Exhibit 4.5




 





 


 


CREDIT AGREEMENT


 


Dated as of April 27, 2005


 


among


 


CARRIAGE SERVICES, INC.,

as the Borrower,


 


BANK OF AMERICA, N.A.,

as Administrative Agent, Swing Line Lender

and

L/C Issuer,


 


WELLS FARGO BANK, NATIONAL ASSOCIATION


as Syndication Agent,


 


and


 


The Other Lenders Party Hereto


 




 





 


BANC OF AMERICA SECURITIES LLC,
as

Sole Lead Arranger and Sole Book Manager


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE I.

  	
  DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
  1.01

  	
  Defined
  Terms

  	
   

  
	
  1.02

  	
  Other Interpretive Provisions

  	
   

  
	
  1.03

  	
  Accounting Terms

  	
   

  
	
  1.04

  	
  Rounding

  	
   

  
	
  1.05

  	
  Times of Day

  	
   

  
	
  1.06

  	
  Letter of Credit Amounts

  	
   

  
	
  1.07

  	
  References to Agreements and Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
  THE COMMITMENTS AND CREDIT EXTENSIONS

  	
   

  
	
  2.01

  	
  Revolving Loans

  	
   

  
	
  2.02

  	
  Borrowings, Conversions and Continuations of Loans

  	
   

  
	
  2.03

  	
  Letters of Credit

  	
   

  
	
  2.04

  	
  Swing Line Loans

  	
   

  
	
  2.05

  	
  Prepayments

  	
   

  
	
  2.06

  	
  Termination or Reduction of Commitments

  	
   

  
	
  2.07

  	
  Repayment of Loans

  	
   

  
	
  2.08

  	
  Interest

  	
   

  
	
  2.09

  	
  Fees

  	
   

  
	
  2.10

  	
  Computation of Interest and Fees

  	
   

  
	
  2.11

  	
  Evidence of Debt

  	
   

  
	
  2.12

  	
  Payments Generally; Administrative Agent’s Clawback

  	
   

  
	
  2.13

  	
  Sharing of Payments by Lenders

  	
   

  
	
  2.14

  	
  Increase in Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
   

  
	
  3.01

  	
  Taxes

  	
   

  
	
  3.02

  	
  Illegality

  	
   

  
	
  3.03

  	
  Inability to Determine Rates

  	
   

  
	
  3.04

  	
  Increased Costs; Reserves on Eurodollar Rate Loans

  	
   

  
	
  3.05

  	
  Compensation for Losses

  	
   

  
	
  3.06

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  
	
  3.07

  	
  Survival

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
   

  
	
  4.01

  	
  Conditions of Initial Credit Extension

  	
   

  
	
  4.02

  	
  Conditions to all Credit Extensions

  	
   

  



 


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  ARTICLE V.

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  5.01

  	
  Existence, Qualification and Power; Compliance with Laws

  	
   

  
	
  5.02

  	
  Authorization; No Contravention

  	
   

  
	
  5.03

  	
  Governmental Authorization; Other Consents

  	
   

  
	
  5.04

  	
  Binding Effect

  	
   

  
	
  5.05

  	
  Financial Statements; No Material Adverse Effect; No Internal Control
  Event

  	
   

  
	
  5.06

  	
  Litigation

  	
   

  
	
  5.07

  	
  No Default

  	
   

  
	
  5.08

  	
  Ownership of Property; Liens

  	
   

  
	
  5.09

  	
  Environmental Compliance

  	
   

  
	
  5.10

  	
  Insurance

  	
   

  
	
  5.11

  	
  Taxes

  	
   

  
	
  5.12

  	
  ERISA Compliance

  	
   

  
	
  5.13

  	
  Capitalization; Subsidiaries

  	
   

  
	
  5.14

  	
  Margin Regulations; Investment Company Act; Public Utility Holding
  Company Act

  	
   

  
	
  5.15

  	
  Disclosure

  	
   

  
	
  5.16

  	
  Compliance with Laws

  	
   

  
	
  5.17

  	
  Intellectual Property; Licenses, Etc.

