Due them. If all or
a portion of any such excess payment is thereafter recovered from any Bank which received the same,
the purchase provided for herein shall be rescinded to the extent of such recovery, without
interest.



     Section 10.10. Indemnification by Borrower. Whether or not the transactions contemplated
hereby are consummated, Borrower agrees to indemnify, save and hold harmless each Agent-Related
Person, each Bank and their respective Affiliates, directors, officers, employees, counsel, agents
and attorneys-in-fact (collectively the “Indemnitees”) from and against: (a) any and all claims,
demands, actions or causes of action that are asserted against any Indemnitee by any Person (other
than the Administrative Agent or any Bank) relating directly or indirectly to a claim, demand,
action or cause of action that such Person asserts or may assert against Borrower, any Affiliate of
Borrower or any of their respective officers or directors which arises out of or in connection with
the Loan Documents, the use of Loan proceeds or the transactions



53









 







contemplated thereby; (b) any and all claims, demands, actions or causes of action that may at any
time (including at any time following repayment of the Obligations and the resignation or removal
of the Administrative Agent or the replacement of any Bank) be asserted or imposed against any
Indemnitee, arising out of or relating to, the Loan Documents, any predecessor loan documents, the
Commitments, the use or contemplated use of the proceeds of any Loan, or the relationship of
Borrower, the Administrative Agent and the Banks under this Agreement or any other Loan Document;
(c) any administrative or investigative proceeding by any Governmental Agency arising out of or
related to a claim, demand, action or cause of action described in subsection (a) or (b) above;
and (d) any and all liabilities (including liabilities under indemnities), losses, costs or
expenses (including, without limitation, attorney’s fees and disbursements and the allocated cost
of in-house counsel) that any Indemnitee suffers or incurs as a result of the assertion of any
foregoing claim, demand, action, cause of action or proceeding, or as a result of the preparation
of any defense in connection with any foregoing claim, demand, action, cause of action or
proceeding, and whether or not an Indemnitee is a party to such claim, demand, action, cause of
action or proceeding (all the foregoing, collectively, the “Indemnified Liabilities”); provided
that no Indemnitee shall be entitled to indemnification for any claim caused by its own gross
negligence or willful misconduct or for any loss asserted against it by another Indemnitee. The
agreements in this Section shall survive the termination of the Commitments and repayment of all
the other Obligations.



     Section 10.11. Nonliability of Banks. Neither the Administrative Agent nor any Bank undertakes
or assumes any responsibility or duty to Borrower to review, inspect, supervise, pass judgment
upon, or inform Borrower of any matter in connection with any phase of Borrower’s business,
operations, or condition, financial or otherwise. Borrower shall rely entirely upon its own
judgment with respect to such matters, and any review, inspection, supervision, exercise of
judgment, or information supplied to Borrower by the Administrative Agent or any Bank in connection
with any such matter is for the protection of the Administrative Agent and the Banks, and neither
Borrower nor any third party is entitled to rely thereon.



     Section 10.12. Confidentiality. Each Bank agrees to hold any confidential information which it
may receive from Borrower pursuant to this Agreement in confidence, except for disclosure (a) to
its Affiliates, legal counsel, accountants, and other professional advisors to the Bank provided
that such advisors and Affiliates are obliged to hold such information in confidence, (b)
regulatory officials having jurisdiction over the Bank or its Affiliates, (c) as required by law or
legal process or in connection with any legal proceeding to which the Bank is a party provided that
Borrower is notified prior to or concurrently with any such disclosure, and (d) to the
Administrative Agent or another Bank. This Agreement, and other confidential information as
approved by Borrower at the time, may be disclosed, subject to an agreement containing provisions
substantially the same as those of this Section 10.12, to any Participants, Eligible
Assignees, potential Participants or potential Eligible Assignees.



54









 





     Section 10.13. Investment Intent. Each Bank is making the Loans provided for herein for its
own account and not with a view to the distribution thereof, subject, nevertheless, to any
requirement that its property shall at all times be within its control, and subject further to the
Bank’s right (reserved hereby) to sell participations in the Loans pursuant to this Agreement.



     Section 10.14. Further Assurances. Borrower shall, at its expense and without expense to the
Administrative Agent or any Bank, do, execute, and deliver such further acts and documents as the
Administrative Agent from time to time reasonably requires for the assuring and confirming unto
them the rights hereby created or intended now or hereafter so to be, or for carrying out the
intention or facilitating the performance of the terms of any Loan Document.



     Section 10.15. Integration. This Agreement, together with the other Loan Documents, comprises
the complete and integrated agreement of the parties on the subject matter hereof and supersedes
all prior agreements, written or oral, on the subject matter hereof; provided, however, that the
foregoing is subject to Section 5.18.



     Section 10.16. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. The Loan
Documents shall be governed by, and construed and enforced in accordance with, the laws of the
State of New York. The Loan Documents were drafted with the joint participation of Borrower and the
Banks and shall be construed neither against nor in favor of either, but rather in accordance with
the fair meaning thereof. All judicial proceedings brought against Borrower with respect to this
Agreement may be brought in any state or federal court of competent jurisdiction in the State of
New York, and by execution and delivery of this Agreement, Borrower accepts for itself and in
connection with its properties, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Agreement. Borrower irrevocably waives any right it may have to assert the doctrine of
forum non conveniens or to object to venue to the extent any proceeding is brought in accordance
with this Section. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT
OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.



     Section 10.17. Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.



55









 





     Section 10.18. Headings. Article and section headings in this Agreement and the other Loan
Documents are included for convenience of reference only and are not part of this Agreement or the
other Loan Documents for any other purpose.



     Section 10.19. Time of the Essence. Time is of the essence of the Loan Documents.



     Section 10.20. USA PATRIOT Act Notice. Each Bank (whether a party hereto on the date hereof
or hereafter) and the Administrative Agent (for itself and not on behalf of any Bank) hereby
notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
No. 107-56 (signed into law October 26, 2001)), it is 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 Bank or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the USA PATRIOT Act and to provide notice
of these requirements, and this notice shall satisfy such notice requirements of the USA PATRIOT
Act.



