exv10w1



 






	 	 	 	 	 



Exhibit 10.1




EXECUTION COPY




$500,000,000




CREDIT AGREEMENT




dated as of January 8, 2007




among




THE STANLEY WORKS




and




THE INITIAL LENDERS NAMED HEREIN




and




CITIBANK, N.A.,

as Administrative Agent




CITIGROUP GLOBAL MARKETS INC.,

as Lead Arranger and Book Runner





 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	SECTION 1.01. Certain Defined Terms
	 	 	1	 
	SECTION 1.02. Computation of Time Periods; Terms Generally
	 	 	11	 
	SECTION 1.03. Accounting Terms
	 	 	11	 
	 
	 	 	 	 
	ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
	 	 	11	 
	SECTION 2.01. The Commitment
	 	 	11	 
	SECTION 2.02. Making the Advances
	 	 	12	 
	SECTION 2.03. Fees
	 	 	14	 
	SECTION 2.04. Continuation and Conversion
	 	 	15	 
	SECTION 2.05. Interest on Advances
	 	 	16	 
	SECTION 2.06. Additional Interest on Eurodollar Rate Advances
	 	 	16	 
	SECTION 2.07. Repayment; Prepayment
	 	 	17	 
	SECTION 2.08. Increased Costs
	 	 	17	 
	SECTION 2.09. Payments and Computations
	 	 	18	 
	SECTION 2.10. Taxes
	 	 	20	 
	SECTION 2.11. Promissory Notes
	 	 	20	 
	SECTION 2.12. Use of Proceeds of Advances
	 	 	21	 
	SECTION 2.13. Borrowing by the Designated Borrower
	 	 	21	 
	 
	 	 	 	 
	ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING
	 	 	22	 
	SECTION 3.01. Condition Precedent to Effectiveness
	 	 	22	 
	SECTION 3.02. Conditions Precedent to Each Advance
	 	 	23	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	24	 
	SECTION 4.01. Representations and Warranties of the Company
	 	 	24	 
	 
	 	 	 	 
	ARTICLE V COVENANTS OF THE BORROWER
	 	 	25	 
	SECTION 5.01. Affirmative Covenants
	 	 	25	 
	SECTION 5.02. Negative Covenants
	 	 	28	 
	 
	 	 	 	 
	ARTICLE VI EVENTS OF DEFAULT
	 	 	30	 
	SECTION 6.01. Events of Default
	 	 	30	 
	 
	 	 	 	 
	ARTICLE VII THE ADMINISTRATIVE AGENT
	 	 	32	 
	SECTION 7.01. Authorization and Action
	 	 	32	 
	SECTION 7.02. Administrative Agent’s Reliance, Etc.
	 	 	32	 
	SECTION 7.03. Citibank and Affiliates
	 	 	33	 
	SECTION 7.04. Lender Credit Decision
	 	 	33	 
	SECTION 7.05. Indemnification
	 	 	33	 






(i)









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 7.06. Successor Administrative Agent
	 	 	33	 
	 
	 	 	 	 
	ARTICLE VIII MISCELLANEOUS
	 	 	34	 
	SECTION 8.01. Amendments, Etc.
	 	 	34	 
	SECTION 8.02. Notices, etc.
	 	 	34	 
	SECTION 8.03. No Waiver; Remedies
	 	 	36	 
	SECTION 8.04. Costs and Expenses; Breakage Indemnification
	 	 	36	 
	SECTION 8.05. Sharing of Payments, Etc.
	 	 	37	 
	SECTION 8.06. Binding Effect
	 	 	37	 
	SECTION 8.07. Assignments and Participations
	 	 	37	 
	SECTION 8.08. Limitation on Assignments and Participations
	 	 	39	 
	SECTION 8.09. Withholding
	 	 	40	 
	SECTION 8.10. Mitigation
	 	 	41	 
	SECTION 8.11. Governing Law; Waiver of Jury Trial
	 	 	41	 
	SECTION 8.12. Execution in Counterparts
	 	 	41	 
	SECTION 8.13. Submission to Jurisdiction; Etc.
	 	 	41	 
	SECTION 8.14. Judgment Currency
	 	 	42	 
	SECTION 8.15. USA PATRIOT Act
	 	 	42	 
	 
	 	 	 	 
	ARTICLE IX GUARANTEE
	 	 	42	 
	SECTION 9.01. Guarantee
	 	 	42	 
	SECTION 9.02. Acknowledgments, Waivers and Consents
	 	 	42	 
	SECTION 9.03. Reinstatement
	 	 	45	 
	SECTION 9.04. Subrogation
	 	 	45	 
	SECTION 9.05. Remedies
	 	 	45	 
	SECTION 9.06. Payments
	 	 	46	 
	 
	 	 	 	 





	 	 	 
	SCHEDULE I

	 	ADDRESSES, APPLICABLE LENDING OFFICES AND COMMITMENTS
	 
	 	 
	EXHIBIT A-1

	 	FORM OF RATE REQUEST
	EXHIBIT A-2

	 	FORM OF NOTICE OF BORROWING
	EXHIBIT B

	 	FORM OF NOTICE OF CONVERSION OR CONTINUATION
	EXHIBIT C-1

	 	FORM OF OPINION OF COUNSEL TO THE COMPANY
	EXHIBIT C-2

	 	FORM OF OPINION OF SPECIAL NEW YORK COUNSEL TO THE ADMINISTRATIVE AGENT
	EXHIBIT D

	 	FORM OF ASSIGNMENT AND ACCEPTANCE
	EXHIBIT E

	 	FORM OF NOTE
	EXHIBIT F

	 	FORM OF DESIGNATION LETTER






(ii)









 






CREDIT AGREEMENT




          This CREDIT AGREEMENT (as amended, supplemented or otherwise modified from time to time,
the “Agreement”) is made as of this 9th day of January, 2007 among THE STANLEY
WORKS, a Connecticut corporation (the “Company”), the banks, financial institutions and
other institutional lenders (the “Initial Lenders”) listed on the signature pages hereof,
and CITIBANK, N.A. (“Citibank”), as administrative agent (in such capacity, the
“Administrative Agent”) for the Lenders (as hereinafter defined).




          The Company proposes to acquire, directly or through the Designated Borrower referred to
below, 100% of the shares of capital stock of HSM Electronic Protection Services, Inc. pursuant to
the Acquisition Agreement referred to below (the “Acquisition”), and has requested the
Lenders to make advances to the Company to finance the Acquisition; and the Lenders are prepared to
make such advances on and subject to the terms and conditions of this Agreement.




          Accordingly, the parties agree as follows:




ARTICLE I




DEFINITIONS AND ACCOUNTING TERMS




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




          “Acquiring Person” means any person (other than the ESOP) who is or becomes the
beneficial owner, directly or indirectly, of 10% or more of the Company’s outstanding common stock.




          “Acquisition” has the meaning specified in the second paragraph of this Agreement.




          “Acquisition Agreement” means the Stock Purchase Agreement dated as of December 13,
2006 by and among the Company, SecurityCo Holdings, LLC, a Delaware limited liability company, and
SecurityCo Solutions, Inc., a Delaware corporation, as amended from time to time.




          “Advance” has the meaning set forth in Section 2.01.




          “Administrative Agent’s Account” means the account of the Administrative Agent
maintained by the Administrative Agent and most recently designated by it by notice to the Lenders
and the Company.




          “Applicable Eurodollar Margin” means, on any date for each Eurodollar Rate Advance,
(i) 0.1300% if on such date the Company’s outstanding Long-Term Indebtedness is






 









 








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rated A+ or higher
by Standard & Poor’s or A1 or higher by Moody’s, (ii) 0.1700% if on such date clause (i) is
inapplicable and the Company’s outstanding Long-Term Indebtedness is rated A or higher by Standard
& Poor’s or A2 or higher by Moody’s, (iii) 0.2600% if on such date clauses (i) and (ii) are
inapplicable and the Company’s outstanding Long-Term Indebtedness is rated A- or higher by Standard
& Poor’s or A3 or higher by Moody’s, (iv) 0.3750% if on such date clauses (i), (ii) and (iii) are
inapplicable and the Company’s outstanding Long-Term Indebtedness is rated BBB+ or higher by
Standard & Poor’s or Baa1 or higher by Moody’s, (v) 0.5750% if on such date clauses (i), (ii),
(iii) and (iv) are inapplicable (including if such Long-Term Indebtedness is no longer rated by
either agency); provided that if the respective levels of the Company’s outstanding
Long-Term Indebtedness credit ratings differ, the “Applicable Eurodollar Margin” will be determined
based on the level one above that level applicable to the lower of said credit ratings.




          “Applicable Facility Fee Rate” means, on any date, a rate per annum equal to (i)
0.0700% if on such date the Company’s outstanding Long-Term Indebtedness is rated A+ or higher by
Standard & Poor’s or A1 or higher by Moody’s, (ii) 0.0800% if on such date clause (i) is
inapplicable and the Company’s outstanding Long-Term Indebtedness is rated A or higher by Standard & Poor’s or A2 or higher by Moody’s, (iii)
0.0900% if on such date clauses (i) and (ii) are inapplicable and the Company’s outstanding
Long-Term Indebtedness is rated A- or higher by Standard & Poor’s or A3 or higher by Moody’s, (iv)
0.1250% if on such date clauses (i), (ii) and (iii) are inapplicable and the Company’s outstanding
Long-Term Indebtedness is rated BBB+ or higher by Standard & Poor’s or Baa1 or higher by Moody’s,
and (v) 0.1750% if on such date clauses (i), (ii), (iii) and (iv) are inapplicable (including if
such Long-Term Indebtedness is no longer rated by either agency); provided that if the
respective levels of the Company’s outstanding Long-Term Indebtedness credit ratings differ, the
“Applicable Facility Fee Rate” will be determined based on the level one above that level
applicable to the lower of said credit ratings.




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




          “Applicable Utilization Fee Rate” means, for each day on which the Utilization Ratio
exceeds 0.50, a rate per annum equal to (i) 0.1000% if on such date the Company’s outstanding
Long-Term Indebtedness is rated A- or higher by Standard & Poor’s or A3 or higher by Moody’s, and
(ii) 0.1250% if on such date clause (i) is inapplicable (including if such Long-Term Indebtedness
is no longer rated by either agency); provided that if the respective levels of the
Company’s outstanding Long-Term Indebtedness credit ratings differ, the “Applicable Utilization Fee
Rate” will be determined based on the level one above that level applicable to the lower of said
credit ratings.




          “Assignment and Acceptance” means an assignment and acceptance accepted by the
Administrative Agent in substantially the form of Exhibit D hereto.




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




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 3 




          (a) the rate of interest announced publicly by the Reference Bank in New York, New York, from time to time, as its base rate;




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




          “Base Rate Advance ” means an Advance denominated in Dollars that bears interest as provided in Section 2.05(a).




          “Borrower ” means the Company or, in the case of a Borrowing by the Designated Borrower, the Designated Borrower.




          “Borrowing” means a borrowing of Advances hereunder.




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




          “Capital Lease” means any lease of property, real or personal, the obligations under which are capitalized on the consolidated balance sheet of the Company and its Subsidiaries.




          “Change of Control” means, with respect to the Company, the occurrence of any event, act or condition which results in either (i) any Person other than the ESOP becoming the beneficial owner, directly or indirectly, of 30% or more of the outstanding common stock of the Company or (ii) individuals who constitute
the Continuing Directors ceasing for any reason to constitute at least the majority of the Board of Directors of the Company.




          “Citibank” has the meaning specified in the first paragraph of this Agreement.




          “Commitment” means, with respect to any Lender, the amount specified opposite such Lender’s name on Schedule I hereto or, if such Lender has entered into any Assignment and Acceptance, set forth for such Lender in the Register maintained by the Administrative Agent pursuant to Section 8.07(d), as such
amount may be reduced pursuant to Section 2.01(b). The aggregate amount of the Commitments on the date hereof is $500,000,000.




          “Company” has the meaning specified in the first paragraph of this Agreement.




          “Consolidated Net Tangible Assets” means the excess over current liabilities of all assets properly appearing on a consolidated balance sheet of the Company and its Subsidiaries after deducting goodwill, trademarks, patents, other like intangibles and the minority interests of others in Subsidiaries.




          “Consolidated Subsidiary” means at any date any Subsidiary or other entity the financial statements of which would, under GAAP, be consolidated with those of the Company in its consolidated financial statements as of such date.




CREDIT AGREEMENT




 









 








 4 




          “Contingent
Obligation” as to any Person means any obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations
(“primary obligations”) of any
other Person (the “primary obligor”) in any manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary
obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the owner of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount
of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.




          “Continuing Director” means any member of the Board of Directors of the Company who is not affiliated with an Acquiring Person and who is a member of the Board of Directors of the Company immediately prior to the time that the Acquiring Person became an Acquiring Person and any successor to a Continuing Director who is not affiliated with the Acquiring Person and is recommended
to succeed a Continuing Director by a majority of Continuing Directors who are then members of the Board of Directors of the Company.




          “Debt or
Equity Issuance” means the issuance by the Company or any of its domestic United States Subsidiaries, in a public or private
offering or private placement, of (i) bonds, notes or other debt securities (including senior or subordinated notes, convertible
notes and debt private placements), other than any Indebtedness of any Subsidiary of the Company issued to the Company or
any other Subsidiary of the Company or of the Company to any of its Subsidiaries, or (ii) equity securities (including
preferred equity and convertible preferred equity securities), other than any issuance of equity securities by a Subsidiary of the
Company to the Company or any of its Subsidiaries and any issuance of equity securities to directors, officers or employees of the
Company or any of its Subsidiaries.




          “Default” means an event which would constitute an Event of Default but for the giving of notice, the lapse of time or both.




          “Designated Borrower” means a domestic United States Subsidiary of the Company that may be established by the Company for the purpose of effecting the Acquisition and the financing thereof, as to which a Designation Letter has been delivered to the Administrative Agent in accordance with and together with the other documents required by Section 2.13.




          “Designation Letter” has the meaning provided in Section 2.l3.




          “Dollars” and “ $ “ mean lawful money of the United States of America.




CREDIT AGREEMENT





 









 








 5 




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




          “EBITDA” means, for any period, the sum (without duplication) for the Company and its Consolidated Subsidiaries on a consolidated basis of the following: (a) net income for such period plus (b) to the extent deducted in determining net income for such period, the sum of (i) depreciation and
amortization for such period, (ii) Interest Expense for such period and (iii) taxes for such period.




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




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




          “ERISA Controlled Group” means a group consisting of any ERISA Person and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control with such Person that, together with such Person, are treated as a single employer under regulations promulgated under ERISA.




          “ERISA Person” has the meaning provided in Section 3(9) of ERISA for the term “person.”




          “ERISA Plan” means (i) any Plan that (x) is not a Multiemployer Plan and (y) has Unfunded Benefit Liabilities in excess of $20,000,000 and (ii) any Plan that is a Multiemployer Plan.




          “ESOP” means Stanley Account Value Plan or any successor plan.




          “Eurocurrency Liabilities” has the meaning provided in Regulation D (or any successor regulation) of the Federal Reserve Board, as in effect from time to time.




          “Eurocurrency Rate Reserve Percentage” for any Lender for any Eurodollar Rate Advances owing to such Lender means the reserve percentage applicable two Business Days before the first day of the applicable Interest Period under regulations
issued from time to time by the Federal Reserve Board for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Lender with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to the applicable Interest Period.




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




CREDIT AGREEMENT




 









 








 6 



other office of such Lender as such Lender may from time to time specify in writing to the Company and the Administrative Agent.




        
  “Eurodollar Rate” means, for any Interest Period, for each Eurodollar Rate
Advance comprising part of the same Borrowing, an interest rate per annum equal to the offered rate for deposits
in Dollars as quoted on the relevant Screen Page at 11:00 A.M. (London time) two London Banking Days before
the first day of such Interest Period in an amount substantially equal to the Reference Bank’s Eurodollar Rate
Advance comprising part of such Borrowing to be outstanding during such Interest Period and for a period equal to such Interest Period.




          “Eurodollar Rate Advance” means an Advance that bears interest as provided in Section 2.05(b).




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




          “Excluded Representation” means the representation and warranty set forth in Section 4.01(g).




          “Federal Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy”, as amended from time to time, or any successor thereto.




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




          “Federal Reserve Board” means the Board of Governors of the Federal Reserve System as constituted from time to time.




          “GAAP” means United States generally accepted accounting principles as in effect from time to time.




          “Hedge Agreements” means interest rate swap, cap or collar agreements, interest rate future or option contracts, currency swap agreements, currency future or option contracts and other similar agreements.




          “Indebtedness” of any Person means, without duplication, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business of such Person), (ii) all indebtedness of such Person evidenced by a note, bond, debenture or similar instrument, (iii) the
principal component of all Capital Lease obligations of such Person, (iv) the face amount of all letters of credit issued for the account of such Person and, without duplication, all unreimbursed amounts drawn thereunder, (v) all indebtedness of any other Person secured by any Lien on any property owned by such Person, whether or not such indebtedness has been assumed, (vi) all




CREDIT AGREEMENT




 









 








 7 



Contingent Obligations of such Person, and (vii) all indebtedness of such Person in respect of Hedge Agreements.