  	
   

  
	
  5.18

  	
  Common Enterprise

  	
   

  
	
  5.19

  	
  Solvency

  	
   

  
	
  5.20

  	
  Collateral; Perfection of Liens and Security Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
  6.01

  	
  Financial Statements

  	
   

  
	
  6.02

  	
  Certificates; Other Information

  	
   

  
	
  6.03

  	
  Notices

  	
   

  
	
  6.04

  	
  Payment of Obligations

  	
   

  
	
  6.05

  	
  Preservation of Existence, Etc.

  	
   

  
	
  6.06

  	
  Maintenance of Properties

  	
   

  
	
  6.07

  	
  Maintenance of Insurance

  	
   

  
	
  6.08

  	
  Compliance with Laws

  	
   

  
	
  6.09

  	
  Books and Records

  	
   

  
	
  6.10

  	
  Inspection Rights

  	
   

  
	
  6.11

  	
  Use of Proceeds

  	
   

  
	
  6.12

  	
  New Subsidiaries

  	
   

  
	
  6.13

  	
  Maintenance of Trust Reserves and Trust Accounts

  	
   

  
	
  6.14

  	
  Maintenance of Trust Balance

  	
   

  
	
  6.15

  	
  Collateral

  	
   

  
	
  6.16

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.

  	
  NEGATIVE COVENANTS

  	
   

  
	
  7.01

  	
  Liens

  	
   

  
	
  7.02

  	
  Investments

  	
   

  
	
  7.03

  	
  Debt

  	
   

  



 


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  7.04

  	
  Fundamental Changes

  	
   

  
	
  7.05

  	
  Dispositions

  	
   

  
	
  7.06

  	
  Restricted Payments; Issuance of Preferred Stock

  	
   

  
	
  7.07

  	
  Change in Nature of Business

  	
   

  
	
  7.08

  	
  Transactions with Affiliates

  	
   

  
	
  7.09

  	
  Burdensome Agreements

  	
   

  
	
  7.10

  	
  Use of Proceeds

  	
   

  
	
  7.11

  	
  Financial Covenants

  	
   

  
	
  7.12

  	
  Maintenance of Ownership of Subsidiaries

  	
   

  
	
  7.13

  	
  Trust Funds

  	
   

  
	
  7.14

  	
  Settlement of Litigation

  	
   

  
	
  7.15

  	
  Modification of Senior Notes

  	
   

  
	
  7.16

  	
  Prepayment of Senior Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  	
  EVENTS OF DEFAULT AND REMEDIES

  	
   

  
	
  8.01

  	
  Events of Default

  	
   

  
	
  8.02

  	
  Remedies Upon Event of Default

  	
   

  
	
  8.03

  	
  Application of Funds

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX.

  	
  ADMINISTRATIVE AGENT

  	
   

  
	
  9.01

  	
  Appointment and Authority

  	
   

  
	
  9.02

  	
  Rights as a Lender

  	
   

  
	
  9.03

  	
  Exculpatory Provisions

  	
   

  
	
  9.04

  	
  Reliance by Administrative Agent

  	
   

  
	
  9.05

  	
  Delegation of Duties

  	
   

  
	
  9.06

  	
  Resignation of Administrative Agent

  	
   

  
	
  9.07

  	
  Non-Reliance on Administrative Agent and Other Lenders

  	
   

  
	
  9.08

  	
  No Other Duties, Etc.

  	
   

  
	
  9.09

  	
  Administrative Agent May File Proofs of Claim

  	
   

  
	
  9.10

  	
  Collateral and Guaranty Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X.

  	
  MISCELLANEOUS

  	
   

  
	
  10.01

  	
  Amendments, Etc.

  	
   

  
	
  10.02

  	
  Notices; Effectiveness; Electronic Communication

  	
   

  
	
  10.03

  	
  No Waiver; Cumulative Remedies

  	
   

  
	
  10.04

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  
	
  10.05

  	
  Payments Set Aside

  	
   

  
	
  10.06

  	
  Successors and Assigns

  	
   

  
	
  10.07

  	
  Treatment of Certain Information; Confidentiality

  	
   

  
	
  10.08

  	
  Right of Setoff

  	
   

  
	
  10.09

  	
  Interest Rate Limitation

  	
   

  
	
  10.10

  	
  Counterparts; Integration; Effectiveness

  	
   

  
	
  10.11

  	
  Survival of Representations and Warranties

  	
   

  
	
  10.12

  	
  Severability

  	
   

  
	
  10.13

  	
  Replacement of Lenders

  	
   

  
	
  10.14

  	
  Governing Law; Jurisdiction; Etc.