56









 






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



	 	 	 	 	 	 	 
	 	 	AVERY DENNISON CORPORATION, as 
     Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel R. O’Bryant
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Daniel R. O’Bryant	 	 
	 

	 	 	 	Title: Executive Vice President, Finance	 	 
	 

	 	 	 	and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Karyn E. Rodriguez	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Karyn E. Rodriguez	 	 
	 

	 	 	 	Title: Vice President and Treasurer	 	 






 









 





	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A. as	 	 
	 	 	     Administrative Agent and Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Thomas T. Hou
 

Name: Thomas T. Hou
	 	 
	 

	 	 	 	Title: Executive Director	 	 






 









 





	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Robert W. Troutman 

Name: Robert W. Troutman
	 	 
	 

	 	 	 	Title: Managing Director	 	 






 









 





	 	 	 	 	 	 	 
	 	 	CITICORP NORTH AMERICA, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Walter L. Larsen
 

Name: Walter L. Larsen
	 	 
	 

	 	 	 	Title: Mg. Director	 	 






 









 





	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ James Travagline
 

Name: James Travagline
	 	 
	 

	 	 	 	Title: Vice President	 	 






 








 







	 	 	 	 	 	 	 
	 	 	BARCLAYS BANK PLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Russell C. Johnson
 

Name: Russell C. Johnson
	 	 
	 

	 	 	 	Title: Associate Director	 	 







 










 





Schedule 2.01




COMMITMENT SCHEDULE




	 	 	 	 	 
	Lender	 	Commitment	 
	JPMorgan Chase Bank, N.A.
	 	$	540,000,000	 
	Bank of America, N.A.
	 	$	236,250,000	 
	Citicorp North America, Inc.
	 	$	236,250,000	 
	Barclays Bank PLC
	 	$	168,750,000	 
	Wachovia Bank, N.A.
	 	$	168,750,000	 
	 
	 	 	 
	Total
	 	$	1,350,000,000	 
	 
	 	 	 





 









 





Schedule 5.04




	 	 	 	 	 
	 	 	 	 	JURISDICTION
	 	 	2006 SUBSIDIARY	 	IN WHICH ORGANIZED
	1.

	 	A.V. CHEMIE GMBH
	 	SWITZERLAND
	2.

	 	ADC PHILIPPINES, INC.
	 	PHILIPPINES
	3.

	 	ADESPAN S.R.L.
	 	ITALY
	4.

	 	ADESPAN U.K. LIMITED
	 	UNITED KINGDOM
	5.

	 	AUSTRACOTE PTY LTD.
	 	AUSTRALIA
	6.

	 	AVERY (CHINA) COMPANY LIMITED
	 	CHINA
	7.

	 	AVERY CORP.
	 	U.S.A.
	8.

	 	AVERY de MEXICO S.A. de C.V.
	 	MEXICO
	9.

	 	Avery Dennison Holdings (Malta) Limited
	 	Malta
	10.

	 	Avery Dennison (Asia) Holdings Limited
	 	MAURITIUS
	11.

	 	AVERY DENNISON (BANGLADESH) LTD.
	 	BANGLADESH
	12.

	 	AVERY DENNISON (FIJI) LIMITED
	 	FIJI
	13.

	 	AVERY DENNISON (FUZHOU) CONVERTED PRODUCTS LIMITED
	 	CHINA
	14.

	 	AVERY DENNISON (GUANGZHOU) CO. LTD.
	 	CHINA
	15.

	 	AVERY DENNISON (GUANGZHOU) CONVERTED PRODUCTS LIMITED
	 	CHINA
	16.

	 	AVERY DENNISON (HONG KONG) LIMITED
	 	HONG KONG
	17.

	 	AVERY DENNISON (INDIA) PRIVATE LIMITED
	 	INDIA
	18.

	 	AVERY DENNISON (IRELAND) LIMITED
	 	IRELAND
	19.

	 	AVERY DENNISON (KUNSHAN) CO., LIMITED
	 	CHINA
	20.

	 	AVERY DENNISON (MALAYSIA) SDN. BHD.
	 	MALAYSIA
	21.

	 	Avery Dennison (Qingdao) Converted Products Limited
	 	CHINA
	22.

	 	AVERY DENNISON (SUZHOU) CO. LIMITED
	 	CHINA
	23.

	 	AVERY DENNISON (THAILAND) LTD.
	 	THAILAND
	24.

	 	AVERY DENNISON (VIETNAM) LIMITED
	 	VIETNAM
	25.

	 	AVERY DENNISON AUSTRALIA GROUP HOLDINGS PTY LIMITED
	 	AUSTRALIA
	26.

	 	AVERY DENNISON AUSTRALIA INTERNATIONAL HOLDINGS PTY LTD.
	 	AUSTRALIA
	27.

	 	AVERY DENNISON AUSTRALIA PTY LTD.
	 	AUSTRALIA
	28.

	 	AVERY DENNISON BELGIE BVBA
	 	BELGIUM
	29.

	 	AVERY DENNISON BV
	 	NETHERLANDS
	30.

	 	AVERYDENNISON C.A.
	 	VENEZUELA
	31.

	 	AVERY DENNISON CANADA INC.
	 	CANADA
	32.

	 	AVERY DENNISON CHILE S.A.
	 	CHILE
	33.

	 	AVERY DENNISON COLOMBIA S. A.
	 	Colombia
	34.

	 	AVERY DENNISON CONVERTED PRODUCTS de MEXICO, S.A. de C.V.
	 	MEXICO
	35.

	 	AVERY DENNISON CONVERTED PRODUCTS EL SALVADOR S. A. de C. V.
	 	EL SALVADOR
	36.

	 	AVERY DENNISON COORDINATION CENTER BVBA
	 	BELGIUM
















 





	 	 	 	 	 
	 	 	 	 	JURISDICTION
	 	 	2006 SUBSIDIARY	 	IN WHICH ORGANIZED
	37.

	 	AVERY DENNISON de ARGENTINA S.A.
	 	ARGENTINA
	38.

	 	AVERY DENNISON DEUTSCHLAND GmbH
	 	GERMANY
	39.

	 	AVERY DENNISON do BRASIL LTDA.
	 	BRAZIL
	40.

	 	AVERY DENNISON ETIKET TICARET LIMITED SIRKETI
	 	TURKEY
	41.