          “Initial Lenders” has the meaning specified in the first paragraph of this Agreement.




          “Interest Coverage Ratio” means, for any period of four consecutive fiscal quarters, the ratio of (a) EBITDA for such period to (b) Interest Expense for such period.




          “Interest Expense” means, for any period, the
sum (determined without duplication) of the aggregate amount of interest reported in respect of such period on the Indebtedness of
the Company and its Consolidated Subsidiaries on a consolidated basis, including, without limitation, the interest portion of payments
under Capital Lease obligations and any capitalized interest,
minus (i) interest income of the Company and its Consolidated
Subsidiaries on a consolidated basis reported in respect of such period and (ii) interest on deferred compensation reported
in respect of such period.




          “Interest Period” means, for each Eurodollar Rate Advance comprising part of the same Borrowing, the period commencing on the date of such Advance or the date of the continuation of such Advance or the date of the conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending on the last day of the period selected by a Borrower pursuant to the provisions below.
 The duration of each such Interest Period shall be one, two, three
or six months, in each case as the Borrower may select in the Notice
of Borrowing or Notice of Conversion or Continuation, as the case may be; provided that





     (i) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest
Period shall be extended to occur on the next succeeding Business
Day; provided that if, in the case of any Interest Period with respect to any Eurodollar Rate Advance, such extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day;




     (ii) any Interest Period which 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, subject to clause (iv) below, end on the last Business Day of a calendar month;




     (iii) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date;




     (iv) if, upon the expiration of any Interest Period with respect to a Borrowing consisting of Eurodollar Rate Advances, the Borrower has failed to elect a new Interest Period to be applicable to such Advances as provided above, the Borrower shall be deemed to have elected to convert such Advances into a Base Rate Advance effective as of the expiration date of such current Interest Period; and




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



CREDIT AGREEMENT




 









 








 8 




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




          “Lenders” means the Initial Lenders and each Person that shall become a party hereto pursuant to Section 8.07.




          “Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preferential payment arrangement, priority or other security agreement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same effect
as any of the foregoing and the filing of any financing statement or similar instrument under the Uniform Commercial Code or comparable law of any jurisdiction, domestic or foreign.




          “Loan Documents” means, collectively, this Agreement, the Notes and the Designation Letter, if any.




          “London Banking Day” means any day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) in London.




          “Long-Term Indebtedness” means the long-term Senior Unsecured Indebtedness of the Company.




          “Margin Stock” has the meaning provided in Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.




          “Material Adverse Effect” means a material adverse effect on the business, financial condition or results of operations of the Company and its Consolidated Subsidiaries taken as a whole.




          “Moody’s” means Moody’s Investors Service, Inc. and any successor or successors thereto.




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




          “Note” has the meaning provided in Section 2.11.




          “Notice of Borrowing” has the meaning provided in Section 2.02(b).




          “Notice of Conversion or Continuation” has the meaning provided in Section 2.04(b) .




          “Other Taxes” has the meaning provided in Section 2.10(b).




          “PBGC” means the Pension Benefit Guaranty Corporation established under ERISA, or any successor thereto.




CREDIT AGREEMENT




 









 








 9 




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




          “Plan” means any employee benefit plan covered by Title IV of ERISA, the funding requirements of which:





     (i) were the responsibility of the Company or a member of its ERISA Controlled Group at any time within the five years immediately preceding the date hereof,




     (ii) are currently the responsibility of the Company or a member of its ERISA Controlled Group, or




     (iii) hereafter become the responsibility of the Company or a member of its ERISA Controlled Group, including any such plans as may have been, or may hereafter be, terminated for whatever reason.



          “Principal Property” means all real property and tangible personal property constituting a manufacturing plant owned by the Company or any of its Subsidiaries, exclusive of (i) motor vehicles, mobile materials handling equipment and other rolling stock, (ii) office furnishings and equipment, information and electronic data processing equipment, (iii) any property
financed through obligations issued by a state, territory or possession of the United States, or any political subdivision or instrumentality of the foregoing, on which the interest cannot, in the opinion of tax counsel of recognized standing or in accordance with a ruling issued by the Internal Revenue Service, be included in gross income of the holder under Section 103(a)(1) of the Internal Revenue Code (or any successor to such provision) as in effect at the time of the issuance of such obligations,
 (iv) any real property held for development or sale, or (v) any property and equipment included therein without deduction of any depreciation reserves the book value of which property and equipment in the aggregate is less than 10% of Consolidated Net Tangible Assets or which the Board of Directors of the Company determines is not material to the operation of the business of the Company and its Subsidiaries taken as a whole.




          “Principal Subsidiary” means any Subsidiary of the Company which has net sales which represent 15% or more of the consolidated net sales of the Company and its Consolidated Subsidiaries taken as a whole.




          “Process Agent” has the meaning provided in Section 8.13(b).




          “Pro Rata Share” means, with respect to any Lender, the percentage corresponding to the fraction the numerator of which shall be the amount of the Commitment of such Lender and the denominator of which shall be the aggregate amount of the Commitments of all Lenders.




          “Reference Bank” means Citibank or, if Citibank is no longer the Administrative Agent, such Person (which shall be a Lender or the Administrative Agent) as shall be designated




CREDIT AGREEMENT




 









 








 10 



by the Company with the consent of the Required Lenders, which consent shall not be unreasonably withheld.




          “Register” has the meaning provided in Section 8.07(d).




          “Reportable Event” has the meaning provided in Section 4043(b) of ERISA (other than a Reportable Event as to which the provision of 30 days notice to the PBGC is waived under applicable regulations).




          “Required Lenders” means at any time Lenders representing in the aggregate at least 51% of the Commitments or, if the Commitments shall have terminated, Lenders representing in the aggregate at least 51% of the sum of the Advances owing to Lenders hereunder.




          “Screen Page” means (a) the display designated as Page 3750 on the Telerate Service (or such other page as may replace that page on that service for the purpose of displaying London interbank offered rates of major banks) and (b) if the relevant rate does not appear on said Page, the “LIBO Page” so designated on the Reuter Monitor Money Rates Service (or such
 other page as may replace that page on that service for the purpose of displaying London interbank offered rates of major banks). If more than one relevant rate appears on said Page 3750 with respect to an Interest Period, or, if no rates appear on said Page 3750, or more than one relevant rate appears on the “LIBO Page” with respect to an Interest Period, the Eurodollar Rate for that Interest Period will be based upon the arithmetic mean of such relevant rates.




          “Senior Unsecured Indebtedness” means Indebtedness that is not subordinated to any other Indebtedness and is not secured or supported by a guarantee, letter of credit or other form of credit enhancement.




          “Standard & Poor’s” means Standard & Poor’s Ratings Services and any successor or successors thereto.




          “Subsidiary” of any Person means (i) any corporation 50% or more of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any
 contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (ii) any partnership, association, joint venture, limited liability company or other entity in which such Person, directly or indirectly through Subsidiaries, is either a general partner or has a 50% or more equity interest at the time.




          “Taxes” has the meaning provided in Section 2.10(a).




          “Termination Date” means the earlier of (a) the date 364 days after the date hereof or (b) the date of termination in whole of the Commitments pursuant to Section 2.01(b) or Section 6.01.




          “Termination Event” means (i) a Reportable Event, or (ii) the initiation of any action by the Company, any member of the Company’s ERISA Controlled Group or any ERISA




CREDIT AGREEMENT




 









 








 11 



Plan fiduciary to terminate an ERISA Plan or the treatment of an amendment to an ERISA Plan as a termination under ERISA, or (iii) the institution of proceedings by the PBGC under Section 4042 of ERISA to terminate an ERISA Plan or to appoint a trustee to administer any ERISA Plan.




          “Type” refers to whether an Advance is a Base Rate Advance or a Eurodollar Rate Advance.




          “Unfunded Benefit Liabilities” means with respect to any Plan at any time, the amount (if any) by which (i) the present value of all benefit liabilities under such Plan as defined in Section 4001(a)(16) of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan
(on the basis of assumptions prescribed by the PBGC for the purpose of Section 4044 of ERISA).




          “Utilization Ratio” means, at any time, the ratio of (i) the aggregate outstanding principal amount of the Advances at such time to (ii) the aggregate amount of the Commitments at such time.




          SECTION 1.02. Computation of Time Periods; Terms Generally.
In this Agreement in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.




          SECTION 1.03. Accounting Terms.
All accounting terms not specifically defined herein shall be construed in accordance with GAAP.




ARTICLE II




AMOUNTS AND TERMS OF THE ADVANCES





     SECTION 2.01. The Commitment. (a) The Advances. (i) Each Lender agrees, on the terms and conditions hereinafter
set forth, to make one or more advances to the Company or the Designated Borrower as hereinafter
provided (each an “Advance”) from time to time on any Business Day during the period from the Effective Date until
the Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender’s Commitment and, as to all Lenders, in an aggregate amount not to exceed $500,000,000 at any time outstanding.




     (ii) Within the limits of each Lender’s Commitment, the Company or the Designated Borrower may borrow, repay, prepay (as provided in Section 2.07) and reborrow such amount or any portion thereof.




     (iii) Each Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof or, if less, the aggregate amount of the unused



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 12 





Commitments and shall consist of Advances of the same Type made on the same day by the Lenders ratably according to their respective Commitments.



          (b) Termination and Reduction. The Company shall have the right, upon at least two Business Days’ notice to the
Administrative Agent, to terminate in whole or reduce each Lender’s Pro Rata Share of the unused Commitments. Each partial
reduction of the Commitments shall be in the aggregate amount of at least $10,000,000 or a larger whole multiple of $1,000,000.




          SECTION 2.02. Making the Advances. (a)  Determination of
Eurodollar Rate. The Company (on its own behalf or on behalf of the Designated Borrower) may request the Reference Bank, no earlier
than 9:00 A.M. (New York City time) and no later than 11:00 A.M. (New York City time) on the third Business Day before a proposed
Eurodollar Rate Advance, to notify the Company of the Eurodollar Rate that would be applicable to an
Advance in the principal amount and with the Interest Period as described by the Company in such request, which
request shall be substantially in the form of Exhibit A-1 hereto
(a “Rate Request”). Upon such request, the Reference
Bank shall furnish such interest rate to the Company no later than noon (New York City time) on the second Business Day before
the proposed Eurodollar Rate Advance by delivering to the Company a copy of the related Rate Request setting forth
such rate and executed by an authorized officer of the Reference Bank
in the space provided therefor (a “Rate Notification”). The
Company and the Designated Borrower shall be entitled to rely on any such notification and such rate shall be conclusive and binding on
the Lenders absent manifest error.




          (b) Notice of Borrowing. Each Borrowing
shall be made on notice by the Company (on its own behalf or on behalf of the Designated Borrower) to the Administrative Agent, which
shall give to each Lender prompt notice thereof by telecopier, given not later than 11:00 A.M. (New York City time) on the date
of the proposed Borrowing if such Borrowing is to be comprised of Base Rate Advances and no earlier than 9:00 A.M. (New York City time) and
no later than 4:00 P.M. (New York City time) on the third Business Day prior to such date if such Borrowing is to be comprised of
Eurodollar Rate Advances. Each such notice of a Borrowing (a “Notice of Borrowing”) shall be by telecopier, or by
telephone confirmed immediately in writing, in substantially the form of Exhibit A-2 hereto, specifying therein: (i) the
name of the Borrower (which shall be the Company or the Designated Borrower), (ii) the requested date of such
Borrowing, (iii) the Type of Advances comprising such Borrowing, (iv) the aggregate amount of such Borrowing, and (v) in the
case of a Borrowing consisting of Eurodollar Rate Advances, the initial Interest Period for each such
Advance. Each Lender shall, before 1:00 P.M. (New York City Time) on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative Agent’s Account in Dollars and in same day funds, such
Lender’s Pro Rata Share of the requested amount of such Borrowing. Promptly after the Administrative Agent’s receipt of such
funds (and in any event by the close of business New York City time on the date of such Borrowing) and upon fulfillment of the applicable
conditions set forth in Article III, the Administrative Agent will make the funds so received available to the Company or the
Designated Borrower, as the case may be, by depositing the same in Dollars and in immediately available funds into such
account of the Company or the Designated Borrower, as applicable, maintained with the Administrative Agent in New York City as shall have
been specified in the related Notice of Borrowing.




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 13 




          (c) Illegality, Etc. Anything in subsection (a) or (b) above to the contrary notwithstanding,





     (i) if any Lender shall, at least one Business Day before the date of any requested Eurodollar Rate Advance or the date of any conversion to or continuation of a Eurodollar Rate Advance, notify the Administrative Agent that the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other governmental authority asserts that it is
unlawful, for such Lender or its Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, the Administrative
Agent shall forthwith give notice thereof to the other Lenders and the Company, whereupon (A) such Lender shall
have no obligation to make Eurodollar Rate Advances, or to convert Advances into Eurodollar Rate Advances, until such
Lender notifies the Company and the Administrative Agent that the circumstances causing such suspension no longer exist
and (B) each Borrower shall be deemed to have converted all Eurodollar Rate Advances of such Lender then outstanding
into Base Rate Advances in accordance with Section 2.04 on and as of the date of the Administrative Agent’s receipt of
such notice, unless and to the extent such notice directs that one or more Eurodollar Rate Advances shall be so converted on the
last day of the applicable Interest Period, provided that (w) before giving any such notice, such Lender agrees to
use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would avoid the need for such suspension
and conversion and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous
to such Lender, (x) any request by a Borrower for Eurodollar Rate Advances during a time when a Lender’s obligation to make, or
convert  Advances into, Eurodollar Rate Advances shall be suspended hereunder shall be deemed to be a request for, or
for conversion into, Base Rate Advances from such Lender, (y) all Advances that would otherwise be made by such
Lender as Eurodollar Rate Advances during any such suspension shall instead be made as Base Rate Advances and (z) in the
event any Lender shall notify the Administrative Agent and the Company of the occurrence of the circumstances causing such suspension
under this Section 2.02(c), all payments and prepayments of principal that would otherwise have been applied to repay the Eurodollar Rate Advances that would have been made by such Lender or the converted Eurodollar Rate Advances shall instead be applied to repay the Base Rate Advances made by such Lender in lieu of, or resulting from the conversion of, such Eurodollar Rate Advances;




     (ii) if the Reference Bank cannot furnish the Eurodollar Rate for any Borrowing consisting of Eurodollar Rate Advances because of conditions existing in the London interbank market, the right of the Borrowers to select Eurodollar Rate Advances shall be suspended until the Reference Bank shall notify the Company and the Lenders that the circumstances causing such suspension no longer exist; and




     (iii) if the Required
Lenders shall, at least one Business Day before the date of any requested Eurodollar Rate Advance, notify the Administrative Agent
that the Eurodollar Rate for any Interest Period will not adequately reflect the cost to the Required Lenders of making, funding or
maintaining their respective Eurodollar Rate



CREDIT AGREEMENT





 









 





14





	 	 	Advances for such Interest Period, the Administrative Agent shall forthwith so notify the
Company and the Lenders, whereupon the Lenders shall have no obligation to make, or convert
Advances into, Eurodollar Rate Advances until the Administrative Agent shall notify the
Company and the Lenders that the circumstances causing such suspension no longer exist.





          (d) Effect of Failure to Fulfill Conditions. Each Notice of Borrowing shall be
irrevocable and binding on the Company and, as applicable, the Designated Borrower. In the case of
any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the relevant Borrower shall indemnify each Lender against any loss, cost or expense
incurred by such Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (excluding anticipated profits), cost or expense reasonably
incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date, such indemnity to be paid promptly upon
receipt by the relevant Borrower of a certificate of such Lender setting forth the calculation of
the amount of the indemnity claimed by such Lender.




          (e) Funds Available. Unless the Administrative Agent shall have received notice from
a Lender prior to the date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s ratable portion of such Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the Administrative Agent on the date of
such Borrowing in accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the relevant Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so made such ratable
portion available to the Administrative Agent, such Lender and the relevant Borrower severally
agree to repay to the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available to the relevant
Borrower until the date such amount is repaid to the Administrative Agent, at (i) in the case of
the relevant Borrower, the interest rate applicable at the time to Advances comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall repay
to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such
Lender’s Advance as part of such Borrowing for purposes of this Agreement.




          (f) Failure to Make Advances. The failure of any Lender to make the Advance to be
made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for
the failure of any other Lender to make the Advance to be made by such other Lender on the date of
any Borrowing.