  	
   

  



 


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  10.15

  	
  Waiver of Jury Trial

  	
   

  
	
  10.16

  	
  USA PATRIOT Act Notice

  	
   

  
	
  10.17

  	
  ENTIRE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNATURES

  	
   

  



 


iv





















 


	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  
	
  1.01

  	
  Existing Preferred Stock

  	
   

  
	
  2.01

  	
  Commitments and Applicable Percentages

  	
   

  
	
  2.03

  	
  Existing Letters of Credit

  	
   

  
	
  5.06

  	
  Litigation

  	
   

  
	
  5.09

  	
  Environmental Matters

  	
   

  
	
  5.13

  	
  Capitalization; Subsidiaries

  	
   

  
	
  7.02

  	
  Existing Investments

  	
   

  
	
  7.03

  	
  Existing Debt

  	
   

  
	
  10.02

  	
  Administrative Agent’s Office, Certain Addresses for Notices

  	
   

  
	
  10.06

  	
  Processing and Recordation Fees

  	
   

  



 


v





















 


EXHIBITS


 


	
   

  	
  Form of

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Assignment and Assumption

  	
   

  
	
  B

  	
  Compliance Certificate

  	
   

  
	
  C

  	
  Deed of Trust

  	
   

  
	
  D

  	
  Guaranty

  	
   

  
	
  E

  	
  Joinder Agreement

  	
   

  
	
  F

  	
  Opinion Matters

  	
   

  
	
  G

  	
  Revolving Loan Note

  	
   

  
	
  H

  	
  Revolving Loan Notice

  	
   

  
	
  I

  	
  Security Agreement

  	
   

  
	
  J

  	
  Swing Line Note

  	
   

  
	
  K

  	
  Swing Line Loan Notice

  	
   

  



 


vi





















 


CREDIT AGREEMENT


 


This CREDIT
AGREEMENT (“Agreement”) is entered into as of April 27, 2005, among
CARRIAGE SERVICES, INC., a Delaware corporation (the “Borrower”),
each lender from time to time party hereto (collectively, the “Lenders”
and individually, a “Lender”), and BANK OF AMERICA, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer, and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as Syndication Agent.


 


The Borrower
has requested that the Lenders provide a revolving credit facility, and the
Lenders are willing to do so on the terms and conditions set forth herein.


 


In
consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:


 


ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS


 


1.01                           Defined Terms.  As used in this Agreement, the following
terms shall have the meanings set forth below:


 


“Acquisition”
means the acquisition by any Person of (a) a majority of the Capital Stock
of another Person, (b) all or substantially all of the assets of another
Person or (c) all or substantially all of a line of business of another
Person, in each case (i) whether or not involving a merger or
consolidation with such other Person and (ii) whether in one transaction
or a series of related transactions.


 


“Acquisition
Consideration” means the consideration given by the Borrower or any of its
Subsidiaries for an Acquisition, including but not limited to the sum of
(without duplication) (a) the fair market value of any cash, property
(including Capital Stock) or services given, plus (b) the amount of any
Debt assumed, incurred or guaranteed (to the extent not otherwise included) in
connection with such Acquisition by the Borrower or any of its
Subsidiaries.  In determining Acquisition
Consideration, there shall be deducted the amount of Net Cash Proceeds arising
from any sale of assets included in the Acquisition which are sold (other than
to an Affiliate of the Borrower) no later than 90 days after consummation of
such Acquisition.


 


“Administrative
Agent” means Bank of America in its capacity as administrative agent under
any of the Loan Documents, or any successor administrative agent.


 


“Administrative
Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.


 


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


 


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


 


7





















 


“Aggregate
Commitments” means the Commitments of all the Lenders.


 


“Agreement”
means this Credit Agreement.


 


“Amended
Trusting Laws” has the meaning specified in Section 6.14.