	 	AVERY DENNISON EUROPE HOLDING (DEUTSCHLAND) GmbH & Co KG
	 	GERMANY
	42.

	 	AVERY DENNISON FINANCE BELGIUM BVBA
	 	BELGIUM
	43.

	 	AVERY DENNISON FINANCE FRANCE S. A. S.
	 	FRANCE
	44.

	 	AVERY DENNISON FINANCE GERMANY GmbH
	 	GERMANY
	45.

	 	Avery Dennison Finance Luxembourg II Sarl
	 	LUXEMBOURG
	46.

	 	AVERY DENNISON FINANCE LUXEMBOURG S. A. R. L.
	 	LUXEMBOURG
	47.

	 	AVERY DENNISON FOUNDATION
	 	U.S.A.
	48.

	 	AVERY DENNISON FRANCE S.A.S.
	 	FRANCE
	49.

	 	AVERY DENNISON G HOLDINGS I COMPANY
	 	U.S.A.
	50.

	 	AVERY DENNISON G HOLDINGS III COMPANY
	 	U.S.A.
	51.

	 	AVERY DENNISON G INVESTMENTS III LIMITED
	 	GIBRALTAR
	52.

	 	AVERY DENNISON G INVESTMENTS V LIMITED
	 	GIBRALTAR
	53.

	 	AVERY DENNISON GROUP DANMARK ApS
	 	DENMARK
	54.

	 	Avery Dennison Group Singapore (Pte) Limited
	 	SINGAPORE
	55.

	 	AVERY DENNISON HOLDING & FINANCE THE NETHERLANDS BV
	 	NETHERLANDS
	56.

	 	AVERY DENNISON HOLDING AG
	 	SWITZERLAND
	57.

	 	AVERY DENNISON HOLDING GmbH
	 	GERMANY
	58.

	 	AVERY DENNISON HOLDING LUXEMBOURG S. A. R. L.
	 	LUXEMBOURG
	59.

	 	AVERY DENNISON HOLDINGS LIMITED
	 	AUSTRALIA
	60.

	 	AVERY DENNISON HOLDINGS NEW ZEALAND LIMITED
	 	NEW ZEALAND
	61.

	 	AVERY DENNISON HONG KONG BV
	 	NETHERLANDS
	62.

	 	AVERY DENNISON HUNGARY LIMITED
	 	HUNGARY
	63.

	 	AVERY DENNISON IBERICA, S.A.
	 	SPAIN
	64.

	 	AVERY DENNISON INVESTMENTS LUXEMBOURG S.a.r.l.
	 	LUXEMBOURG
	65.

	 	AVERY DENNISON INVESTMENTS THE NETHERLANDS BV
	 	NETHERLANDS
	66.

	 	AVERY DENNISON ITALIA S.r.l.
	 	ITALY
	67.

	 	AVERY DENNISON KOREA LIMITED
	 	KOREA
	68.

	 	AVERY DENNISON LUXEMBOURG S.A.R.L.
	 	LUXEMBOURG
	69.

	 	AVERY DENNISON MANAGEMENT GmbH
	 	GERMANY
	70.

	 	AVERY DENNISON MANAGEMENT KGaA
	 	LUXEMBOURG
	71.

	 	AVERY DENNISON MANAGEMENT LUXEMBOURG S.A.R.L.
	 	LUXEMBOURG
	72.

	 	AVERY DENNISON MATERIALS FRANCE S.A.R.L.
	 	FRANCE
















 





	 	 	 	 	 
	 	 	 	 	JURISDICTION
	 	 	2006 SUBSIDIARY 	 	IN WHICH ORGANIZED
	73.

	 	AVERY DENNISON MATERIALS GmbH
	 	GERMANY
	74.

	 	AVERY DENNISON MATERIALS IRELAND LIMITED
	 	IRELAND
	75.

	 	AVERY DENNISON MATERIALS NEDERLAND BV
	 	NETHERLANDS
	76.

	 	AVERY DENNISON MATERIALS NEW ZEALAND LIMITED
	 	NEW ZEALAND
	77.

	 	AVERY DENNISON MATERIALS PTY LIMITED
	 	AUSTRALIA
	78.

	 	AVERY DENNISON MATERIALS SDN BHD
	 	MALAYSIA
	79.

	 	AVERY DENNISON MATERIALS U.K. LIMITED
	 	UNITED KINGDOM
	80.

	 	AVERY DENNISON MOROCCO SARL
	 	MOROCCO
	81.

	 	AVERY DENNISON NETHERLANDS INVESTMENT II B. V.
	 	NETHERLANDS
	82.

	 	AVERY DENNISON NETHERLANDS INVESTMENT III BV
	 	NETHERLANDS
	83.

	 	AVERY DENNISON NETHERLANDS INVESTMENT VI BV
	 	NETHERLANDS
	84.

	 	AVERY DENNISON NORDIC ApS
	 	DENMARK
	85.

	 	AVERY DENNISON NORGE A/S
	 	NORWAY
	86.

	 	AVERY DENNISON OFFICE ACCESSORIES U.K. LIMITED
	 	UNITED KINGDOM
	87.

	 	AVERY DENNISON OFFICE PRODUCTS (NZ) LIMITED
	 	NEW ZEALAND
	88.

	 	AVERY DENNISON OFFICE PRODUCTS (PTY.) LTD.
	 	SOUTH AFRICA
	89.

	 	AVERY DENNISON OFFICE PRODUCTS COMPANY
	 	U.S.A.
	90.

	 	AVERY DENNISON OFFICE PRODUCTS de MEXICO, S.A. de C.V.
	 	MEXICO
	91.

	 	AVERY DENNISON OFFICE PRODUCTS EUROPE GmbH
	 	SWITZERLAND
	92.

	 	AVERY DENNISON OFFICE PRODUCTS FRANCE S. A. S.
	 	FRANCE
	93.

	 	AVERY DENNISON OFFICE PRODUCTS ITALIA S.r.l.
	 	ITALY
	94.

	 	AVERY DENNISON OFFICE PRODUCTS MANUFACTURING U.K. LTD.
	 	UNITED KINGDOM
	95.