          SECTION 2.03. Fees. (a) Facility Fee. The Company agrees to pay to the
Administrative Agent for the account of each Lender a facility fee in Dollars on the aggregate
amount of such Lender’s Commitment (whether or not utilized and, after the Termination Date, on the
aggregate outstanding principal amount of the Advances of such Lender, if any) from the date hereof
in the case of each Lender and, in the case of each Person which becomes a Lender pursuant to
Section 8.07, from the
effective date specified in the Assignment and Acceptance




Credit Agreement











 



15



pursuant to which it became a Lender,
until the Termination Date, at the Applicable Facility Fee Rate, payable quarterly in arrears on
the last day of each March, June, September and December during the term hereof and on the
Termination Date. All computations of the facility fee shall be based on a year of 360 days.




          (b) Administrative Agent’s Fees. The Company shall pay to the Administrative Agent
in Dollars for its own account such fees as may from time to time be agreed between the Company and
the Administrative Agent.




          (c) Utilization Fee. Each Borrower shall pay to the Administrative Agent for the pro
rata account of the Lenders a utilization fee on the outstanding principal amount of the Advances
made to it for each day on which the Utilization Ratio exceeds 0.50 and for each day after the
Termination Date regardless of the Utilization Ratio, at a rate per annum equal to the Applicable
Utilization Fee Rate, payable on each day on which a payment of interest is due under Section 2.05.




          SECTION 2.04. Continuation and Conversion. (a) General. Subject to the
other provisions hereof, each Borrower shall have the option (i) to convert all or any part of an
outstanding Borrowing consisting of Base Rate Advances to a Borrowing consisting of Eurodollar Rate
Advances, (ii) to convert all or any part of an outstanding Borrowing consisting of Eurodollar Rate
Advances to a Borrowing consisting of Base Rate Advances, or (iii) to continue all or any part of
an outstanding Borrowing consisting of Eurodollar Rate Advances as a Borrowing consisting of
Eurodollar Rate Advances for an additional Interest Period; provided that no Borrowing
consisting of Eurodollar Rate Advances shall be so converted other than as contemplated by Section
2.02(c) or continued, until the expiration of the Interest Period applicable thereto.




          (b) Notice of Conversion or Continuation. In order to elect to convert or continue a
Borrowing hereunder, the Company (on its own behalf or on behalf of the Designated Borrower) shall
deliver an irrevocable notice thereof (a “Notice of Conversion or Continuation”) to the
Administrative Agent by telecopier or by telephone confirmed immediately in writing, no later than
(i) 11:00 A.M. (New York City time) on the proposed conversion date in the case of a conversion to
Base Rate Advances and (ii) no earlier than 9:00 A.M. (New York City time) and no later than 4:00
P.M. (New York City time) on the third Business Day in advance of the proposed conversion or
continuation date in the case of a conversion to, or a continuation of, Eurodollar Rate Advances,
substantially in the form of Exhibit B hereto. A Notice of Conversion or Continuation shall
specify (w) the requested conversion or continuation date (which shall be a Business Day), (x) the
amount and Type of the Advances to be converted or continued, (y) whether a conversion or
continuation is requested, and (z) in the case of a conversion to, or a continuation of, Eurodollar
Rate Advances, the requested Interest Period. The relevant Eurodollar Rate for such Interest
Period in the case of a conversion to, or a continuation of, Eurodollar Rate Advances shall be
determined in the manner provided in Section 2.02(a) as if such conversion or continuation is
instead new Eurodollar Rate Advances in such amount, on such date and for such Interest Period. If
the Company fails to give a Notice of Conversion or Continuation with respect to an outstanding
Borrowing consisting of Eurodollar Rate Advances in Dollars as provided in clause (ii) above, the
Company shall be deemed to have converted such Eurodollar Rate Advances into Base Rate Advances in
accordance with this


Credit Agreement










 



16



Section 2.04 if such Advances are outstanding after the last day of the Interest Period with
respect thereto.




          SECTION 2.05. Interest on Advances. Each Borrower shall pay interest on the unpaid
principal amount of each Advance owing to each Lender from the date the proceeds of such Advance
are made available to such Borrower until such principal amount shall be paid in full, at the
following rates per annum:





     (a) Base Rate Advances. If such Advance is a Base Rate Advance, a rate per
annum equal to the Base Rate in effect from time to time, payable in arrears quarterly on
the last Business Day of each fiscal quarter during the period such Base Rate Advance
remains outstanding and on the date such Base Rate Advance shall be paid in full;




     (b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance, a
rate per annum equal at all times during the Interest Period for such Advance to the sum of
the Eurodollar Rate for such Interest Period plus the Applicable Eurodollar Margin for such
Advance, payable in arrears on the last day of such Interest Period and, if such Interest
Period has a duration of more than three months, on each day which occurs during such
Interest Period every three months from the first day of such Interest Period; and




     (c) Default Rate. In the event that, and for so long as, any Event of Default
shall have occurred and be continuing, the outstanding principal amount of all Advances and,
to the extent permitted by law, overdue interest in respect of all Advances, shall bear
interest at a rate per annum equal to the sum of two percent (2%) plus the interest rate
otherwise applicable hereunder to such principal amount in effect from time to time. In the
event that, and for so long as, any Default under Section 6.01(a) shall have occurred and be
continuing, the outstanding principal amount of the Advance with respect to which such
Default has occurred and is continuing shall bear interest at a rate per annum equal to the
sum of two percent (2%) plus the interest rate otherwise applicable hereunder to such
principal amount in effect from time to time.



          SECTION 2.06. Additional Interest on Eurodollar Rate Advances. Each Borrower shall
pay to each Lender, during each period as such Lender shall be required under regulations of the
Federal Reserve Board to maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each
Eurodollar Rate Advance of such Lender outstanding during such period, from the later of the date
such reserves are required and the making of such Advance until the earlier of the date such
reserves are no longer required and such principal amount is paid in full, at an interest rate per
annum equal at all times to the remainder obtained by subtracting (i) the Eurodollar Rate for the
Interest Period applicable to such Advance from (ii) the rate obtained by dividing such Eurodollar
Rate by a percentage equal to 100% minus the average Eurocurrency Rate Reserve Percentage of such
Lender during such period, payable on each date on which interest is payable on such Advance. Such
Lender shall determine the amount of such additional interest, if any, and promptly notify the
relevant Borrower through the Administrative Agent of the amount thereof.


Credit Agreement











 



17




          SECTION 2.07. Repayment; Prepayment. (a) Repayment. Each Borrower shall
repay to the Administrative Agent for the ratable account of the Lenders on the Termination Date
the aggregate principal amount of the Advances then outstanding. No Borrower shall have the right
to prepay any principal amount of any Advances other than as provided in this Section 2.07.




          (b) Optional Prepayment. Any Borrower may, upon notice no later than 11:00 A.M. (New
York City time) on the second Business Day before the prepayment of Eurodollar Rate Advances, and
no later than 11:00 A.M. (New York City time) on the day of the prepayment in the case of Base Rate
Advances, in either case to the Administrative Agent and stating the proposed date and principal
amount of the prepayment, and if such notice is given such Borrower shall, prepay the outstanding
principal amount of the Advances comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal amount prepaid;
provided, however, that each partial prepayment shall be in the aggregate principal
amount of at least $5,000,000 or a larger whole multiple of $1,000,000 and, in the case of a
payment or prepayment of a Eurodollar Rate Advance other than on the last day of the Interest
Period for such Advance as provided herein, shall have the consequences set forth in Section
8.04(b).




          (c) Mandatory Prepayment. (1) The Company shall notify the Administrative Agent
immediately upon becoming aware of any Change of Control. Upon receipt of such notice and for a
period of 90 days thereafter, the Required Lenders shall be entitled, by written notice to the
Company received within such period, to terminate the Commitments in whole and require the Company
and the Designated Borrower to prepay all outstanding Advances within five Business Days of its
receipt of such notice, together with any accrued and unpaid interest thereon to the date of such
prepayment and any other amounts due hereunder. Notwithstanding any other provision contained
herein, a Change of Control shall not, in and of itself, constitute a Default hereunder.




          (2) The Company shall (i) on the date of any Debt or Equity Issuance yielding total cash
proceeds in an amount at least equal to $100,000,000 (a “Qualifying Issuance”) and (ii) on
the date of any Debt or Equity Issuance other than a Qualifying Issuance (a “Non-Qualifying
Issuance”) yielding total cash proceeds, taken together with the total cash proceeds of all
prior Non-Qualifying Issuances as to which a prepayment has not yet been made under this paragraph,
in excess of $100,000,000 (such excess amount, the “Excess Proceeds”), prepay and cause the
Designated Borrower to prepay all outstanding Advances in an aggregate principal amount equal to
such total cash proceeds (in the case of the foregoing clause (i)) or such Excess Proceeds (in the
case of the foregoing clause (ii)), net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal fees and expenses
(such net amount, the “Net Amount”), together with any accrued and unpaid interest thereon
to the date of prepayment and any other amounts due hereunder, and, in connection therewith, the
Commitments shall be permanently reduced by an aggregate amount equal to such Net Amount, such
reduction to be applied to the Commitments of the Lenders ratably based on the aggregate amount of
the Commitments of each of the Lenders.




          SECTION 2.08. Increased Costs. (a) Changes in Law, Etc. If, due to (i) the
introduction of or any change in or in the official interpretation of any law or regulation on or
after the date of this Agreement, or (ii) the
compliance with any guideline or request not applicable on the date of this Agreement from any
central bank or other governmental authority


Credit Agreement










 



18



(whether or not having the force of law), there shall
be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Company shall from time to time, promptly upon demand by such
Lender (with a copy of such demand to the Administrative Agent) accompanied by the certificate
described in the next sentence, pay, or cause to be paid, to the Administrative Agent for the
account of such Lender additional amounts sufficient to compensate such Lender for such increased
cost. A certificate as to the amount of such increased cost, submitted to the Company and the
Administrative Agent by such Lender, shall be conclusive and binding on the Borrowers for all
purposes, absent manifest error.




          (b) Capital Adequacy. If, due to (i) the introduction of or any change in or in the
official interpretation of any law or regulation on or after the date of this Agreement, or (ii)
the compliance with any guideline or request not applicable on the date of this Agreement from any
central bank or other governmental authority (whether or not having the force of law), any Lender
determines that the amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender has been or would be affected and that the amount of such
capital is increased by or based upon the existence of such Lender’s Advances or commitment to lend
hereunder and other commitments of this type, then, upon demand by such Lender received by the
Company within such time from the relevant change or introduction described above as is reasonably
required in order to determine the effect thereof (with a copy of such demand to the Administrative
Agent) accompanied by a certificate of such Lender as to the amounts demanded, the Company shall
pay, or cause to be paid, to the Administrative Agent for the account of such Lender, from time to
time as specified by such Lender, additional amounts sufficient to compensate such Lender or such
corporation, as the case may be, to the extent that such Lender reasonably determines such increase
in capital to be allocable to the existence of such Lender’s Advances or commitment to lend
hereunder, such amounts to be due and payable within two days of such Lender’s invoice therefor. A
certificate as to such amounts submitted to the Company and the Administrative Agent by such Lender
shall be conclusive and binding on the Borrowers for all purposes, absent manifest error.




          SECTION 2.09. Payments and Computations. (a) Manner of Payment. Each
Borrower shall make each payment hereunder and under the Notes without deduction, setoff or
counterclaim not later than 11:00 A.M. (New York City time) on the day when due to the
Administrative Agent at the Administrative Agent’s Account in Dollars and in same day funds. The
Administrative Agent will promptly thereafter cause to be distributed like currency and funds
relating to the payment of principal or interest or facility fees ratably (other than amounts
payable pursuant to Section 2.02(d), 2.06, 2.08, 2.10 or 8.04(b)) to the Lenders for the account of
their respective Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in the Register
pursuant to Section 8.07(c), from and after the effective date specified in such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under the Note in
respect of the interest assigned thereby to the Lender assignee thereunder, and the parties to such
Assignment and Acceptance (which shall not include any Borrower) shall make all appropriate
adjustments in such payments for periods prior to such effective date directly between themselves.
The making by any Borrower of any payment
to the Administrative


Credit Agreement











 



19



Agent for the account of any Lender as herein provided shall pro
tanto discharge the relevant obligation of such Borrower to such Lender.




          (b) Setoff. If an Event of Default shall have occurred and be continuing, each
Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) at any time held and other indebtedness at any time owing by such
Lender to any Borrower against any of and all the obligations of such Borrower now or hereafter
existing under this Agreement and the Note held by such Lender, although such obligations may be
unmatured. The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.




          (c) Interest. All computations of interest based on (i) the Base Rate shall be made
by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, and (ii)
the Eurodollar Rate or the Federal Funds Rate and all computations of interest pursuant to Section
2.06 shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day) occurring in the
period for which such interest is payable. Each determination by the Reference Bank of an interest
rate for any Advance hereunder shall be conclusive and binding for all purposes, absent manifest
error.




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




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




          (f) Rate Information. The Reference Bank shall notify the Company and the
Administrative Agent of the Base Rate in effect on the first Business Day on which a Base Rate
Advance is outstanding and each day on which a change in the Base Rate occurs, each in sufficient
detail to enable the Company to calculate interest payments hereunder with respect to Base Rate
Advances, and shall provide such information to any Lender promptly upon its request. The Company
will provide to the Administrative Agent (i) promptly upon receipt thereof copies of the
information received by the Company pursuant to the immediately


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preceding sentence or any Rate Notification received pursuant to Section 2.02(a), (ii) promptly
upon the making of any interest payment with respect to a Base Rate Advance hereunder a schedule
based on such information setting forth the Base Rate for each day in the period in which such
Advance was outstanding, and (iii) promptly upon obtaining knowledge thereof, notice of any change
in the rating assigned by Standard & Poor’s or Moody’s to the Company’s Long-Term Indebtedness and
the date of such change, provided that the Company’s failure to provide any of the
foregoing information shall be deemed not to be a Default or Event of Default hereunder.




          SECTION 2.10. Taxes. (a) General. Any and all payments by each Borrower
hereunder or under the Notes shall be made in accordance with Section 2.09, free and clear of and
without deduction for any and all taxes, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto (which are, with respect to payments by the Company only, not
in effect or not imposed on the date of this Agreement); excluding, in the case of each
Lender and the Administrative Agent, taxes imposed on its income, and franchise taxes imposed on it
by the jurisdiction under the laws of which such Lender or the Administrative Agent (as the case
may be) is organized or any political subdivision thereof and, in the case of each Lender, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction of such Lender’s
Applicable Lending Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as
“Taxes”).




          (b) Other Taxes. In addition, each Borrower agrees to pay any stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which arise from any payment
made hereunder or under the Notes or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement not in effect or not imposed on the date of this Agreement or the
Notes (hereinafter referred to as “Other Taxes”) upon notice from the Lender.




          (c) Tax Indemnity. Each Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.10) paid by such
Lender or the Administrative Agent (as the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days
from the date such Lender or the Administrative Agent (as the case may be) makes written demand
therefor.




          (d) Receipt. Within 30 days after the date of any payment of Taxes, each Borrower
will furnish to the Administrative Agent, at its address referred to in Section 8.02, the original
or a certified copy of a receipt evidencing payment thereof.




          (e) Survival. Without prejudice to the survival of any other agreement of each
Borrower hereunder, the agreements and obligations of such Borrower contained in this Section 2.10
shall survive the payment in full of principal and interest hereunder.




          SECTION 2.11. Promissory Notes. Any Lender may request that Advances of any Type
made by it be evidenced by a promissory note. In such event, the relevant Borrower


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shall prepare,
execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by
such Lender, to such Lender and its registered assigns) substantially in the form of Exhibit E (a
“Note”). Thereafter, such Advances evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 8.07) be represented by one or
more promissory notes in such form payable to the payee named therein (or, if such promissory note
is a registered note, to such payee and its registered assigns).




          SECTION 2.12. Use of Proceeds of Advances. The Company will use, or will cause the
Designated Borrower to use, the proceeds of the Advances solely to finance all or a portion of the
consideration payable in connection with the Acquisition and/or to refinance commercial paper
issued to finance the Acquisition; provided that neither the Lenders nor the Administrative
Agent shall have any obligation in connection with the use by the Company or the Designated
Borrower of any of such proceeds.




          SECTION 2.13. Borrowing by the Designated Borrower. The Company may, at any time or from
time to time, upon not less than 10 Business Day’s notice to the Administrative Agent, designate a
domestic United States Subsidiary established by the Company for the purpose of effecting the
Acquisition and the financing thereof, as the Designated Borrower hereunder in accordance with the
provisions of this Section 2.13. Upon any such designation and the Administrative Agent’s receipt
of each of the following (copies of which will be promptly furnished by the Administrative Agent to
the Lenders), which shall be in form and substance reasonably satisfactory to the Administrative
Agent, such Subsidiary shall be the Designated Borrower entitled to make Borrowings on and subject
to the terms and conditions of this Agreement:





     (i) Executed Counterparts. A designation letter (the “Designation
Letter”) in duplicate, in substantially the form of Exhibit F, duly completed and
executed by the Company and the Designated Borrower and delivered to the Administrative
Agent at least ten Business Days before the date on which such Subsidiary is to become the
Designated Borrower;




     (ii) Opinion of Counsel to the Designated Borrower. A favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the date of the
Designation Letter) of reputable counsel to the Designated Borrower (which may be internal
counsel) in the relevant jurisdiction (and the Designated Borrower hereby and by delivery of
the Designation Letter instruct such counsel to deliver such opinion to the Lenders and the
Administrative Agent), as to the due organization of the Designated Borrower under the laws
of its jurisdiction of organization, the due authorization, execution and delivery by the
Designated Borrower of the Designation Letter and of the making of Borrowings by it
hereunder, the obtaining of all licenses, approvals and consents of, and the making of all
filings and registrations with, any applicable Governmental Authority required in connection
therewith and the legality, validity and binding effect and enforceability thereof, and such
other legal matters relating thereto as the Administrative Agent may reasonably request;




     (iii) Corporate Documents. Such documents and certificates as the
Administrative Agent may reasonably request (including without limitation certified copies
of the charter and by-laws of the Designated Borrower and of resolutions of its


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Board of
Directors authorizing the Designated Borrower’s acceptance of the Company’s designation as
the “Designated Borrower” and its becoming a Borrower under this Agreement, and of all
documents evidencing all other necessary corporate or other action required with respect to
the Designated Borrower becoming party to this Agreement;




     (iv) Process Agent. Evidence that the Process Agent has agreed to act as
agent for service of process in New York, New York on behalf of the Designated Borrower
under the Loan Documents;




     (v) Expenses. Evidence that the Designated Borrower or the Company shall have
paid any and all expenses reasonably incurred by the Administrative Agent (including the
reasonable fees and expenses of counsel to the Administrative Agent) in connection with its
designation as the Designated Borrower; and




     (vi) Other Items. Such other documents relating thereto as the Administrative
Agent or any Lender or special New York counsel to the Administrative Agent may reasonably
request, including any documentation and other evidence which may be requested by the
Administrative Agent or any Lender to comply with and/or administer any “know your customer”
or other customer identification related policies and procedures required under applicable
laws and regulations.



ARTICLE III




CONDITIONS TO EFFECTIVENESS AND LENDING




          SECTION 3.01. Condition Precedent to Effectiveness. The obligations of the
Lenders under Section 2.01 shall become effective on the date (the “Effective Date”), on or
before February 28, 2007, as of which the Administrative Agent shall confirm to the Company that it
has received the following, each dated such day, in form and substance satisfactory to the
Administrative Agent and (except for any Notes) in sufficient copies for each Lender:





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




     (b) Authority and Approvals. Certified copies of the resolutions of the Board
of Directors of the Company (or equivalent documents) authorizing and approving this
Agreement, authorizing Borrowings by the Company hereunder in an aggregate principal amount
up to but not exceeding the aggregate amount of the Commitments at any one time outstanding
and certified copies of all documents evidencing all necessary corporate action and all
other necessary action (corporate, partnership or otherwise) and governmental approvals, if
any, with respect to this Agreement;




     (c) Secretary’s or Assistant Secretary’s Certificate. A certificate of the
Secretary or an Assistant Secretary of the Company, dated the Effective Date, certifying the
names


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and true signatures of the officers of the Company authorized to execute and deliver
this Agreement, the Notes, and the other documents to be delivered hereunder;




     (d) Legal Opinions. An opinion of counsel to the Company, dated the Effective
Date, substantially in the form of Exhibit C-1 hereto and an opinion of special New York
counsel to the Administrative Agent, dated the Effective Date, substantially in the form of
Exhibit C-2 hereto;




     (e) Acquisition Agreement. A certified copy of the Acquisition Agreement;




     (f) Closing Certificate. A certificate of a senior financial officer of the
Company, dated the Effective Date, certifying that the representations and warranties set
forth in Article IV are true on such date as if made on and as of such date and that no
Default has occurred and is continuing on such date; and




     (g) Fees and Expenses. Evidence satisfactory to the Administrative Agent that
the Company shall have paid to the Administrative Agent for account of the Lenders such
up-front fees in connection with the execution of this Agreement as the Company and the
Administrative Agent shall have agreed upon.



          SECTION 3.02. Conditions Precedent to Each Advance. The obligation of each Lender to
make each Advance (including the initial Advance) as part of a Borrowing shall be subject to the
further conditions precedent that (i) on the date of such Borrowing the following statements shall
be true (and each of the giving of the applicable Notice of Borrowing and the acceptance by the
relevant Borrower of the proceeds of such Advance shall constitute a representation and warranty by
such Borrower that on the date of such Advance the following statements shall be true): (x) the
representations and warranties contained in Section 4.01 (other than the Excluded Representation)
and, to the extent applicable, in the Designation Letter are correct in all material respects on
and as of the date of such Borrowing, before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date, and (y) no event has
occurred and is continuing, or would result from such Borrowing or from the application of the
proceeds therefrom, that would constitute an Event of Default, or would constitute an Event of
Default but for the requirement that notice be given or time elapse or both; (ii) in the case of a
requested Borrowing the proceeds of which are to be used to buy or carry any Margin Stock, the
Company shall deliver to the Administrative Agent a certificate of a senior financial officer of
the Company accompanying the relevant Notice of Borrowing setting forth in reasonable detail the
basis upon which the Company has made the representation set forth in the third sentence of Section
4.01(l) on and as of the date of such Borrowing, before and after giving effect to such Borrowing
and to the application of the proceeds therefrom, together with (if so requested by the
Administrative Agent) a duly completed Form U-1 satisfactory to the Administrative Agent; and (iii)
in the case of the initial Borrowing only, evidence that all applicable waiting periods have
expired and that the Acquisition is being consummated substantially in accordance with the terms of
the Acquisition Agreement as delivered pursuant to Section 3.01(e).


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ARTICLE IV




REPRESENTATIONS AND WARRANTIES




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





     (a) Corporate Existence. The Company is a corporation duly organized and
validly existing under the laws of the State of Connecticut.




     (b) Corporate Authorization, Etc. The execution, delivery and performance by
the Company of this Agreement and the Notes are within the Company’s corporate powers, have
been duly authorized by all necessary corporate action and do not contravene (i) the
Company’s charter or bylaws or (ii) any law or contractual restriction binding on or
affecting the Company or any of its Subsidiaries.




     (c) No Approvals. No authorization, approval or action by, and no notice to
or filing with, any governmental authority or regulatory body is required for the due
execution, delivery and performance by the Company of this Agreement or the Notes.




     (d) Enforceability. This Agreement is and, upon issuance and delivery thereof
in accordance with this Agreement, each Note will be the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with their
respective terms.




     (e) Financial Information. The consolidated balance sheet of the Company and
its Consolidated Subsidiaries as of December 31, 2005 and the related statements of income
and retained earnings of the Company and its Consolidated Subsidiaries for the fiscal year
then ended, copies of which have been furnished to the Lenders, fairly present in all
material respects the financial condition of the Company and its Consolidated Subsidiaries
as of such date and the results of the operations of the Company and its Consolidated
Subsidiaries for the period ended on such date, all in accordance with GAAP consistently
applied.




     (f) No Litigation. Except as disclosed or otherwise reflected in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2005, as updated by the
Company’s Form 10-Q for the period ending September 30, 2006, there is no pending or (to the
best of the Company’s knowledge) threatened action or proceeding against the Company or any
of its Subsidiaries or relating to any of their respective properties before any court,
governmental agency or arbitrator, which could reasonably be expected to have a Material
Adverse Effect or which purports to affect the legality, validity or enforceability of this
Agreement or any Note.




     (g) No Material Adverse Effect. Since December 31, 2005, there has been no
event, act or condition which has had a Material Adverse Effect.




     (h) Environmental Matters. Except as disclosed or otherwise reflected in the
Company’s Annual Report on Form 10-K for the year ended December 31, 2005, as


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updated by the
Company’s Form 10-Q for the period ending September 30, 2006, neither the Company nor any of
its Subsidiaries has received notice or otherwise obtained knowledge of any claim, demand,
action, event, condition, report or investigation indicating or concerning any potential or
actual liability which could reasonably be expected to, individually or in the aggregate,
have a Material Adverse Effect arising in connection with (i) any non-compliance with or
violation of the requirements of any applicable federal, state or local environmental health
or safety statutes or regulations, or (ii) the release or threatened release of any toxic or
hazardous waste, substance or constituent into the environment.




     (i) Investment Company. The Company is not an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.




     (j) Disclosure. The information furnished in writing by or on behalf of the
Company to the Lenders in connection with the negotiation, execution and delivery of this
Agreement or any other Loan Document does not contain any material misstatements of fact or
omit to state a material fact necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading.




     (k) No Defaults. The Company (i) is not in default under or with respect to
this Agreement or any Note, and (ii) is not in default under or with respect to any other
agreement, instrument or undertaking to which it is a party or by which it or any of its
property is bound in any respect which could reasonably be expected to result in a Material
Adverse Effect.




     (l) Use of Proceeds, Etc. All proceeds of each Advance will be used by the
Borrower thereof only in accordance with the provisions of Section 2.12. The Company is not
and will not be engaged in the business of extending credit for the purpose of buying or
carrying Margin Stock and no proceeds of any Advance will be used to extend credit to others
for the purpose of buying or carrying any Margin Stock. Neither the making of any Advance
nor the use of the proceeds thereof will violate or be inconsistent with the provisions of
Regulations U or X issued by the Board of Governors of the Federal Reserve System.



ARTICLE V




COVENANTS OF THE BORROWER




          SECTION 5.01. Affirmative Covenants. So long as any Advance or any other amount
owing hereunder shall remain unpaid or any Lender shall have any Commitment hereunder:





     (a) Financial Information. The Company will furnish to the Lenders:




     (i) Quarterly Financial Statements. Within 50 days after the close of each
quarterly accounting period in each fiscal year of the Company, the consolidated balance
sheet of the Company and its Consolidated Subsidiaries as at the end of such quarterly


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period and the related consolidated and consolidating statements of income, retained
earnings and cash flows for such quarterly period and for the elapsed portion of the fiscal
year ended with the last day of such quarterly period, in each case setting forth
comparative figures for the related periods in the prior fiscal year.




     (ii) Annual Financial Statements. Within 95 days after the close of each
fiscal year of the Company, the consolidated balance sheet of the Company and its
Consolidated Subsidiaries as at the end of such fiscal year and the related consolidated
statement of income, retained earnings and cash flows for such fiscal year, setting forth
comparative figures for the preceding fiscal year and reported on without qualification by
independent certified public accountants of recognized national standing, in each case
together with a report of such accounting firm stating that in the course of its regular
audit of the consolidated financial statements of the Company, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm has obtained no
knowledge of any Default or Event of Default relating to accounting matters (including,
without limitation, in respect of Section 5.01(f)), or if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof.




     (iii) Officer’s Certificates. At the time of the delivery of the financial
statements under clauses (i) and (ii) above, a certificate of a senior financial officer of
the Company which certifies (x) that such financial statements fairly present the financial
condition and the results of operations of the Company and its Consolidated Subsidiaries on
the dates and for the periods indicated, and (y) that such officer has reviewed the terms of
this Agreement and has made, or caused to be made under his or her supervision, a review in
reasonable detail of the business and condition of the Company and its Consolidated
Subsidiaries during the accounting period covered by such financial statements, and that as
a result of such review such officer has concluded that no Default or Event of Default has
occurred during the period commencing at the beginning of the accounting period covered by
the financial statements accompanied by such certificate and ending on the date of such
certificate or, if any Default or Event of Default has occurred, specifying the nature and
extent thereof and, if continuing, the action the Company proposes to take in respect
thereof. Such certificate shall set forth the calculations required to establish whether
the Company was in compliance with the provisions of Section 5.01(f) for the twelve-month
period ending as at the end of the accounting period covered by the financial statements
accompanied by such certificate.




     (iv) Notice of Default or Litigation. Promptly after any Borrower obtains
knowledge thereof, notice of (i) the occurrence of any Default or Event of Default, or (ii)
any litigation or governmental proceeding pending or threatened against any Borrower or
other event, act or condition which could reasonably be expected to result in a Material
Adverse Effect.




     (v) SEC Filings. Promptly upon transmission thereof, copies of all regular
and periodic financial information, proxy materials and other information and reports, if
any,
which the Company shall file with the Securities and Exchange Commission or any governmental
agencies substituted therefor or which the Company shall send to its stockholders.


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     (vi) Other Information. From time to time, and as soon as reasonably
practicable, such other information or documents (financial or otherwise) as any Lender
through the Administrative Agent may from time to time reasonably request.


Reports and financial statements required to be delivered by the Company pursuant clauses (i), (ii)
and (v) of this Section 5.01 (a) shall be deemed to have been delivered on the date on which it
posts such reports, or reports containing such financial statements, on its website on the Internet
at www.stanleyworks.com, or when such reports, or reports containing such financial
statements are posted on the website of the Securities and Exchange Commission at www.sec.gov;
provided that it shall deliver such paper copies of the reports and financial statements referred
to in Clauses (i), (ii) and (v) of this Section 5.01(a) to the Administrative Agent or any Lender
who request it to deliver such paper copies until written notice to cease delivering paper copies
is given by the Administrative Agent or such Lender.




          (b) Compliance with Law. The Company shall, and shall cause each of its Subsidiaries
to, comply with all applicable laws, rules, statutes, regulations, decrees and orders of all
governmental bodies, domestic or foreign, in respect of the conduct of their business and the
ownership of their property, except such non-compliance as could not reasonably be expected to
result in a Material Adverse Effect at the time of such noncompliance or in the foreseeable future.




          (c) Payment of Taxes. The Company shall pay or cause to be paid, and shall cause
each of its Subsidiaries to pay or cause to be paid, when due, all taxes, charges and assessments
and all other lawful claims required to be paid by the Company or such Subsidiaries, except (x) as
contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves
have been established with respect thereto in accordance with GAAP and (y) where such nonpayment
could not reasonably be expected to result in a Material Adverse Effect.




          (d) Preservation of Corporate Existence. The Company shall, and shall cause each of
its Subsidiaries to, do all things necessary to preserve, renew and keep in full force and effect
its corporate existence and the licenses, permits, rights and franchises necessary to the proper
conduct of its business, except where the failure to do so could not reasonably be expected to have
a Material Adverse Effect. Neither the Company nor any of its Subsidiaries will engage in any
business if, as a result, the general nature of the business, taken on a consolidated basis, which
would then be engaged in by the Company and its Subsidiaries would be substantially changed from
the general nature of the business engaged in by the Company and its Subsidiaries on the date of
this Agreement.




          (e) Maintenance of Books and Records. The Company will maintain financial records in
accordance with GAAP, consistently applied. The representatives of the Administrative Agent or any
of the Lenders shall have the right to visit and inspect any of the properties of the Company and
of any of its Subsidiaries, to examine their books of account and records and take notes and make
transcripts therefrom, and to discuss their affairs, finances and accounts with, and be advised as
to the same by, their officers upon reasonable prior notice at
such reasonable times and intervals as may be requested (subject to the standard policies of the
Company and its Subsidiaries as to access, safety and, without prejudice to the reasonable
requirements of lending institutions and their regulatory supervisors, confidentiality).


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          (f) Interest Coverage Ratio. The Company shall maintain, for each period of four
consecutive fiscal quarters of the Company, an Interest Coverage Ratio of not less than 5.00 to
1.00.




          SECTION 5.02. Negative Covenants. So long as any Advance or any other amount owing
hereunder shall remain unpaid or any Lender shall have any Commitment hereunder:




          (a) No Liens. The Company shall not, and shall not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist, directly or indirectly, any Lien on any Principal
Property now owned or hereafter acquired (unless the Company secures the Advances made hereunder
equally and ratably with such Lien), other than:





     (i) Liens existing and disclosed to the Lenders in writing prior to the date hereof;




     (ii) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which adequate reserves are
being maintained in accordance with GAAP;




     (iii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate bonds have been posted;




     (iv) Liens incurred or deposits made in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);




     (v) easements, rights-of-way, zoning and similar restrictions and other similar
charges or encumbrances not interfering with the ordinary conduct of the business of the
Company or any of its Subsidiaries and which do not detract materially from the value of the
property to which they attach or impair materially the use thereof by the Company or any of
its Subsidiaries;




     (vi) Liens on property of any Person existing at the time such Person becomes a
Subsidiary of the Company and not created in contemplation thereof;




     (vii) Liens securing Indebtedness owed by a Subsidiary of the Company to the Company
or another Subsidiary of the Company;




     (viii) any Lien arising solely by operation of law in the ordinary course of business
or which is contained in a contract for the purchase or sale of goods or services entered
into in the ordinary course of business;


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     (ix) Liens on any property existing at the time of acquisition but only if the amount
of outstanding Indebtedness secured thereby does not exceed the lesser of the fair market
value or the purchase price of the property as purchased;




     (x) any Lien securing the purchase price of revenues or assets purchased after the
date hereof or the cost of repairing or altering, constructing, developing or substantially
improving all or any part of such revenues or assets; provided that such Lien
attaches only to such revenues or assets (including any improvements) and the Indebtedness
thereby secured does not exceed the lesser of the fair market value or the purchase price of
the revenues or assets (including any improvements) as purchased;




     (xi) any other Liens on Principal Properties securing Indebtedness which in the
aggregate does not exceed 10% of Consolidated Net Tangible Assets at any time outstanding;
and




     (xii) any extension, renewal or replacement of any of the Liens referred to above;
provided that the Indebtedness secured by any such extension, renewal or replacement
does not exceed the sum of the principal amount of the Indebtedness originally secured
thereby and any fee incurred in connection with such transaction.