	 	AVERY DENNISON OFFICE PRODUCTS PTY LIMITED
	 	AUSTRALIA
	96.

	 	AVERY DENNISON OFFICE PRODUCTS U.K. LTD.
	 	UNITED KINGDOM
	97.

	 	AVERY DENNISON OSTERREICH GMBH
	 	Austria
	98.

	 	AVERY DENNISON OVERSEAS CORPORATION
	 	U.S.A.
	99.

	 	AVERY DENNSON OVERSEAS CORPORATION (JAPAN BRANCH)
	 	JAPAN
	100.

	 	AVERY DENNISON PENSION TRUSTEE LIMITED
	 	UNITED KINGDOM
	101.

	 	AVERY DENNISON PERU S.R.L.
	 	PERU
	102.

	 	AVERY DENNISON POLSKA SP. Z O.O.
	 	POLAND
	103.

	 	AVERY DENNISON PRAHA SPOL. R. O.
	 	CZECH REPUBLIC
	104.

	 	AVERY DENNISON REFLECTIVES DO BRAZIL LTDA.
	 	BRAZIL
	105.

	 	AVERY DENNISON RETAIL INFORMATION SERVICES de MEXICO, S. A. de C.V.
	 	MEXICO

	106.

	 	AVERY DENNISON RETAIL INFORMATION SERVICES DOMINICAN REPUBLIC, S.A.
	 	DOMINICAN REPUBLIC
	107.

	 	AVERY DENNISON RETAIL INFORMATION SERVICES GUATEMALA, S. A. 	 	GUATEMALA
















 





	 	 	 	 	 
	 	 	 	 	JURISDICTION
	 	 	2006 SUBSIDIARY	 	IN WHICH ORGANIZED
	108.

	 	Avery Dennison RFID Company
	 	U.S.A.
	109.

	 	AVERY DENNISON RINKE GmbH
	 	GERMANY
	110.

	 	AVERY DENNISON RIS KOREA LTD.
	 	KOREA
	111.

	 	AVERY DENNISON RIS LANKA (PRIVATE) LIMITED
	 	SRI LANKA
	112.

	 	AVERY DENNISON SCANDINAVIA ApS
	 	DENMARK
	113.

	 	AVERY DENNISON SCHWEIZ AG
	 	SWITZERLAND
	114.

	 	AVERY DENNISON SECURITY PRINTING EUROPE ApS
	 	DENMARK
	115.

	 	AVERY DENNISON SHARED SERVICES, INC.
	 	U.S.A.
	116.

	 	AVERY DENNISON SINGAPORE (PTE) LTD
	 	SINGAPORE
	117.

	 	AVERY DENNISON SOUTH AFRICA (PROPRIETARY) LIMITED
	 	SOUTH AFRICA
	118.

	 	AVERY DENNISDN SUOMI OY
	 	FINLAND
	119.

	 	AVERY DENNISON SVERIGE AB
	 	SWEDEN
	120.

	 	AVERY DENNISON SYSTEMES d’ETIQUETAGE FRANCE S.A.S.
	 	FRANCE
	121.

	 	AVERY DENNISON TAIWAN LIMITED
	 	TAIWAN
	122.

	 	AVERY DENNISON U.K. LIMITED
	 	UNITED KINGDOM
	123.

	 	AVERY DENNISON VERMOGENSVERWALTUNGS GmbH & Co K.G.
	 	GERMANY
	124.

	 	AVERY DENNISON ZWECKFORM AUSTRIA GmbH
	 	AUSTRIA
	125.

	 	AVERY DENNISON ZWECKFORM OFFICE PRODUCTS EUROPE GmbH
	 	GERMANY
	126.

	 	AVERY DENNISON ZWECKFORM OFFICE PRODUCTS MANUFACTURING GmbH
	 	GERMANY
	127.

	 	AVERY DENNISON ZWECKFORM UNTERSTUTZUNGSKASSE GmbH
	 	GERMANY
	128.

	 	AVERY DENNISON, S.A. de C.V.
	 	MEXICO
	129.

	 	AVERY DENNISON-MAXELL K. K.
	 	JAPAN
	130.

	 	AVERY GRAPHIC SYSTEMS, INC.
	 	U.S.A.
	131.

	 	AVERY GUIDEX LIMITED
	 	UNITED KINGDOM
	132.

	 	AVERY HOLDING LIMITED
	 	UNITED KINGDOM
	133.

	 	AVERY HOLDING S.A.S.
	 	FRANCE
	134.

	 	AVERY OFFICE PRODUCTS PUERTO RICO LLC
	 	PUERTO RICO
	135.

	 	AVERY PACIFIC LLC
	 	U.S.A.
	136.

	 	AVERY PROPERTIES PTY. LIMITED
	 	AUSTRALIA
	137.

	 	AVERY, INC.
	 	U.S.A.
	138.

	 	DENNISON COMERCIO, IMPORTACAS E EXPORTACAO LTDA.
	 	BRAZIL
	139.

	 	DENNISON DEVELOPMENT ASSOCIATES
	 	U.S.A.
	140.

	 	DENNISON INTERNATIONAL COMPANY
	 	U.S.A.
	141.

	 	DENNISON MANUFACTURING COMPANY
	 	U.S.A.
	142.

	 	INDUSTRIAL DE MARCAS LTDA
	 	COLOMBIA
	143.

	 	JAC (U.K.) LIMITED
	 	UNITED KINGDOM
















 





	 	 	 	 	 
	 	 	 	 	JURISDICTION
	 	 	2006 SUBSIDIARY	 	IN WHICH ORGANIZED
	144.

	 	JAC ASIA PACIFIC PTY LTD.
	 	AUSTRALIA
	145.

	 	JAC ASIA PACIFIC SDN BHD
	 	Malaysia
	146.

	 	JAC AUSTRALIA PTY LTD.
	 	Australia
	147.

	 	JAC CARIBE C.s.Z.
	 	DOMINICAN REPUBLIC
	148.

	 	JAC DO BRASIL LTDA.
	 	Brazil
	149.

	 	JAC NEW ZEALAND LIMITED
	 	New Zealand
	150.

	 	JACKSTADT FRANCE S.N.C.
	 	France
	151.