          (b) Merger, Etc. The Company shall not (i) enter into any merger or consolidation,
or liquidate, wind up or dissolve (or suffer any liquidation, wind-up or dissolution), discontinue
its business or convey, lease, sell, transfer or otherwise dispose of, in one transaction or series
of transactions, all or substantially all of its business or property, whether now or hereafter
acquired, or (ii) permit any of its Subsidiaries to do so, if such action could reasonably be
expected to have a Material Adverse Effect, except that any wholly-owned Subsidiary of the Company
may merge into or convey, sell, lease or transfer all or substantially all of its assets to, the
Company or any other wholly-owned Subsidiary of the Company and the Company or any of its
Subsidiaries may enter into any merger or consolidation so long as in the case of a transaction
involving the Company, the Company, or in the case of any other transaction, a Subsidiary of the
Company, is the surviving entity in such transaction and, after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing.




          (c) Sale-Leasebacks. The Company shall not, and shall not permit any of its
Subsidiaries to, become liable, directly or indirectly, with respect to any lease, whether an
operating lease or a Capital Lease, of any property (whether real or personal or mixed) whether now
owned or hereafter acquired (except for property the aggregate value of which at the time such
lease is entered into is less than 10% of Consolidated Net Tangible Assets), (i) which the Company
or such Subsidiary has sold or transferred or is to sell or transfer to any other Person, or (ii)
which the Company or such Subsidiary intends to use for substantially the same purposes as any
other property which has been or is to be sold or transferred by the Company or such Subsidiary to
any other Person in connection with such lease.


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ARTICLE VI




EVENTS OF DEFAULT




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





     (a) The Company or the Designated Borrower shall fail to pay when due (or, if any such
failure is due solely to technical or administrative difficulties relating to the transfer
of such amounts, within two Business Days after its due date) any principal of any Advance;
or the Company or the Designated Borrower shall fail to pay when due any interest on any
Advance, any fee (other than the fees referenced in Section 2.03) or any other amount
payable by it hereunder or under any Note and five (5) days shall have elapsed from the date
such interest, fees or other amounts were due; or with respect to the fees payable pursuant
to Section 2.03, the Company shall fail to pay any such fee when due and two Business Days
shall have elapsed from the Company’s receipt of notice of such nonpayment from the
Administrative Agent or any Lender; or




     (b) Any representation or warranty made by the Company or the Designated Borrower
herein or pursuant to this Agreement or any other Loan Document (including without
limitation in any certificate of the Company or the Designated Borrower delivered pursuant
hereto) shall prove to have been incorrect in any material respect when made or deemed made;
or




     (c) The Company or the Designated Borrower, as applicable, shall fail to perform any
term, covenant or agreement contained in the first sentence of Section 2.07(c), Section
5.01(a)(iv), 5.01(f) or 5.02 on its part to be performed or observed; or




     (d) The Company or the Designated Borrower shall fail to perform any term, covenant or
agreement contained in this Agreement (except those described in clauses (a) and (c) above)
and such failure shall continue for 30 days; or




     (e) A court having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Company or the Designated Borrower or any Principal Subsidiary in
an involuntary case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or other similar official of the Company or the Designated Borrower or such
Principal Subsidiary or for any substantial part of its property, or ordering the winding up
or liquidation of its affairs and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or




     (f) The Company or the Designated Borrower or any Principal Subsidiary shall commence
a voluntary case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entry of any order for relief in an involuntary
case under any such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, sequestrator or other similar official of the
Company or the Designated Borrower or such Principal Subsidiary or for any substantial part
of its property, or shall make any general assignment for the benefit


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31



of creditors, or shall fail generally to pay its debts as they become due, or shall take any
corporate action in furtherance of any of the foregoing; or




     (g) (A) The Company or the Designated Borrower or any Principal Subsidiary shall fail
to make any payment in respect of Indebtedness when due (whether by scheduled maturity,
required prepayment, acceleration or otherwise) if the aggregate amount of such payment is
$25,000,000 or more, or (B) any breach, default or event of default shall occur and be
continuing (and applicable grace and notice periods shall have expired) under any agreement
or indenture relating to any Indebtedness of the Company or the Designated Borrower or such
Principal Subsidiary in an aggregate amount of $25,000,000 or more, and, except in the case
of financial covenant defaults, the maturity of any such Indebtedness has been accelerated
in accordance with the terms thereof; or




     (h) (A) Any Termination Event shall occur, or (B) any Plan shall incur an “accumulated
funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether
or not waived, or (C) the Company or any member of its ERISA Controlled Group shall fail to
pay when due an amount which it shall have become liable to pay to the PBGC, any Plan or a
trust established under Title IV of ERISA, or (D) a condition shall exist by reason of which
the PBGC would be entitled to obtain a decree adjudicating that an ERISA Plan must be
terminated or have a trustee appointed to administer any ERISA Plan, or (E) the Company or a
member of its ERISA Controlled Group suffers a partial or complete withdrawal from a
Multiemployer Plan or is in “default” (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan, or (F) a proceeding shall be instituted against
the Company or any member of its ERISA Controlled Group to enforce Section 515 of ERISA, or
(G) any other event or condition shall occur or exist with respect to any Plan, if such
events, transactions or conditions set forth in clauses (A) through (G) above could singly
or in the aggregate be reasonably expected to have a Material Adverse Effect; or




     (i) If there shall remain in force, undischarged, unsatisfied and unstayed, for more
than 30 days, whether or not consecutive, any final judgment against the Company or the
Designated Borrower or any Principal Subsidiary which, when added to any other outstanding
final judgments which remain undischarged, unsatisfied and unstayed for more than 30 days
against the Company or the Designated Borrower or any such Principal Subsidiary, exceeds
$25,000,000;


then, and in any such event, the Administrative Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Company, declare the obligation of each Lender
to make Advances to be terminated, whereupon the same shall forthwith terminate, and (ii) shall at
the request, or may with the consent, of the Required Lenders, by notice to the Company, declare
all Advances, the Notes, all interest thereon and all other amounts payable under this Agreement to
be forthwith due and payable, whereupon all Advances, the Notes, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the Company and the
Designated Borrower; provided, however, that in the case of any of the Events of
Default specified in clauses (e) or (f) above with respect to the Company or the Designated
Borrower, (A) the obligation of each Lender to make Advances shall automatically be terminated and
(B) the Advances, the Notes, all such interest and all such



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32


amounts shall automatically become and be due and payable, without presentment, demand, protest or
any notice of any kind, all of which are hereby expressly waived by the Company and the Designated
Borrower.




ARTICLE VII




THE ADMINISTRATIVE AGENT




          SECTION 7.01. Authorization and Action. Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such
powers and discretion under this Agreement as are delegated to the Administrative Agent by the
terms hereof, together with such powers and discretion as are reasonably incidental thereto. As to
any matters not expressly provided for by this Agreement (including, without limitation,
enforcement or collection of the Notes), the Administrative Agent shall not be required to exercise
any discretion or take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the instructions of the
Required Lenders, and such instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take any
action that exposes the Administrative Agent to personal liability or that is contrary to this
Agreement or applicable law. The Administrative Agent agrees to give to each Lender prompt notice
of each notice given to it by the Company pursuant to the terms of this Agreement.




          SECTION 7.02. Administrative Agent’s Reliance, Etc. Neither the Administrative Agent
nor any of its directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement, except for its or
their own gross negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent: (i) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Acceptance entered into by
the Lender that is the payee of such Note, as assignor, and an assignee, as provided in Section
8.07; (ii) may consult with legal counsel (including counsel for any Borrower), independent public
accountants and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants
or experts; (iii) makes no warranty or representation to any Lender and shall not be responsible to
any Lender for any statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of this Agreement on the
part of any Borrower or to inspect the property (including the books and records) of any Borrower;
(v) shall not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or
document furnished pursuant hereto; (vi) shall incur no liability under or in respect of this
Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may
be by telecopier) believed by it to be genuine and signed or sent by the proper party or parties;
and (vii) shall be deemed not to have knowledge of any Default (other than a failure to pay any
principal or interest on the due date therefor) unless and until written notice thereof is given to
the Administrative Agent by the Company or a Lender.


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33




          SECTION 7.03. Citibank and Affiliates. With respect to its Commitment, the Advances
made by it and the Note issued to it, Citibank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not the Administrative
Agent; and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated, include
Citibank in its individual capacity. Citibank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, a Borrower, any of its Subsidiaries and any Person
who may do business with or own securities of such Borrower or any such Subsidiary, all as if
Citibank were not the Administrative Agent and without any duty to account therefor to the Lenders.




          SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other Lender and based on
the financial statements referred to in Section 4.01 and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.




          SECTION 7.05. Indemnification. The Lenders agree to indemnify the Administrative
Agent (to the extent not reimbursed by the Company), ratably according to the respective principal
amounts of their Commitments, as then or most recently in effect, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Administrative Agent in any way relating to or arising out of this Agreement and the
Notes, or any action taken or omitted by the Administrative Agent under this Agreement and the
Notes, provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from the Administrative Agent’s gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) 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, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Company.




          SECTION 7.06. Successor Administrative Agent. The Administrative Agent may resign at
any time by giving written notice thereof to the Lenders and the Company and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Administrative Agent, which shall be
(i) a Lender or (ii) if no Lender shall accept appointment as the Administrative Agent within 30
days after such resignation or removal, any other Person, which Person, so long as no Default shall
have occurred and be continuing, shall be reasonably acceptable to the Company. If no successor
Administrative
Agent shall have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the


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34



retiring Administrative Agent’s giving of notice of
resignation or the Required Lenders’ removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative
Agent, which shall be (i) a Lender or (ii) any other Person, which Person, so long as no Default
shall have occurred and be continuing, shall be reasonably acceptable to the Company. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all
the rights, powers, discretion, privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Administrative Agent’s resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII 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.




ARTICLE VIII




MISCELLANEOUS




          SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, nor consent to any departure by the Company or the Designated
Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed
by the Company and (if applicable) the Designated Borrower and the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given; provided that the written consent of the Company and all the Lenders shall be
required in order to amend or waive any provision of the Agreement or the Notes which would have
the effect of (a) a reduction in principal, interest or fees payable to the Lenders under this
Agreement or the Notes, (b) the postponement of any date fixed for the payment of any principal,
interest or fees under this Agreement or the Notes, (c) an increase in the Commitments, (d)
amending or waiving compliance with Section 2.09, Section 8.05 or this Section 8.01, (e) amending
the definition of Required Lenders or (f) any release or modification of the Company’s guarantee
under Article IX; and provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Administrative Agent under this
Agreement, and provided, further, that the Commitment of any Lender shall not be
extended without the prior written consent of such Lender.




          SECTION 8.02. Notices, etc. (a) Subject to clauses (b) through (f) of this Section
8.02, all notices and other communications provided for hereunder shall be in writing (including
telecopier communication) and mailed, telecopied or delivered, if to the Company or the Designated
Borrower, at the Company’s address at 1000 Stanley Drive, New Britain, Connecticut 06053,
Attention: Secretary, telecopy no. 860-827-3911, with a copy to Craig A. Douglas, Treasurer, at
the same address and telecopy no. 860-827-3886; if to any Initial Lender, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; if to any other Lender, at its Domestic
Lending Office specified in the Assignment and Acceptance or accession agreement pursuant to which
it became a Lender; and if to the Administrative Agent, at its address at 2 Penns Way, Suite 200,
New Castle, Delaware 19720, Attention: Bank Loans Syndication, telecopy no. 302-894-6120; or,
as to the Company, the Designated Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written


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35



notice to the Company and the Administrative Agent.
All notices and other communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt. Delivery by telecopier
of an executed counterpart of any amendment or waiver of any provision of this Agreement or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.




          (b) The Company (on behalf of itself and on behalf of the Designated Borrower) hereby agrees
that it will provide to the Administrative Agent all information, documents and other materials
that it is obligated to furnish to the Administrative Agent pursuant to this Agreement, including,
without limitation, all notices, requests, financial statements, financial and other reports,
certificates and other information materials, but excluding any such communication that (i) relates
to a request for a new, or a conversion of an existing, Borrowing (including any election of an
interest rate or Interest Period relating thereto), (ii) relates to the payment of any principal or
other amount due under this Agreement prior to the scheduled date therefor, (iii) provides notice
of any Default or Event of Default under this Agreement, (iv) relates to a reduction or termination
of the Commitments, or (v) is required to be delivered to satisfy any condition precedent to the
effectiveness of this Agreement and/or any Borrowing thereunder (all such non-excluded
communications being referred to herein collectively as “Communications”), by transmitting
the Communications in an electronic/soft medium in a format acceptable to the Administrative Agent
to oploanswebadmin@citigroup.com. In addition, the Company (on behalf of itself and on behalf of
the Designated Borrower) agrees to continue to provide the Communications to the Administrative
Agent in the manner specified in this Agreement but only to the extent requested by the
Administrative Agent.




          (c) The Company further agrees that the Administrative Agent may make the Communications
available to the Lenders by posting the Communications on Intralinks or a substantially similar
electronic transmission system (the “Platform”).




          (d) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW)
DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM
AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS
AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR
REPRESENTATIVES (COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO THE BORROWER, ANY LENDER OR
ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT,
CONTRACT OR OTHERWISE) ARISING OUT OF THE
BORROWER’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET,
EXCEPT TO THE EXTENT THE


Credit Agreement










 



36



LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT
BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.




          (e) The Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its e-mail address set forth above shall constitute effective delivery of
the Communications to the Administrative Agent for purposes of this Agreement. Each Lender agrees
that notice to it (as provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications to such Lender for
purposes of this Agreement. Each Lender agrees (i) to notify the Administrative Agent in writing
(including by electronic communication) from time to time of such Lender’s e-mail address to which
the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may
be sent to such e-mail address.




          (f) Nothing herein shall prejudice the right of the Administrative Agent or any Lender to give
any notice or other communication pursuant to this Agreement in any other manner specified herein.




          SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or the
Administrative Agent to exercise, and no delay in exercising, any right hereunder or under any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by law.




          SECTION 8.04. Costs and Expenses; Breakage Indemnification. (a) The Company agrees
to pay on demand all reasonable costs and expenses, if any (including, without limitation,
reasonable counsel fees and expenses), of (i) the Administrative Agent in connection with the
negotiation, syndication, execution and delivery of this Agreement, the other Loan Documents and
the other documents delivered hereunder and (ii) the Administrative Agent and each Lender in
connection with enforcement (whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Notes and the other documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the enforcement of rights under
this Section 8.04(a).




          (b) If any payment, prepayment or conversion of any Eurodollar Rate Advance is made by the
Company or the Designated Borrower to or for the account of a Lender other than on the last day of
the Interest Period for such Advance, as a result of acceleration of the maturity of the Advances
and the Notes pursuant to Section 6.01 or by reason of mandatory prepayment under Section 2.07(c)
or for any other reason other than in connection with Section 2.02(c), such Borrower shall, upon
demand by such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender any amounts required to compensate such Lender
for any additional losses, costs or expenses which it may reasonably incur as a result of such
payment, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain such Advance.


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37




          (c) The Company agrees to indemnify and hold harmless the Administrative Agent and each
Lender and each of their affiliates and their officers, directors, employees, agents and advisors
(each, an “Indemnified Party”) from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel)
that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of, or in connection with the preparation for a defense
of, any investigation, litigation or proceeding arising out of, related to or in connection with
the actual or proposed use of the proceeds of the Advances, including in connection with the
Acquisition, whether or not such investigation, litigation or proceeding is brought by the Company,
its directors, shareholders or creditors or an Indemnified Party or any other Person or any
Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated, except to the extent such claim, damage, loss, liability or expense is
found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct. The Company agrees not to
assert any claim against any Indemnified Party on any theory of liability, for consequential,
indirect, special or punitive damages arising out of or otherwise relating to this Agreement or any
of the transactions contemplated hereby or the actual or proposed use of the proceeds of the
Advances.




          SECTION 8.05. Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) on
account of the Advances owing to it (other than pursuant to Section 2.02(d), 2.06, 2.08, 2.10 or
8.04(b)) in excess of its ratable share of payments on account of the Advances obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender, such purchase from each
Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price
to the extent of such recovery together with an amount equal to such Lender’s ratable share
(according to the proportion of (i) the amount of such Lender’s required repayment to (ii) the
total amount so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered. The Company agrees
that any Lender so purchasing a participation from another Lender pursuant to this Section 8.05
may, to the fullest extent permitted by law, exercise all its rights of payment (including the
right of setoff) with respect to such participation as fully as if such Lender were the direct
creditor of the Company in the amount of such participation.




          SECTION 8.06. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company, the Designated Borrower, the Administrative Agent and the Lenders and their
respective successors and assigns, except that the Company shall not have the right to assign its
rights or obligations hereunder or under any Note or any interest herein or therein (other than as
permitted by Section 5.02(b)) without the prior written consent of the Lenders.




          SECTION 8.07. Assignments and Participations.
(a) Each Lender may assign to one or more Persons all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a portion of its
Commitment, and the Advances owing to it and the Note held by it); provided,
however, that (i) each such assignment (other than assignment


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38



to an affiliate of such
Lender) shall require the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed, and which consent of the Company shall not be required if an
Event of Default exists, (ii) each such assignment shall be of a constant, and not a varying,
percentage of all rights and obligations under this Agreement, (iii) except in the case of an
assignment to a Person that, immediately prior to such assignment, was a Lender or an assignment of
all of a Lender’s rights and obligations under this Agreement, the amount of the Commitment of the
assigning Lender being assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, and (iv) the parties to each
such assignment shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance (which shall include the agreement of the
assignee party to such assignment, for the benefit of the Borrowers, to be bound by the terms and
provisions of this Agreement to the same extent as if it were an original party hereto), together
with any Note subject to such assignment and the assignor or assignee shall pay to the
Administrative Agent a processing and recordation fee of $3,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a
party hereto).




          (b) By executing and delivering an Assignment and Acceptance, the Lender assignor thereunder
and the assignee thereunder confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any
other instrument or document furnished pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
any Borrower or the performance or observance by any Borrower of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in taking or not
taking action under this Agreement; (v) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers and discretion under
this Agreement as
are delegated to the Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vi) such assignee agrees that it will perform
in accordance with their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender.


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39




          (c) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an
assignee, together with any Note subject to such assignment, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the form of Exhibit D
hereto, (i) accept such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Company. In the case of any Lender that
holds a Note, within five Business Days after its receipt of such notice, the relevant Borrower, at
its own expense, shall execute and deliver to the Administrative Agent in simultaneous exchange for
the surrendered Note a new Note to the order of such assignee in an amount equal to the Commitment
assumed by it pursuant to such Assignment and Acceptance and, if the assigning Lender has retained
a Commitment hereunder, a new Note to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Note, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form of Exhibit E. Such
Assignment and Acceptance shall be deemed to amend this Agreement to the extent, and only to the
extent, necessary to reflect the addition of such Person as a Lender and the resulting adjustment
of the Commitments, if any, arising from such assignment of Commitments to such Person.




          (d) The Administrative Agent, acting solely for this purpose as an agent of the Borrowers,
shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing to, each Lender from
time to time (the “Register”). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrowers, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by the Company or any
Lender at any reasonable time and from time to time upon reasonable prior notice.




          (e) Each Lender may sell participations to one or more banks or other financial institutions,
or other entities engaged in making, purchasing, holding or otherwise investing in bank loans and
similar extensions of credit in the ordinary course of their business, in all or a portion of its
rights and/or obligations under this Agreement (including, without limitation, all or a portion of
its Commitment and the Advances owing to it and the Note held by it); provided that (i)
such Lender’s obligations under this Agreement (including, without limitation, its Commitment)
shall remain unchanged, (ii) such Lender shall remain solely responsible to the Borrowers for the
performance of such obligations, (iii) the Borrowers shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under this Agreement and
(iv) such participant’s right to consent to any modification, waiver or release of any of the
provisions of this Agreement shall be limited to the right to consent to (A) any reduction in
principal, interest or fees payable to such Lender under this Agreement, (B) the postponement of
any date fixed for the payment of any principal, interest or fees under this Agreement and (C) any
amendments to the foregoing clauses (A) and (B).




          SECTION 8.08. Limitation on Assignments and Participations. (a) Any Lender may, in
connection with any actual or proposed assignment or participation pursuant to Section 8.07,
disclose to the actual or proposed assignee or participant any information relating to any


Credit Agreement










 



40



Borrower
furnished to such Lender by or on behalf of such Borrower; provided that the actual or
proposed assignee or participant shall have agreed prior to any such disclosure to preserve the
confidentiality of any confidential information relating to such Borrower received by it from such
Lender or such Borrower.




          (b) Notwithstanding anything in Section 8.07 to the contrary, no Lender shall have the right
to assign its rights and obligations hereunder or any interest therein or to sell participations to
one or more banks or other financial institutions in all or a portion of its rights hereunder or
any interest therein where the result of such assignment or participation would be reasonably
expected to entitle the Lender to claim additional amounts pursuant to Section 2.02(d), 2.06, 2.08,
2.10 or 8.04 or would otherwise result in an increase in the a Borrower’s obligations.




          (c) Anything in this Section 8.08 to the contrary notwithstanding, any Lender may assign and
pledge all or any portion of its rights to payment of the Advances owing to it hereunder to any
Federal Reserve Bank (and its transferees) as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any applicable Operating Circular issued by
such Federal Reserve Bank. No such assignment shall have the effect of releasing such Lender from
its obligations hereunder.




          SECTION 8.09. Withholding. If any Lender, or any Person that becomes a party to this
Agreement pursuant to Section 8.07, is not incorporated under the laws of the United States of
America or a state thereof, such Person agrees that, prior to the first date on which any payment
is due to it hereunder, it will deliver to each of the Company and the Administrative Agent (i) two
duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI or successor
applicable form, as the case may be, certifying in each case that such Person is entitled to
receive payments under this Agreement, without deduction or withholding of any United States
federal income taxes, and (ii) an Internal Revenue Service Form W-8BEN or successor applicable
form, as the case may be, to establish an exemption from United States backup withholding tax.
Each Person which delivers to the Company a Form W-8BEN or W-8ECI pursuant to the preceding
sentence further undertakes to deliver to each of the Company and the Administrative Agent two
further copies of Form W-8BEN or W-8ECI, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most recent form previously
delivered by it to the Company and the Administrative Agent, and such extensions or renewals
thereof as may reasonably be requested by the Company or the Administrative Agent, certifying in
the case of a Form W-8BEN or W-8ECI that such Person is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income taxes, unless in any
such case an event (including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Person from duly completing and delivering any
such form with respect to it and such Person advises the Company and the Administrative Agent that
it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, and in the case of a Form W-8BEN, establishing an
exemption from United States backup withholding tax.



Credit Agreement











 



41




          SECTION 8.10. Mitigation. In the event that any Lender claims any amounts under
Sections 2.02(d), 2.06, 2.08, 2.10 or 8.04(b), it shall use all reasonable efforts (consistent with
its internal policies and legal and regulatory restrictions) to take actions (including, without
limitation, changing the jurisdiction of its Applicable Lending Office) so as to eliminate such
additional amounts; provided that such Lender shall not be required to take any action if,
in its reasonable judgment, such action would be materially disadvantageous to it.




          SECTION 8.11. Governing Law; Waiver of Jury Trial. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED
HEREBY.




          SECTION 8.12. Execution in Counterparts. This Agreement may be executed in any
number of counterparts each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.




          SECTION 8.13. Submission to Jurisdiction; Etc.




          (a) Submission to Jurisdiction. The Company and the Designated Borrower hereby
submit to the nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City for purposes of all
legal proceedings arising out of or relating to this Agreement and the Notes.




          (b) Service of Process. Each of the Company and the Designated Borrower agrees that
service of process in any action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail), postage prepaid, to CT
Corporation System (the “Process Agent”) as its agent in New York, New York for service of
process at its address at 111 Eighth Avenue, New York, New York 10011, or at such other address of
which the Administrative Agent shall have been notified in writing by it; provided that, if
the Process Agent ceases to act as its agent for service of process, it will, by an instrument
reasonably satisfactory to the Administrative Agent, appoint another Person (subject to the
approval of the Administrative Agent) in the Borough of Manhattan, New York, New York to act as its
agent for service of process. Each other party hereto irrevocably consents to service of process
in the manner provided for notices in Section 8.02. Nothing in this Agreement will affect the
right of any party hereto to serve process in any other manner permitted by applicable law.




          (c) Waiver of Venue. The Company and the Designated Borrower irrevocably waive, to
the fullest extent permitted by law, any objection which either may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and a claim that such proceeding
brought in such a court has been brought in an inconvenient forum.


Credit Agreement











 



42




          SECTION 8.14. Judgment Currency. This is an international loan transaction in which the
specification of Dollars and payment in New York City is of the essence, and, except as otherwise
provided in this Agreement, Dollars shall be the currency of account in all events.




          SECTION 8.15. USA PATRIOT Act. Each Lender hereby notifies the Company and the
Designated Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify
and record information that identifies each Borrower, which information includes the name and
address of such Borrower and other information that will allow such Lender to identify such
Borrower in accordance with the Act.




ARTICLE IX




GUARANTEE




          SECTION 9.01. Guarantee. To induce the other parties to enter into this Agreement
and for other valuable consideration, receipt of which is hereby acknowledged, the Company hereby
unconditionally and irrevocably guarantees to the Administrative Agent, each Lender and their
respective successors and permitted assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and interest on the Advances to and the
Notes of the Designated Borrower and all other amounts whatsoever now or hereafter payable or
becoming payable by the Designated Borrower under this Agreement and each other Loan Document, in
each case strictly in accordance with the terms thereof (collectively, the “Guaranteed
Obligations”). The Company hereby further agrees that if the Designated Borrower shall fail to
pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, the Company will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended
maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.
This Section 9.01 is a continuing guarantee and is a guarantee of payment and is not merely a
guarantee of collection and shall apply to all Guaranteed Obligations whenever arising.




          SECTION 9.02. Acknowledgments, Waivers and Consents. The Company agrees that its
obligations under Section 9.01 shall be primary, absolute, irrevocable and unconditional under any
and all circumstances and that the guarantee therein is made with respect to any Guaranteed
Obligations now existing or in the future arising. Without limiting the foregoing, the Company
agrees that:




          (a) The occurrence of any one or more of the following shall not affect the enforceability or
effectiveness of this Article IX in accordance with its terms or affect, limit,
reduce, discharge or terminate the liability of the Company, or the rights, remedies, powers
and privileges of the Administrative Agent or any Lender, under this Article IX:





     (i) any modification or amendment (including by way of amendment, extension, renewal
or waiver), or any acceleration or other change in the time for payment or performance of
the terms of all or any part of the Guaranteed Obligations or any Loan


Credit Agreement











 



43



Document, or any
other agreement or instrument whatsoever relating thereto, or any modification of the
Commitments;




     (ii) any release, termination, waiver, abandonment, lapse or expiration, subordination
or enforcement of the liability of any other guarantee of all or any part of the Guaranteed
Obligations;




     (iii) any application of the proceeds of any other guarantee (including the
obligations of any other guarantor of all or any part of the Guaranteed Obligations) to all
or any part of the Guaranteed Obligations in any such manner and to such extent as the
Administrative Agent may determine;




     (iv) any release of any other Person (including any other guarantor with respect to
all or any part of the Guaranteed Obligations) from any personal liability with respect to
all or any part of the Guaranteed Obligations;




     (v) any settlement, compromise, release, liquidation or enforcement, upon such terms
and in such manner as the Administrative Agent may determine or as applicable law may
dictate, of all or any part of the Guaranteed Obligations or any other guarantee of
(including any letter of credit issued with respect to) all or any part of the Guaranteed
Obligations;




     (vi) the giving of any consent to the merger or consolidation of, the sale of
substantial assets by, or other restructuring or termination of the corporate existence of
the Designated Borrower or any other Person or any disposition of any shares of the Company
or the Designated Borrower;




     (vii) any proceeding against the Designated Borrower or any other guarantor of all or
any part of the Guaranteed Obligations or any collateral provided by any other Person or the
exercise of any rights, remedies, powers and privileges of the Administrative Agent and the
Lenders under the Loan Documents or otherwise in such order and such manner as the
Administrative Agent may determine, regardless of whether the Administrative Agent or the
Lenders shall have proceeded against or exhausted any collateral, right, remedy, power or
privilege before proceeding to call upon or otherwise enforce this Article IX;




     (viii) the entering into such other transactions or business dealings with the
Designated Borrower, any Subsidiary or affiliate thereof or any other guarantor of all or
any part of the Guaranteed Obligations as the Administrative Agent or any Lender may desire;
or




     (ix) all or any combination of any of the actions set forth in this Section 9.02(a).



          (b) The enforceability and effectiveness of this Article IX and the liability of the Company,
and the rights, remedies, powers and privileges of the Administrative Agent and the Lenders under
this Article IX shall not be affected, limited, reduced, discharged or terminated, and the Company
hereby expressly waives to the fullest extent permitted by law any defense now or in the future
arising, by reason of:



Credit Agreement











 



44





     (i) the illegality, invalidity or unenforceability of all or any part of the
Guaranteed Obligations, any Loan Document or any other agreement or instrument whatsoever
relating to all or any part of the Guaranteed Obligations;




     (ii) any disability or other defense with respect to all or any part of the Guaranteed
Obligations, including the effect of any statute of limitations that may bar the enforcement
of all or any part of the Guaranteed Obligations or the obligations of any such other
guarantor;




     (iii) the illegality, invalidity or unenforceability of any security for or other
guarantee (including any letter of credit) of all or any part of the Guaranteed Obligations
or the lack of perfection or continuing perfection or failure of the priority of any Lien on
any collateral for all or any part of the Guaranteed Obligations;




     (iv) the cessation, for any cause whatsoever, of the liability of the Designated
Borrower or any other guarantor with respect to all or any part of the Guaranteed
Obligations (other than, subject to Section 9.03, by reason of the full payment of all
Guaranteed Obligations);




     (v) any failure of the Administrative Agent or any Lender to marshal assets in favor
of the Designated Borrower or any other Person (including any other guarantor of all or any
part of the Guaranteed Obligations), to exhaust any collateral for all or any part of the
Guaranteed Obligations, to pursue or exhaust any right, remedy, power or privilege it may
have against the Designated Borrower or any other guarantor of all or any part of the
Guaranteed Obligations or any other Person or to take any action whatsoever to mitigate or
reduce such or any other Person’s liability, the Administrative Agent and the Lenders being
under no obligation to take any such action notwithstanding the fact that all or any part of
the Guaranteed Obligations may be due and payable and that the Designated Borrower may be in
default of its obligations under any Loan Document;




     (vi) any counterclaim, set-off or other claim which the Designated Borrower or any
other guarantor of all or any part of the Guaranteed Obligations has or claims with respect
to all or any part of the Guaranteed Obligations, or any counterclaim, set-off or other
claim which the Company may have with respect to all or any part of any obligations owed to
the Company by the Administrative Agent or any Lender (other than, without prejudice to
Section 9.03, any counterclaim or other claim that the amount of such Guaranteed Obligation
which is being claimed has been finally paid in full);




     (vii) any failure of the Administrative Agent or any Lender or any other Person to
file or enforce a claim in any bankruptcy or other proceeding with respect to any Person;




     (viii) any bankruptcy, insolvency, reorganization, winding-up or adjustment of debts,
or appointment of a custodian, liquidator or the like of it, or similar proceedings
commenced by or against any Person, including any discharge of, or bar or stay against
collecting, all or any part of the Guaranteed Obligations (or any interest on all or any
part of the Guaranteed Obligations) in or as a result of any such proceeding;


Credit Agreement











 



45



     (ix) any action taken by the Administrative Agent or any Lender that is authorized
under this Article IX or by any other provision of any Loan Document or any omission to take
any such action;




     (x) any law, regulation, decree or order of any jurisdiction of Governmental Authority
or any event affecting any term of the Guaranteed Obligations; or




     (xi) any other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor.



          (c) To the fullest extent permitted by law, the Company expressly waives, for the benefit of
the Administrative Agent and the Lenders, all diligence, presentment, demand for payment or
performance, notices of nonpayment or nonperformance, protest, notices of protest, notices of
dishonor and all other notices or demands of any kind or nature whatsoever, and any requirement
that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against
the Designated Borrower under any Loan Document or other agreement or instrument referred to herein
or therein, or against any other Person under any other guarantee of, or security for, any of the
Guaranteed Obligations, and all notices of acceptance of this Article IX or of the existence,
creation, incurring or assumption of new or additional Guaranteed Obligations.




          SECTION 9.03. Reinstatement. The obligations of the Company under this Article IX shall
be automatically reinstated if and to the extent that for any reason any payment by or on behalf of
the Designated Borrower in respect of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender, whether as a result of insolvency,
any proceedings in bankruptcy, dissolution, liquidation or reorganization or otherwise.




          SECTION 9.04. Subrogation. The Company hereby agrees that, until the final payment in
full of all Guaranteed Obligations, it shall not exercise any right or remedy arising by reason of
any performance by it of its guarantee in Section 9.01, whether by subrogation, reimbursement,
contribution or otherwise, against the Designated Borrower or any other guarantor of any of the
Guaranteed Obligations or any security for any of the Guaranteed Obligations.