	 	JACKSTADT FRANCE SARL
	 	France
	152.

	 	JACKSTADT GmbH
	 	Germany
	153.

	 	JACKSTADT SOUTH AFRICA (PTY) LTD.
	 	South Africa
	154.

	 	JACKSTADT VERMOGENSVERWALTUNGS GmbH
	 	GERMANY
	155.

	 	L&E AMERICAS SERVICIOS, S. A. de C.V.
	 	MEXICO
	156.

	 	L&E PACKAGING FAR EAST LIMITED
	 	HONG KONG
	157.

	 	MODERN MARK INTERNATIONAL LIMITED
	 	HONG KONG
	158.

	 	MONARCH INDUSTRIES, INC.
	 	U.S.A.
	159.

	 	PT AVERYDENNISON INDONESIA
	 	INDONESIA
	160.

	 	PT AVERY DENNISON PACKAGING INDONESIA
	 	INDONESIA
	161.

	 	RF IDENTICS, INC.
	 	U.S.A.
	162.

	 	RINKE DIS TISCARET LTD (SIRKETI)
	 	Turkey
	163.

	 	RINKE ETIKET SERVIS SANAYI VE TICARET LTD SIRKETI
	 	Turkey
	164.

	 	RINKE FAR EAST LTD
	 	Hong Kong
	165.

	 	RIPRO FAR EAST LTD
	 	Hong Kong
	166.

	 	RVL AMERICAS, S de R.L. de C.V.
	 	MEXICO
	167.

	 	RVL CENTRAL AMERICA, S. A.
	 	GUATEMALA
	168.

	 	RVL PACKAGING FAR EAST LIMITED
	 	HONG KONG
	169.

	 	RVL PACKAGING INDIA PRIVATE LIMITED
	 	INDIA
	170.

	 	RVL PACKAGING MIDDLE EAST F.Z.C.
	 	UNITED ARAB EMIRATES
	171.

	 	RVL PACKAGING SINGAPORE PTE LTD.
	 	SINGAPORE
	172.

	 	RVL PACKAGING TAIWAN LTD.
	 	TAIWAN
	173.

	 	RVL PACKAGING, INC.
	 	U.S.A.
	174.

	 	RVL PHILIPPINES, INC.
	 	PHILIPPINES
	175.

	 	RVL PRINTED LABEL FAR EAST LIMITED
	 	HONG KONG
	176.

	 	RVL PRINTED LABELS, LLC
	 	U.S.A.
	177.

	 	RVL SERVICE, S. DE R. L. de C. V.
	 	MEXICO
	178.

	 	SECURITY PRINTING DIVISION, INC.
	 	U.S.A.
	179.

	 	STIMSONITE AUSTRALIA PTY LIMITED
	 	AUSTRALIA
















 





	 	 	 	 	 
	 	 	 	 	JURISDICTION
	 	 	2006 SUBSIDIARY	 	IN WHICH ORGANIZED
	180.

	 	TIADECO PARTICIPACOES, LTDA.
	 	BRAZIL
	181.

	 	UNIVERSAL PACKAGING & DESIGN, LTD.
	 	HONG KONG
	182.

	 	Worldwide Risk Insurance, Inc.
	 	U.S.A.


















 





Schedule 5.09




LITIGATION



The Company has been designated by the U.S. Environmental Protection Agency (“EPA”) and/or other
responsible state agencies as a potentially responsible party (“PRP”) at fourteen waste disposal or
waste recycling sites, which are the subject of separate investigations or proceedings concerning
alleged soil and/or ground water contamination and for which no settlement of the Company’s
liability has been agreed. The Company is participating with other PRPs at such sites, and
anticipates that its share of cleanup costs will be determined pursuant to remedial agreements
entered into in the normal course of negotiations with the EPA or other governmental authorities.



The Company has accrued liabilities for these and certain other sites, including sites in which
governmental agencies have designated the Company as a PRP, where it is probable that a loss will
be incurred and the cost or amount of loss can be reasonably estimated. However, because of the
uncertainties associated with environmental assessment and remediation activities, future expense
to remediate the currently identified sites and any sites which could be identified in the future
for cleanup could be higher than the liability currently accrued.



During the third quarter of 2006, the Company recognized additional liability of $13 million for
estimated environmental remediation costs for a former operating facility, for which $2 million had
been accrued in the second quarter of 2006. The amount accrued represents the lower end of the
current estimated range of $15 million to $17 million for costs expected to be incurred. Management
considered additional information provided by outside consultants in revising its previous
estimates of expected costs. This estimate could change depending on various factors such as
modification of currently planned remedial actions, changes in the site conditions, a change in the
estimated time to complete remediation, changes in laws and regulations affecting remediation
requirements and other factors.



Other amounts currently accrued are not significant to the consolidated financial position of the
Company and, based upon current information, management believes it is unlikely that the final
resolution of these matters will significantly impact the Company’s consolidated financial
position, results of operations or cash flows.



On October 19, 2006, the U.S. Department of Justice notified the Company that the U.S. Department
of Justice had decided to close its criminal investigation (initiated in April 2003) into
competitive practices in the label stock industry without further action, as described below.



On November 15, 2006, the Company announced that it had been notified that the European
Commission (“EC”) had closed its investigation (initiated in May 2004) into the Company’s
competitive activities in the label stock industry with no action, as described below.



On April 14, 2003, the Company announced that it had been notified that the U.S. Department of
Justice (“DOJ”) had initiated a criminal investigation into competitive practices in the label
stock industry. The Company cooperated with the now closed investigation.



On April 15, 2003, the U.S. Department of Justice filed a complaint in the U.S. District Court for
the Northern District of Illinois (“DOJ Merger Complaint”) seeking to enjoin the proposed merger of
UPM-Kymmene (“UPM”) and the Morgan Adhesives (“MACtac”) division of Bemis







Schedule 5.09-1









 




Co., Inc. (“Bemis”). The DOJ Merger Complaint included references not only to the parties to the
merger, but also to an unnamed “Leading Producer” of North American label stock, which is the
Company. The DOJ Merger Complaint asserted that “UPM and the Leading Producer have already
attempted to limit competition between themselves, as reflected in written and oral communications
to each other through high level executives regarding explicit anticompetitive understandings,
although the extent to which these efforts have succeeded is not entirely clear to the United
States at the present time.” On July 25, 2003, the United States District Court for the Northern
District of Illinois entered an order enjoining the proposed merger. UPM and Bemis thereafter
agreed to terminate the merger agreement.



On April 24, 2003, Sentry Business Products, Inc. filed a purported class action in the United
States District Court for the Northern District of Illinois against the Company, UPM, Bemis and
certain of their subsidiaries seeking treble damages and other relief for alleged unlawful
competitive practices, essentially repeating the underlying allegations of the DOJ Merger
Complaint. Ten similar complaints were filed in various federal district courts. In November 2003,
the cases were transferred to the United States District Court for the Middle District of
Pennsylvania and consolidated for pretrial purposes. Plaintiffs filed a consolidated complaint on
February 16, 2004, which the Company answered on March 31, 2004. On April 14, 2004, the court
separated the proceedings as to class certification and merits discovery, and limited the initial
phase of discovery to the issue of the appropriateness of class certification. On January 4, 2006,
plaintiffs filed an amended complaint. On March 1, 2007, the court heard oral argument on the issue
of the appropriateness of class certification. The Company intends to defend these matters
vigorously.



On May 6, 2003, Sekuk Global Enterprises filed a purported stockholder class action in the United
States District Court for the Central District of California against the Company and Messrs. Neal,
O’Bryant and Skovran (then CEO, CFO and Controller, respectively) seeking damages and other relief
for alleged disclosure violations pertaining to alleged unlawful competitive practices.
Subsequently, another similar action was filed in the same court. On September 24, 2003, the court
appointed a lead plaintiff, approved lead and liaison counsel and ordered the two actions
consolidated as the “In Re Avery Dennison Corporation Securities Litigation.” Pursuant to court
order and the parties’ stipulation, plaintiff filed a consolidated complaint in mid-February 2004.
The court approved a briefing schedule for defendants’ motion to dismiss the consolidated
complaint, with a contemplated hearing date in June 2004. In January 2004, the parties stipulated
to stay the consolidated action, including the proposed briefing schedule, pending the outcome of
the government investigation of alleged anticompetitive conduct by the Company. On January 12,
2007, following the DOJ’s closing of its investigation, the plaintiffs filed a notice of voluntary
dismissal of the case without prejudice. On January 17, 2007, the Court entered an order dismissing
the case.



On May 21, 2003, The Harman Press filed in the Superior Court for the County of Los Angeles,
California, a purported class action on behalf of indirect purchasers of label stock against the
Company, UPM and UPM’s subsidiary Raflatac (“Raflatac”), seeking treble damages and other relief for
alleged unlawful competitive practices, essentially repeating the underlying allegations of the DOJ
Merger Complaint. Three similar complaints were filed in various California courts. In November
2003, on petition from the parties, the California Judicial Council ordered the cases be
coordinated for pretrial purposes. The cases were assigned to a coordination trial judge in the
Superior Court for the City and County of San Francisco on March 30, 2004. On January 21,




Schedule 5.09-2









 




2005, American International Distribution Corporation filed a purported class action on behalf of
indirect purchasers in the Superior Court for Chittenden County, Vermont. Similar actions were filed
by Richard Wrobel, on February 16, 2005, in the District Court of Johnson County, Kansas; and by
Chad and Terry Muzzey, on February 16, 2005 in the District Court of Scotts Bluff County, Nebraska.
On February 17, 2005, Judy Benson filed a purported multi-state class action on behalf of indirect
purchasers in the Circuit Court for Cocke County, Tennessee. The Company intends to defend these
matters vigorously.



On May 25, 2004, officials from the European Commission (“EC”), assisted by officials from national
competition authorities, launched unannounced inspections of and obtained documents from the
Company’s pressure-sensitive materials facilities in the Netherlands and Germany. The investigation
apparently sought evidence of unlawful anticompetitive activities affecting the European paper and
forestry products sector, including the label stock market. The Company cooperated with the now
closed investigation.



On July 9, 2004, the Competition Law Division of the Department of Justice of Canada notified the
Company that it was seeking information from the Company in connection with a label stock
investigation. The Company is cooperating with the investigation.



On May 18, 2005, Ronald E. Dancer filed a purported class action in the United States District
Court for the Central District of California against the Company, Mr. Neal, Karyn Rodriguez (VP and
Treasurer) and James Bochinski (then VP, Compensation and Benefits), for alleged breaches of
fiduciary duty under the Employee Retirement Income Security Act to the Company’s Employee Savings
Plan and Plan participants. The plaintiff alleges, among other things, that permitting investment
in and retention of Company Common Stock under the Plan was imprudent because of alleged
anticompetitive activities by the Company, and that failure to disclose such activities to the Plan
and participants was unlawful. Plaintiff seeks an order compelling defendants to compensate the
Plan for any losses and other relief. The court approved the parties’ stipulation to stay the
matter pending the outcome of the government investigation of alleged anticompetitive conduct by
the Company. The Company intends to defend this matter vigorously.



On August 18, 2005, the Australian Competition and Consumer Commission notified two of the
Company’s subsidiaries, Avery Dennison Material Pty Limited and Avery Dennison Australia Pty Ltd,
that it was seeking information in connection with a label stock investigation. The Company is
cooperating with the investigation.



On October 19, 2006, the DOJ notified the Company that the DOJ decided to close its criminal
investigation into competitive practices in the label stock industry without further action.



On November 15, 2006, the Company announced that it had been notified that the EC had closed its
investigation into the Company’s competitive activities in the label stock industry with no action.



The Board of Directors created an ad hoc committee comprised of independent directors to
oversee the foregoing matters.



The Company is unable to predict the effect of these matters at this time, although the effect
could be adverse and material.