          SECTION 9.05. Remedies. The Company agrees that, as between the Company and the
Administrative Agent and the Lenders, the obligations of the Designated Borrower under this
Agreement or any other Loan Documents may be declared to be forthwith due and payable as provided
in Section 6.01 (and shall be deemed to have become automatically due and payable in the
circumstances provided in said Section 6.01) for purposes of Section 9.01, notwithstanding any
stay, injunction or other prohibition preventing such declaration (or such obligations from
becoming automatically due
and payable) as against the Designated Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such obligations (whether
or not due and payable by the Designated Borrower) shall forthwith become due and payable by such
Company for purposes of Section 9.01.


Credit Agreement











 



46




          SECTION 9.06. Payments. Each payment by the Company under this Article IX shall be made
in accordance with Section 2.09 in Dollars, without deduction, set-off or counterclaim at the
Administrative Agent’s Account and free and clear of any and all present and future Taxes.




[remainder of page intentionally left blank]


Credit Agreement











 



47




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




	 	 	 	 	 
	 	THE STANLEY WORKS

 	 
	 	By  	/s/ Craig A. Douglas
 	 
	 	 	Name:  	Craig A. Douglas 	 
	 	 	Title: Vice President & Treasurer 	 



Credit Agreement










 



48


	 	 	 	 	 



	 	 	 	 	 
	 	CITIBANK, N.A.,

  as Administrative Agent

 	 
	 	By  	/s/ Anish M. Shah
 	 
	 	 	Name:  	Anish M. Shah 	 
	 	 	Title: Vice President 	 




Credit Agreement










 



49

	 	 	 	 	 



	 	 	 	 	 
	 	LENDERS


CITIBANK, N.A.,

 	 
	 	By  	/s/ Anish M. Shah
 	 
	 	 	Name:  	Anish M. Shah 	 
	 	 	Title: Vice President 	 




Credit Agreement










 



 

	 	 	 	 	 




SCHEDULE I




ADDRESS AND APPLICABLE LENDING OFFICES




	 	 	 	 	 
	Name of Lenders and Addresses	 	 	 	 
	For Notices	 	Domestic Lending Office	 	Eurodollar Lending Office
	 
	Citibank, N.A.

	 	Citibank, N.A.
	 	Citibank, N.A.
	2 Penns Way, Suite 200

	 	2 Penns Way, Suite 200
	 	2 Penns Way, Suite 200
	New Castle, DE 19720

	 	New Castle, DE 19720
	 	New Castle, DE 19720
	 
	 	 	 	 
	Attn:  Bank Loans Syndication

	 	Attn:  Bank Loans Syndication
	 	Attn:  Bank Loans Syndication
	Fax:   (302) 894-6120

	 	Fax:   (302) 894-6120
	 	Fax:   (302) 894-6120




SCHEDULE I











 



 


SCHEDULE I (cont’d)




LENDERS AND COMMITMENTS




	 	 	 	 	 
	Lenders	 	Commitment
	Citibank, N.A.
	 	$	500,000,000	 
	 
	 	 	 	 
	TOTAL
	 	$	500,000,000	 





SCHEDULE I











 



 




EXHIBIT A-1




RATE REQUEST




Citibank, N.A., as Reference Bank

     under the Credit Agreement

     referred to below

2 Penns Way, Suite 200

New Castle, Delaware 19720

Attn: Bank Loans Syndication




                          , 200_




Ladies and Gentlemen:




     The undersigned, The Stanley Works, refers to the Credit Agreement, dated as of January 8,
2007 (as amended, modified or supplemented from time to time, the “Credit Agreement”, the
terms defined therein being used herein as therein defined) among the undersigned, certain Lenders
parties thereto, and Citibank, N.A., as Administrative Agent for said Lenders and hereby requests
notification from you pursuant to Section 2.02(a) thereof of the Eurodollar Rate which is
applicable to the Advance to be made (or converted or continued) on           , 200  
in the principal amount of $                     with the Interest Period of       months.



	 	 	 	 	 
	 	Very truly yours,




The Stanley Works

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 





TO BE COMPLETED AND RETURNED BY

   REFERENCE BANK:




The rate requested above,

determined as required by

the Credit Agreement, is      .




	 	 	 	 	 
	 	CITIBANK, N.A., as Reference Bank

 	 
	 	By  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 


A1-1











 



 




EXHIBIT A-2




NOTICE OF BORROWING




Citibank, N.A., as Administrative Agent

  for the Lenders parties

  to the Credit Agreement

  referred to below

2 Penns Way, Suite 200

New Castle, Delaware 19720

Attn: Bank Loans Syndication




                          , 200_




Ladies and Gentlemen:




          The undersigned, The Stanley Works, refers to the Credit Agreement, dated as of January 8,
2007 (as amended, modified or supplemented from time to time, the “Credit Agreement”, the
terms defined therein being used herein as therein defined), among the undersigned, the Designated
Borrower, if any, certain Lenders parties thereto, and Citibank, N.A., as Administrative Agent for
said Lenders, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit
Agreement that the undersigned hereby requests a Borrowing on the following terms under the Credit
Agreement, and in that connection sets forth below the information relating to such Borrowing (the
“Proposed Borrowing”) as required by Section 2.02(b) of the Credit Agreement:






     (i) The Borrower is                                         .




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




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




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




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



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




          (A) the representations and warranties contained in Section 4.01 of the Credit Agreement
(other than the Excluded Representation) are correct in all material respects, before and after
giving effect to the Proposed Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date; and




          (B) no event has occurred and is continuing, or would result from such Proposed Borrowing or
from the application of the proceeds therefrom, which constitutes an Event of


A2-1










 



 



Default or would constitute an Event of Default but for the requirement that notice be given or
time elapse or both.




	 	 	 	 	 
	 	Very truly yours,


The Stanley Works

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


A2-2













 



 




EXHIBIT B




NOTICE OF CONVERSION OR CONTINUATION




                          , 200_




Citibank, N.A., as Administrative Agent

  for the Lenders parties

  to the Credit Agreement

  referred to below

2 Penns Way, Suite 200

New Castle, Delaware 19720

Attn: Bank Loans Syndication




Ladies and Gentlemen:




          The undersigned, The Stanley Works, refers to the Credit Agreement, dated as of January 8,
2007 (as amended, modified or supplemented from time to time, the “Credit Agreement”, the
terms defined therein being used herein as therein defined), among the undersigned, certain Lenders
parties thereto, and Citibank, N.A., as Administrative Agent for said Lenders, and hereby gives you
notice, pursuant to Section 2.04(b) of the Credit Agreement that [the undersigned] [NAME OF
DESIGNATED BORROWER] hereby elects to [convert][continue] the Borrowing consisting of [Base
Rate][Eurocurrency Rate] Advances:






     (i) which is in the amount of $          ;




     (ii) which, in the case of a Borrowing consisting of Eurodollar Rate Advances, has an
Interest Period of       month(s); and




     (iii)
which was borrowed (or previously converted or continued) on
                    , 200_.



          Such
[conversion][continuation] shall become effective on                      , 200_, at
which time such Advances shall be [converted into][continued as] [Base Rate][Eurodollar Rate]
Advances:




          (i) which is in the amount of $                     ;
and


B-1











 



 




          (ii) which has an Interest Period of     month(s).




	 	 	 	 	 
	 	Very truly yours,


The Stanley Works

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




B-2









 





EXHIBIT C-1




FORM OF OPINION OF COUNSEL TO THE COMPANY




                    , 200   




To each of the Lenders listed on

Schedule I hereto and to

Citibank, N.A., as Administrative Agent

For the Lenders





			
	     Re:	 	The $500,000,000 Credit Agreement among The Stanley Works, the Lenders party
thereto and Citibank, N.A., as Administrative Agent





Ladies and Gentlemen:




     We have acted as special counsel to The Stanley Works, a Connecticut corporation (the
“Company”) in connection with the negotiation, execution and delivery of that certain
$500,000,000 Credit Agreement, dated as of January 8, 2007, by and among the Company, the lenders
party thereto (the “Lenders”) and Citibank, N.A., as administrative agent for the Lenders
(in such capacity, the “Administrative Agent”) (the “Credit Agreement”).



     This opinion is being delivered pursuant to Section 3.01(d) of the Credit Agreement.
Capitalized terms used herein and not expressly defined herein have the definitions specified in
the Credit Agreement.



     In addition to the Credit Agreement, we have examined originals, certified copies or copies
otherwise identified as being true copies of the following:




	 	(a)	 	the Restated Certificate of Incorporation of the Company, dated September 11,
1998, filed with the Connecticut Secretary of State’s office on September 15, 1998,
certified by the Secretary of the Company as of the date hereof,
	 
	 	(b)	 	the Bylaws of the Company as in effect as of the date hereof, as certified by
the Secretary of the Company as of the date hereof;
	 
	 	(c)	 	the resolutions duly adopted at a meeting of the Board of Directors of the
Company on                      authorizing, among other things, the execution, delivery and
performance by the Company of the Credit Agreement and the transactions contemplated
thereby;
	 
	 	(d)	 	the Certificate of Legal Existence of the Company as of                      issued by
the Connecticut Secretary of State;





C1-1









 






	 	(e)	 	the Certificate of the General Counsel of the Company, dated as of the date
hereof, a copy of which is attached hereto as Exhibit A (the “Company’s
Certificate”);






	 	(f)	 	a copy of the Company’s Annual Report on Form 10-K for the year ended January
[___], 2006 (the “Form 10-K”) filed with the Securities and Exchange Commission;
	 
	 	(g)	 	a copy of the Company’s Quarterly Report on Form 10-Q for the period ended
October [___], 2006 filed with the Securities and Exchange Commission; and
	 
	 	(h)	 	copies of the Company’s Current Reports on Form 8-K,
dated
             
     , 2006.





     In addition, we have examined originals or copies authenticated to our satisfaction of such
corporate records, certificates of officers and other representatives of the Company and public
officials, and other documents as we have deemed relevant or necessary in connection with our
opinions set forth herein. As to questions of fact material to such opinions we have relied upon
the representations of the Company set forth in the Credit Agreement, certificates of officers and
other representatives of the Company and factual information we have obtained from such other
sources as we have deemed reasonable. We have assumed without investigation that there has been no
relevant change or development between the dates as of which the information cited in the preceding
sentence was given and the date of this letter. We have not independently verified the accuracy of
the matters set forth in the written statements or certificates upon which we have relied, nor have
we undertaken any lien, suit or judgment searches or searches of court dockets in any jurisdiction.
For purposes of the opinions in paragraph 1 we have relied exclusively upon certificates issued by
governmental authorities in the relevant jurisdictions, and such opinion is not intended to provide
any conclusion or assurance beyond that conveyed by those certificates.



     We have assumed: (i) the genuineness and authenticity of all documents examined by us and all
signatures thereon, and the conformity to originals of all copies of all documents examined by us;
(ii) that the execution, delivery and/or acceptance of the Credit Agreement has been duly
authorized by all action, corporate or otherwise, necessary by the parties to the Credit Agreement
other than the Company (those parties other than the Company are hereinafter collectively referred
to as the “Other Parties”); (iii) the legal capacity of all natural persons executing the
Credit Agreement; (iv) that each of the Other Parties has satisfied those legal requirements that
are applicable to it to the extent necessary to make the Credit Agreement enforceable against it;
(v) that the Credit Agreement constitutes a valid and binding obligation of the Other Parties and
is enforceable against the Other Parties in accordance with its terms; (vi) that each of the Other
Parties has complied with all legal requirements pertaining to its status as such status relates to
its rights to enforce the Credit Agreement; (vii) that the Credit Agreement accurately describes
and contains the mutual understandings of the parties, and that there are no oral or written
statements or agreements or usages of trade or courses of prior dealings among the parties that
would modify, amend or vary any of the terms of the Credit Agreement ; (viii) that the Other
Parties will act in accordance with, and will refrain from taking any action that is forbidden by,
the terms and conditions of the Credit Agreement; (ix) that the constitutionality or validity of a
relevant statute, rule, regulation or agency action is not in issue; (x) that all agreements other
than the Credit Agreement with respect to which we have provided



C1-2









 







advice in our letter or reviewed in connection with our letter would be enforced as written;
(xi) that there has not been any mutual mistake of fact or misunderstanding, fraud, duress or undue
influence; and (xii) that each of the Other Parties and any agent acting for it in connection with
the Credit Agreement has acted without notice of any defense against the enforcement of any rights
created by, or adverse claim to any property transferred pursuant to, the Credit Agreement.



     While we have not conducted any independent investigation to determine facts upon which our
opinions are based or to obtain information about which this letter advises you, we confirm that we
do not have any actual knowledge which has caused us to conclude that our reliance and assumptions
cited in the two preceding paragraphs are unwarranted or that any information supplied in this
letter is incorrect.



     As used in this opinion with respect to any matter, the qualifying phrases “to the best of our
knowledge” and “our actual knowledge” and any similar phrase means the conscious awareness of facts
or other information by: (i) the lawyer signing this opinion; and (ii) any lawyer who has had
active involvement in negotiating or preparing the Credit Agreement or preparing this opinion. In
this regard, we have not made any special review or investigation in connection with rendering any
opinion so qualified.



     Based on the foregoing, and in reliance thereon, and subject to the qualifications,
limitations and exceptions stated herein, we are of the opinion, having due regard for such legal
considerations as we deem relevant, that:



     1. The Company is a corporation validly existing and in good standing under the laws of the
State of Connecticut.



     2. The execution, delivery and performance by the Company of the Credit Agreement and the
consummation of the transaction contemplated thereby are within the power and authority of the
Company and have been duly authorized by all necessary proceedings under the organizational
documents of the Company, and did not and do not (i) violate or conflict with any provision of the
organizational documents of the Company, (ii) violate or conflict with any law, rule or regulation
of any governmental authority applicable to the Company, (iii) require the Company to obtain any
approval, consent or waiver of, or make any filing with, any governmental agency or body (other
than approvals, consents or waivers already obtained or filings already made), (iv) require the
consent or authorization of, or approval by, or notice to, any party to any material contract or
agreement of which we have knowledge to which the Company is a party, except for such consents,
authorizations, approvals or notices that (assuming the power and authority of the consenting
entity and the authority and capacity of the person signing on its behalf) have been obtained or
made, or (v) violate or conflict with any judgment, order or decree of which we have knowledge to
which the Company is a party or by which any of its assets or properties is bound.



     3. The Credit Agreement has been duly executed and delivered by the Company; and the Credit
Agreement constitutes the legal, valid and binding obligations of the Company, enforceable against
it in accordance with its terms.



C1-3









 





     4. The Company is not an “investment company”, or a company “controlled” by an “investment
company”, within the meaning of the Investment Company Act of 1940, as amended.



     Our opinions as herein expressed are subject to the following qualifications and limitations:



     (1) Since we do not represent the Company on a regular basis, we have assumed the accuracy of
the description of the Company’s business set forth in the Form 10-K.



     (2) Our opinions are subject to the effect of Federal and state bankruptcy, insolvency,
reorganization, arrangement, moratorium, fraudulent conveyance and other laws relating to or
affecting the rights of creditors generally (or affecting the rights of only creditors of specific
types of debtors), with respect to which we express no opinion.



     (3) Our opinions are subject to limitations imposed by general principles of equity and public
policy upon (i) the enforceability of any of the remedies, covenants or other provisions of the
Credit Agreement, including, without limitation, any rights to contribution or indemnification,
concepts of materiality, good faith and fair dealing, and (ii) the availability of injunctive
relief or other equitable remedies, and are subject to the application of principles of equity
(regardless of whether enforcement is considered in proceedings at law or in equity).



     (4) Our opinions are subject to the effect of the rules of law that:




	 	a.	 	limit or affect the enforcement of provisions of a contract
that purport to waive, or to require waiver of, (i) the obligations of good
faith, fair dealing, diligence and reasonableness, (ii) statutory or regulatory
rights, except to the extent that the statute or regulation explicitly allows
waivers; and (iii) unknown future defenses;
	 
	 	b.	 	provide that choice of law (unless the monetary thresholds set
forth in the General Obligations Laws of the State of New York have been
satisfied), forum selection and jury waiver clauses in contracts are not
necessarily binding;
	 
	 	c.	 	provide a time limitation after which a remedy may not be
enforced;
	 
	 	d.	 	limit the enforceability of provisions releasing, exculpating
or exempting a party from, or requiring indemnification of a party for,
liability for its own action or inaction, to the extent the action or inaction
involves gross negligence, recklessness, willful misconduct, unlawful conduct,
or violation of public policy;
	 
	 	e.	 	may, where less than all of a contract may be unenforceable,
limit the enforceability of the balance of the contract to circumstances in
which the unenforceable portion is not an essential part of the agreed
exchange;
	 
	 	f.	 	govern and afford judicial discretion regarding the
determination of damages and entitlement to attorneys’ fees and other costs;





C1-4









 





     (5) We express no opinion with respect to the enforceability of provisions for late charges.



     (6) We express no opinion with respect to the enforceability of any provisions in the Credit
Agreement: (i) purporting to create or waive an agency or attorney-in-fact relationship; or (ii)
prohibiting oral amendment or waiver or limiting the effect of a course of dealings between the
parties.



     (7) We express no opinion as to the laws of any jurisdiction other than the corporate laws of
the State of Connecticut, the laws of the State of New York and the federal laws of the United
States of America.



     This opinion is rendered on the date hereof, and we have no continuing obligation hereunder to
inform you of changes of law or fact subsequent to the date hereof or facts of which we have
become aware after the date hereof.



     This opinion is solely for your benefit and may not be furnished to, or relied upon by, any
other person or entity without the express prior written consent of the undersigned. This opinion
is limited to the matters set forth herein, and no opinion may be inferred or implied beyond the
matters expressly stated in this letter.



Very truly yours,




C1-5









 








COMPANY’S CERTIFICATE




     I, Bruce H. Beatt, am the General Counsel of The Stanley Works (the “Company ”). I
understand that, pursuant to Section 3.01(d) of that certain Credit Agreement, dated as of the date
hereof (the “Credit Agreement”), among the Company, the lenders party thereto (the
“Lenders”) and Citibank, N.A., as administrative agent for the Lenders, Sonnenschein Nath &
Rosenthal LLP is relying upon this certificate and the statements made herein in rendering certain
legal opinions. Capitalized terms used herein but not otherwise defined shall have the meaning set
forth in the Credit Agreement.



     With regard to the foregoing, on behalf of the Company, I certify that:



     1. Based solely and exclusively on conversations with Craig A. Douglas, Treasurer of the
Company:




     a. The value of all securities owned by the Company (excluding those by majority-owned
Subsidiaries of the Company) does not exceed ten percent (10%) of the value of the Company’s
total assets;




     b. Less than twenty-five percent (25%) of the assets of the Company on a consolidated
basis and on an unconsolidated basis consist of the margin stock (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System); and




     c. The Company is primarily engaged, directly or through a wholly-owned Subsidiary or
Subsidiaries, in a business of businesses other than that of investing, reinvesting, owning,
holding or trading in securities and is not engaged and does not propose to engage in the
business of investing, reinvesting, owning, holding or trading in securities, and does not
own or propose to acquire investment securities having a value exceeding forty percent (40%)
of the value of the Company’s total assets (exclusive of government securities and cash
items) on an unconsolidated basis.



     2. Based solely and exclusively on interviews of the officers of the Company responsible for
its financing activities and the lawyers under my supervision, the execution, delivery and
performance by the Company of any of its obligations under the Credit Agreement does not and will
not require the Company to obtain any approval, consent or waiver of, or make any filing with, any
governmental agency or body (other than approvals, consents or waivers already obtained or filings
already made), require the consent or authorization of, or approval by, or notice to, any party to
any material contract or agreement to which the Company is a party, except for such consents,
authorizations, approvals or notices that (assuming the power and authority of the consenting
entity and the authority and capacity of the person signing on its behalf) have been obtained or
made, or violate or conflict with any judgment, order or decree to which the Company is a party or
by which any of its assets or properties is bound.



C1-6









 





     In Witness Whereof, I have executed this certificate as of January ___, 2007.



	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Name:
	 	Bruce H. Beatt	 	 
	 

	 	Title:
	 	Vice President, General Counsel and
Secretary	 	 







C1-7









 








EXHIBIT C-2




FORM OF OPINION OF SPECIAL NEW YORK COUNSEL TO

THE ADMINISTRATIVE AGENT




                    , 200   




To the Lenders that are parties to the

  Credit Agreement referred

  to below and Citibank, N.A., as Administrative

  Agent for such Lenders (the “Administrative Agent”)




Ladies and Gentlemen:



          We have acted as special New York counsel to the Administrative Agent in connection with the
$500,000,000 Credit Agreement dated as of January 8, 2007 (the “Credit Agreement”) among
The Stanley Works, a Connecticut corporation (the “Company”), the financial institutions
referred to as “Lenders” in the Credit Agreement (the “Lenders”) and the Administrative
Agent. Terms defined in the Credit Agreement have the same respective defined meanings when used
herein.




          In rendering the opinions expressed below, we have examined an executed counterpart of the
Credit Agreement. In our examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity with authentic
original documents of all documents submitted to us as copies. When relevant facts were not
independently established, we have relied upon representations made in or pursuant to the Credit
Agreement or in certificates delivered by or on behalf of the Company pursuant thereto. We have
also assumed that the Credit Agreement has been duly authorized, executed and delivered by, and
(except, to the extent set forth below, as to the Company) constitutes a legal, valid, binding and
enforceable obligation of, all of the parties thereto, that all signatories thereto have been duly
authorized and that all such parties are duly organized and validly existing and have the power and
authority (corporate or other) to execute, deliver and perform the same.




          Based upon and subject to the foregoing and subject also to the comments and qualifications
set forth below, and having considered such questions of law as we have deemed necessary as a basis
for the opinions expressed below, we are of the opinion that the Credit Agreement constitutes a
legal, valid and binding obligation of the Company, the enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance or transfer, moratorium or other similar laws relating to or affecting the
rights of creditors generally, and except as the enforceability of the Credit Agreement is subject
to the application of general principles of equity (regardless of whether considered in a
proceeding in equity or at law), including without limitation (i) the possible unavailability of
specific performance, injunctive relief or any other equitable remedy and (ii) concepts of
materiality, reasonableness, good faith and fair dealing.




C2-1









 





          The foregoing opinions are also subject to the following comments and qualifications:





     (A) The enforceability of provisions in the Credit Agreement to the effect that terms
may not be waived or modified except in writing may be limited under certain circumstances.




     (B) The enforceability of Section 8.04(c) of the Credit Agreement may be limited by
laws limiting the enforceability of provisions exculpating or exempting a party from, or
requiring indemnification of a party for, liability for its own action or inaction, to the
extent the action or inaction involves gross negligence, recklessness, willful misconduct or
unlawful conduct.




     (C) We express no opinion as to (i) the effect of the laws of any jurisdiction in
which any Lender is located (other than New York) that limits the interest, fees or other
charges it may impose for the loan or use of money or other credit, (ii) Section 2.09(b) of
the Credit Agreement, (iii) the last sentence of Section 8.05 of the Credit Agreement, (iv)
Section 8.13(a) of the Credit Agreement insofar as such sentence relates to the
subject-matter jurisdiction of the United States District Court for the Southern District of
New York to adjudicate any controversy related to the Credit Agreement, (iv) the waiver of
inconvenient forum set forth in Section 8.13(c) of the Credit Agreement with respect to
proceedings in the United States District Court for the Southern District of New York, and
(v) Section 8.14 of the Credit Agreement.




     (D) Section 9.02(b) of the Credit Agreement may not be enforceable to the extent that
the Guaranteed Obligations as defined therein are materially modified.



          The foregoing opinions are limited to matters involving the Federal laws of the United States
and the law of the State of New York, and we do not express any opinion as to the law of any other
jurisdiction.




          This opinion letter is provided to you by us as special New York counsel to the Administrative
Agent pursuant to Section 3.01(d) of the Credit Agreement and may not be relied upon by any other
person or for any purpose other than in connection with the transactions contemplated by the Credit
Agreement without our prior written consent in each instance.




Very truly yours,




WFC/RMG





C2-2









 








EXHIBIT D


ASSIGNMENT AND ACCEPTANCE




          Reference is made to the Credit Agreement dated as of January 8, 2007 (as amended or modified
from time to time, the “Credit Agreement”) among The Stanley Works, a Connecticut
corporation (the “Company”), the Lenders (as defined in the Credit Agreement) and Citibank,
N.A., as administrative agent for the Lenders (the “Administrative Agent”). Terms defined
in the Credit Agreement are used herein with the same meaning.




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




          1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases
and assumes from the Assignor, an interest in and to the Assignor’s rights and obligations under
the Credit Agreement as of the date hereof equal to the percentage interest specified on Schedule 1
hereto of all outstanding rights and obligations under the Credit Agreement. After giving effect
to such sale and assignment, the Assignee’s Commitment and the amount of the Advances owing to the
Assignee will be as set forth on Schedule 1 hereto.




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




          3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together
with copies of the financial statements referred to in Section 4.01 thereof and such other
documents and information as it has deemed appropriate to make its own credit analysis and decision
to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement; (iii) appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement as are delegated to the Administrative Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental thereto; (iv) agrees
that it will perform in accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; (v) agrees, for the benefit of the
Company, that it will be bound by the terms and provisions of the Credit


D-1









 







Agreement to the same extent as if it were an original party thereto; and (vi) attaches any U.S.
Internal Revenue Service forms required under Section 8.09 of the Credit Agreement.




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




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




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




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




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




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




	 	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	  Name:	 	 
	 	 	  Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	  Name:	 	 
	 	 	  Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	  Name:	 	 
	 	 	  Title:	 	 






D-2









 





Schedule 1

to

Assignment and Acceptance




	 	 	 
	Percentage interest assigned:

	 	                %
	 
	 	 
	Assignee’s Commitment:

	 	$                    
	 
	 	 
	Aggregate outstanding principal
amount of Advances assigned:

	 	$                    
	 
	 	 
	Principal amount of Note payable to Assignee:

	 	$                    
	 
	 	 
	Principal amount of Note
payable to Assignor:

	 	$                    
	 
	 	 
	Effective Date:

	 	                                        , 200   






	 	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNOR],

as Assignor	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	  Name:	 	 
	 	 	  Title:	 	 






Dated:                                         , 200   




	 	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNEE],

as Assignee	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	  Name:	 	 
	 	 	  Title:	 	 






Dated:                                         , 200   




D-3









 





Domestic Lending Office:

[Address]




Eurocurrency Lending Office:

[Address]




Accepted this                     day

of                                         , 200   




Citibank, N.A., as Administrative Agent




	 	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	  Name:	 	 
	  Title:	 	 






[Approved this                      day

of                                         , 200   




The Stanley Works




	 	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	  Name:	 	 
	  Title:]	 	 






D-4









 





EXHIBIT E




PROMISSORY NOTE

(Advances)




	 	 	 
	$                    

	 	Dated:                    






          FOR VALUE RECEIVED, the undersigned, [THE STANLEY WORKS, a Connecticut corporation]
[DESIGNATED BORROWER, a [                    ] corporation] (the “Borrower”), HEREBY PROMISES TO PAY to
the order of [NAME OF LENDER] (the “Lender”) the principal sum of $                     or, if less,
the aggregate principal amount of all Advances made by the Lender to the Borrower pursuant to the
Credit Agreement referred to below outstanding on the Termination Date, and such amount shall be
paid on or prior to the Termination Date as provided in the Credit Agreement referred to below.




          Capitalized terms used herein and not defined herein shall have the meanings provided in the
Credit Agreement referred to below.




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




          Both principal of and interest on each Advance are payable in Dollars, Citibank, N.A., as
Administrative Agent, at the Administrative Agent’s Account, New York, New York for the account of
the Lender, in same day funds. Each Advance made by the Lender to the Borrower and the maturity
thereof, and all payments made on account of the principal amount thereof, shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is a part of
this Promissory Note, which recordation shall be conclusive and binding absent manifest error but
the failure to make such recording shall not have any effect on the Lender’s rights hereunder.




          This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of,
the Credit Agreement dated as of January 8, 2007 (as amended, modified or supplemented from time to
time, the “Credit Agreement”), among The Stanley Works, the Lender and certain other
lenders parties thereto, and Citibank, N.A., as Administrative Agent for the Lender and such other
lenders. The Credit Agreement, among other things, (i) provides for the making of Advances by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the amount first above mentioned, the indebtedness of the Borrower resulting from each
such Advance being evidenced by this Promissory Note, and (ii) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events and also for prepayments on
account of principal hereof prior to the maturity hereof upon the terms and conditions therein
specified.




E-1









 





	 	 	 	 	 	 	 
	 	 	[THE STANLEY WORKS]

[DESIGNATED BORROWER]	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	 	Name:	 	 
	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	 	Name:	 	 
	 	 	 	Title:	 	 






E-2









 





EXHIBIT F




FORM OF DESIGNATION LETTER




                           , 200   




To Citibank, N.A.,

   as Administrative Agent

Two Penn’s Way, Suite 200

New Castle, DE 19720

Attention: Bank Loans Syndication




Ladies and Gentlemen:




          We make reference to the $500,000,000 Credit Agreement dated as of January 8, 2007 (the
“Credit Agreement”) among The Stanley Works (the “Company”), the Lenders party
thereto and Citibank, N.A., as Administrative Agent. Terms defined in the Credit Agreement are
used herein as defined therein.




          The Company hereby designates [                    ] (the “Designated Borrower”), a
corporation duly incorporated under the laws of [                    ] and a Subsidiary, as a Company in
accordance with Section 2.13 of the Credit Agreement. The Company has established the Designated
Borrower for the purpose of financing and consummating the Acquisition Agreement as defined in the
Credit Agreement.




          The Designated Borrower hereby accepts the above designation and hereby expressly and
unconditionally accepts all of the obligations of a Borrower under the Credit Agreement, adheres to
the Credit Agreement and agrees and confirms that, upon your execution and return to the Company of
the enclosed copy of this letter, it shall be a Borrower for all purposes of the Credit Agreement,
joins in each of the waivers, appointments and submissions in Article VIII thereof, and will
perform and comply with the terms and provisions of the Credit Agreement applicable to it as if it
had originally executed the Credit Agreement as a Borrower. The Designated Borrower hereby
authorizes and empowers the Company to act as its representative and attorney-in-fact for the
purposes of signing documents and giving and receiving notices (including notices of Borrowing
under the Credit Agreement) and other communications in connection with the Credit Agreement and
the transactions contemplated thereby and for the purposes of modifying or amending any provision
of the Credit Agreement and further agrees that the Administrative Agent and each Lender may
conclusively rely on the foregoing authorization.




          The Designated Borrower represents and warrants to the Administrative Agent and each Lender
the following:





	 	(a)	 	Corporate Existence. The Designated Borrower is an
entity duly organized and validly existing under the laws of its jurisdiction
of formation.




F-1









 












	 	(b)	 	Corporate Authorization, Etc. The performance of its
obligations under the Credit Agreement and the execution, delivery and
performance by the Designated Borrower of this Designation Letter and any Note
executed by the Designated Borrower are within the Designated Borrower’s
corporate powers, have been duly authorized by all necessary corporate action
and do not contravene (i) the Designated Borrower’s charter documents of (ii)
any law or contractual restriction binding on or affecting the Designated
Borrower.
	 
	 	(c)	 	No Approvals. No authorization, approval or action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by the Designated
Borrower of this Designation Letter and any Note executed by the Designated
Borrower or the performance of its obligations under the Credit Agreement.
	 
	 	(d)	 	Enforceability. Each of the Credit Agreement and this
Designation Letter is and, upon issuance and delivery thereof in accordance
with the Credit Agreement, each Note executed by the Designated Borrower will
be the legal, valid and binding obligations of the Designated Borrower,
enforceable against the Designated Borrower in accordance with their respective
terms.
	 
	 	(e)	 	Investment Company. The Designated Borrower is not an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended.
	 
	 	(f)	 	No Defaults. The Designated Borrower is not in default
under or with respect to any agreement, instrument or undertaking to which it
is a party or by which it or any of its property is bound in any respect which
could reasonably be expected to result in a Material Adverse Effect.
	 
	 	(g)	 	Use of Proceeds, Etc. All proceeds of each Advance
made to the Designated Borrower will be used by it only in accordance with the
provisions of Section 2.12 of the Credit Agreement. It is not, nor will be,
engaged in the business of extending credit for the purpose of buying or
carrying Margin Stock and no proceeds of any Advance will be used by it to
extend credit to others for the purpose of buying or carrying any Margin Stock.
Neither the making of any Advance to the Designated Borrower nor the use of
the proceeds thereof will violate or be inconsistent with the provisions of
Regulations U or X issued by the Board of Governors of the Federal Reserve
System.






     The Designated Borrower agrees that the address set forth below its name at the shall
be its “Address for Notices” for all purposes of the Credit Agreement (including Section
8.13 thereof). The Designated Borrower acknowledges its receipt of the notice of each
Lender, provided pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)), set forth in Section 8.15 of the Credit
Agreement.



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	 	 	THE STANLEY WORKS	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	  Name:	 	 
	 	 	  Title:	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	  Name:	 	 
	 	 	  Title:	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF DESIGNATED BORROWER]	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	  Name:	 	 
	 	 	  Title:	 	 






Address for Notices:

[                                                            ]

[                                                            ]

[                                                            ]




Attention: [                                                            ]

Telecopier: [                                                            ]

Telephone: [                                                            ]




ACCEPTED AND AGREED:




CITIBANK, N.A.,

as Administrative Agent




	 	 	 	 	 
	By
	 	 	 	 
	 

	 	 

	 	 
	  Name:	 	 
	  Title:	 	 







F-3