Schedule 5.09-3









 




In 2005, the Company contacted relevant authorities in the U.S. and reported the results of an
internal investigation of potential violations of the U.S. Foreign Corrupt Practices Act. The
transactions at issue were carried out by a small number of employees of the reflective business in
China, and involved, among other things, impermissible payments or attempted impermissible
payments. The payments or attempted payments and the contracts associated with them appear to have
been relatively minor in amount and of limited duration. Corrective and disciplinary actions have
been taken. Sales of the reflective business in China in 2005 were approximately $7 million. Based
on findings to date, no changes to the Company’s previously filed financial statements were
warranted as a result of these matters. However, the Company expects that fines or other penalties
may be incurred. While the Company is unable to predict the financial or operating impact of any
such fines or penalties, the Company believes that our behavior in detecting, investigating,
responding to and voluntarily disclosing these matters to authorities should be viewed favorably.



The Company and its subsidiaries are involved in various other lawsuits, claims and inquiries, most
of which are routine to the nature of the business. Based upon current information, the Company
believes that the resolution of these other matters will not materially affect us.




Schedule 5.09-4









 





Schedule 10.06


PAYMENT OFFICE AND

ADDRESSES FOR NOTICES




	 	 	 
	AVERY DENNISON CORPORATION
	 
	 	 
	AVERY DENNISON CORPORATION
	150 North Orange Grove Boulevard
	Pasadena, California 91103
	Attention:

	 	Karyn E. Rodriguez
	 

	 	Vice President and Treasurer
	 

	 	Telephone: 626-304-2210
	 

	 	Facsimile: 626-304-2319
	 
	 	 
	JPMORGAN CHASE BANK, N.A.
	 
	 	 
	JPMORGAN CHASE BANK, N.A.
	1111 Fannin, 10th Floor
	Houston, Texas 77002
	Attention:

	 	Claudia Correa
	 

	 	Telephone: 713-750-2128
	 

	 	Facsimile: 713-750-2782
	 
	 	 
	with a copy to
	 	 
	 
	 	 
	JPMORGAN CHASE BANK, N.A.
	270 Park Avenue, 4th Floor
	New York, New York 10017
	Attention:

	 	Thomas Hou
	 

	 	Telephone: 212-270-6072
	 

	 	Facsimile: 212-270-6637
















 





EXHIBIT A




FORM OF NOTICE OF BORROWING



TO:    JPMorgan Chase Bank, N.A., as Administrative Agent




     Pursuant to Section 2.03 of that certain Revolving Credit Agreement dated
as of                     , 2007 (as from time to time amended, extended, restated, modified
or supplemented, the “Credit Agreement;” capitalized terms used herein shall have the meanings
assigned to them in the Credit Agreement), among Avery Dennison Corporation (the “Borrower”), the
Banks named therein (the “Banks”), and JPMorgan Chase Bank, N.A., as administrative agent (the
“Administrative Agent”), this represents Borrower’s request to borrow on                      from the
Banks, according to their respective Pro Rata Share, $                      as [Base Rate]
[Eurodollar Rate] Loans. [The initial Interest Period for such Eurodollar Rate is
requested to be a
                    
-month period]. The proceeds of such Loans are to be deposited in Borrower’s account at the Administrative Agent.



     The undersigned Designated Officer hereby certifies that [, except as described in a schedule
attached hereto (which is subject to the approval of the Majority Banks),] the representations and
warranties contained in Section 5 of the Credit Agreement (other than in Sections 5.06 and 5.09)
are true and correct in all material respects, and are deemed made, on and as of the date of the
Loan as though made on and as of that date, and no state of facts constituting a Default or an
Event of Default has occurred and is continuing or will result from the proposed borrowing.



	 	 	 	 	 	 	 
	DATED:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	AVERY DENNISON CORPORATION  
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 	 	 	 	 	 	 





A-l 
Notice of Borrowing














 






EXHIBIT B




FORM OF NOTICE OF CONVERSION/CONTINUATION



JPMorgan Chase Bank, N.A., as Administrative Agent




     1. Conversion Selection. Pursuant to Section 2.04 of that certain
Revolving Credit Agreement dated as of                     , 2007 (as from time to time
amended, extended, restated, modified or supplemented, the “Credit Agreement;” capitalized terms
used herein shall have the meanings assigned to them in the Credit Agreement), among Avery Dennison
Corporation (the “Borrower”), the Banks named therein (the “Banks”), and JPMorgan Chase Bank, N.A.,
as administrative agent (the “Administrative Agent”), this represents Borrower’s request to convert $                     of existing [Base Rate]
[Eurodollar Rate] Loans on                     , 20                     , into [Eurodollar Rate] [Base Rate]
Loans, as follows:



	 	 	 	 	 	 	 
	 
	 	 	 	Interest Period	 	 
	 
	 	 	 	(Eurodollar	 	 
	 
	 	Amount
	 	Rate Loans)
	 	 
	 
	 	 
	 	 	 	 
	 
	 	$                    
	 	                     months	 	 






     2. Continuation Selection. (Eurodollar Rate Loans). Pursuant to
Section 2.04 of the Agreement, please continue $                     of existing Eurodollar
Rate Loans, the final day of the current Interest Period of which is                     ,
20                     , as follows:



	 	 	 	 	 	 	 
	 
	 	 	 	Requested Interest	 	 
	 
	 	 	 	Period	 	 
	 
	 	 	 	(Eurodollar
	 	 
	 
	 	Amount
	 	Rate Loans)	 	 
	 
	 	 
	 	 	 	 
	 
	 	$                    
	 	                     months	 	 






     3. Representations and Warranties; No Default. The undersigned
Designated Officer hereby certifies that no state of facts constituting a Default or
an Event of Default has occurred and is continuing or will result from the
proposed [conversion to Eurodollar Rate Loans] [continuation].




B-1

Notice of Conversion/Continuation












 





	 	 	 	 	 	 	 
	 	 	AVERY DENNISON CORPORATION  
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 






B-2

Notice of Conversion/Continuation












 





EXHIBIT C




COMPLIANCE CERTIFICATE



JPMorgan Chase Bank, N.A., as Administrative Agent




     Reference is made to that certain Revolving Credit Agreement dated as of


                    , 2007 (as from time to time amended, extended, restated, modified or
supplemented, the “Credit Agreement;” capitalized terms used herein shall have the meanings
assigned to them in the Credit Agreement), among Avery Dennison Corporation (the “Borrower”), the
Banks named therein (the “Banks”), and JPMorgan Chase Bank, N.A., as administrative agent (the
“Administrative Agent”).



     I,                     , hereby certify that I am a Designated Officer of
Borrower holding the office set forth below my signature and that:



     1.       Based on the duly certified financial statements delivered concurrently
with this Certificate, as of the date thereof:



     A.       LEVERAGE RATIO (Section 7.07(a))



	 	 	 	 	 
	1. Consolidated Debt:
	 	$	                    	 
	2. Consolidated EBITDA
	 	$	                    	 
	a. Consolidated Net Income:
	 	$	                    	 
	b. Consolidated Interest:
	 	$	                    	 
	c. Provision for income taxes:
	 	$	                    	 
	d. Depreciation and amortization expense:
	 	$	                    	 
	e. Total (Lines A.2.a + b + c + d):
	 	$	                    	 
	4. Leverage Ratio (Line 1 ÷ Line 2.e.):
	 	                    to 1	 






     Maximum permitted Leverage Ratio: 3.50 to 1.



     B.      INTEREST COVERAGE RATIO (Section 7.07(b))



	 	 	 	 	 
	1. Consolidated Earnings Before Interest and Taxes: 
	 	$	 

	2. Consolidated Interest: 
	 	$	 

	3. Ratio of Consolidated Earnings Before Interest and

Taxes to Consolidated Interest (Line Bl ÷ Line B2):
	 	                    to 1
	 	 	 	 






Required minimum: Ratio to be 3.50 to 1 or more.



C-1

Compliance Certificate













 





     2. The following constitutes a further explanation of the manner in
which the foregoing data relate to the attached financial statements to the extent
not readily apparent:




	 	 	 







	 	 	 







	 	 	 






     3. I have reviewed the activities of Borrower and its Subsidiaries
during the fiscal period covered by the attached financial statements to the extent
necessary to permit me to deliver this Certificate.



     4. Except with respect to the Defaults and Events of Default specified
and explained as to their nature and status below, Borrower and its Subsidiaries
have performed and observed each covenant and condition of the Loan
Documents applicable to them during the fiscal period covered by the attached
financial statements, and there exists no Default or Event of Default:




	 	 	 







	 	 	 







	 	 	 







C-2

Compliance Certificate












 





     IN WITNESS WHEREOF, I have signed this Compliance Certificate on
behalf of Avery Dennison Corporation on this                      day of                     , 20                     .



	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 







C-3

Compliance Certificate












 





EXHIBIT D




ASSIGNMENT AND ASSUMPTION




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



     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below, the interest in and to
all of the Assignor’s rights and obligations under the Credit Agreement and any other documents or
instruments delivered pursuant thereto that represents the amount and percentage interest
identified below of all of the Assignor’s outstanding rights and obligations under the facility
identified below (including, without limitation, to the extent permitted to be assigned under
applicable law, all claims (including, without limitation, contract claims, tort claims,
malpractice claims and all other claims at law or in equity, including claims under any law
governing the purchase and sale of securities or governing indentures pursuant to which securities
are issued), suits, causes of action and any other right of the Assignor against any other Person)
(the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except
as expressly provided in this Assignment and Assumption, without representation or warranty by the
Assignor.



	 	 	 
	1. Assignor:
	 	                    
	 
	 	 
	2. Assignee:
	 	                                 [and is an Affiliate/Approved Fund
	 
	 	of [identify Bank]1]
	 
	 	 
	3. Borrower:
	 	                    
	 
	 	 
	4. Administrative
	 	                            , as the administrative agent under the
	Agent:
	 	Credit Agreement








 




			
	1	 	Select as applicable.






D-1

Assignment and Assumption












 





	 	 	 
	5. Credit Agreement:
	 	Revolving Credit Agreement, dated as of                     , 2007 (as from time to time amended, extended, restated, modified or supplemented), among Borrower, the Banks named therein, and JPMorgan Chase Bank, N.A., as Administrative Agent
	 
	 	 
	6. Assigned Interest:
	 	 






	 	 	 	 	 
	Aggregate 

Amount of 

Commitment/Loans 

for all Banks*
	 	
Amount of

Commitment/Loans

Assigned*
	 	
Percentage

Assigned of

Commitment/Loans2
	 
	 	 
	 	 
	$                     
	 	$                     
	 	                     %






	 	 	 
	[7.    Trade Date:                      3




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






 




			
	*	 	Amount to be adjusted by the counterparties to take into account any payments or
prepayments made between the Trade Date and the Effective Date.
	 
	2	 	Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all
Banks thereunder.
	 
	3	 	To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.






D-2

Assignment and Assumption












 





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



	 	 	 	 	 	 	 
	 	 	ASSIGNOR	 	 
	 	 	[NAME OF ASSIGNOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE	 	 
	 	 	[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 





[Consented to:]4



AVERY DENNISON CORPORATION




	 	 	 	 	 
	By:

	 	 	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 








 




			
	4	 	To be added only when the consent of Borrower is required by the terms of
the Credit Agreement.






D-3

Assignment and Assumption












 





ANNEX I TO ASSIGNMENT AND ASSUMPTION




Credit Agreement

Dated as of                     , 2007

among Avery Dennison Corporation,

the Banks named therein, and JPMorgan Chase Bank, N.A.,

as Administrative Agent




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION




     1. Representations and Warranties.



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



     1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Bank under the
Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Bank
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Bank
thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Bank, and (v) if it is a Foreign Bank, attached hereto is any




D-4

Assignment and Assumption












 




documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Bank.




     1.3. Assignee’s Address for Notices, etc. Attached hereto as Schedule 1 is all
contact information, address, account and other administrative information relating to the
Assignee.



     2. Payments. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned interest (including
payments of principal, interest, fees and other amounts) to the Assignee whether
such amounts have accrued prior to or on or after the Effective Date. The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Administrative Agent for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.



     3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and
Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. This Assignment and
Assumption shall be governed by, and construed in accordance with, the law of
the State of New York.




D-5

Assignment and Assumption












 





SCHEDULE I TO ASSIGNMENT AND ASSUMPTION




ADMINISTRATIVE DETAILS




     (Assignee to list names of credit contacts, addresses, phone and facsimile numbers, electronic
mail addresses and account and payment information)





D-6

Assignment and Assumption