 


“Applicable
Law” means (a) in respect of any Person, all provisions of Laws
applicable to such Person, and all orders and decrees of all courts and
determinations of arbitrators applicable to such Person and (b) in respect
of contracts made or performed in the State of Texas, “Applicable Law”
shall also mean the laws of the United States of America, including, without
limitation the foregoing, 12 USC Sections 85 and 86, as amended to
the date hereof and as the same may be amended at any time and from time to
time hereafter, and any other statute of the United States of America now or at
any time hereafter prescribing the maximum rates of interest on loans and
extensions of credit, and the laws of the State of Texas.


 


“Applicable
Percentage” means with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time.  If the commitment of each Lender to make
Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have
been terminated pursuant to Section 8.02 or if the Aggregate
Commitments have expired, then the Applicable Percentage of each Lender shall
be determined based on the Applicable Percentage of such Lender most recently
in effect, giving effect to any subsequent assignments.  The initial Applicable Percentage of each
Lender is set forth opposite the name of such Lender on Schedule 2.01
or in the Assignment and Assumption pursuant to which such Lender becomes a
party hereto, as applicable.


 


“Applicable
Rate” means the following percentages per annum, based upon the Leverage
Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.02(a):


 


Applicable
Rate


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Eurodollar
  Rate

  +

  	
   

  	
   

  	
   

  
	
  Pricing

  Level

  	
   

  	
  Leverage
  Ratio

  	
   

  	
  Commitment

  Fee

  	
   

  	
  Letters
  of

  Credit

  	
   

  	
  Base
  Rate +

  	
   

  
	
  1

  	
   

  	
  Less than 2.25 to 1.00

  	
   

  	
  0.500

  	
   

  	
  2.000

  	
   

  	
  0.500

  	
   

  
	
  2

  	
   

  	
  Less than 2.75 to 1.00 but equal to or greater than 2.25 to 1.00

  	
   

  	
  0.500

  	
   

  	
  2.500

  	
   

  	
  1.000

  	
   

  
	
  3

  	
   

  	
  Less than 3.25 to 1.00 but equal to or greater than 2.75 to 1.00

  	
   

  	
  0.500

  	
   

  	
  2.750

  	
   

  	
  1.250

  	
   

  
	
  4

  	
   

  	
  Greater than or equal to 3.25 to 1.00

  	
   

  	
  0.500

  	
   

  	
  3.000

  	
   

  	
  1.500

  	
   

  



 


8





















 


Any increase or decrease in the Applicable Rate resulting from a change
in the Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant
to Section 6.02(a); provided, however, that if a
Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Level 4 shall apply as of the first Business Day
after the date on which such Compliance Certificate was required to have been
delivered and shall remain in effect until the first Business Day immediately
following the date such Compliance Certificate is actually delivered to the
Administrative Agent.  Notwithstanding
the foregoing, the Applicable Rate in effect from the Closing Date through and
including the date the first Compliance Certificate is delivered pursuant to Section 6.02(a) after
the Closing Date shall be determined based upon Pricing Level 4.


 


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


 


“Arranger”
means Banc of America Securities LLC,
in its capacity as sole lead arranger and sole book manager.


 


“Assignee
Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.


 


“Assignment
and Assumption” means an assignment and assumption entered into by a Lender
and an Eligible Assignee (with the consent of any party whose consent is required
by Section 10.06(b), and accepted by the Administrative Agent, in
substantially the form of Exhibit A or any other form approved by
the Administrative Agent.


 


“Attributable
Indebtedness” means, on any date, (a) in respect of any Capital Lease
of any Person, the capitalized amount thereof that would appear on a balance
sheet of such Person prepared as of such date in accordance with GAAP, and (b) in
respect of any Synthetic Lease Obligation, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP
if such lease were accounted for as a capital lease.


 


“Audited
Financial Statements” means the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the fiscal year ended December 31, 2004,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.


 


“Availability”
means, on any date of determination, the difference between (a) the
Aggregate Commitments on such date and (b) the Total Outstandings on such
date.


 


“Availability
Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.06, and (c) the
date of termination of the commitment of each Lender to make Loans and of the
obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.


 


9





















 


“Bank of
America” means Bank of America, N.A. and its successors.


 


“Base Rate”  means for any day a fluctuating
rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2
of 1% and (b) the rate of interest in effect for such day as publicly
announced from time to time by Bank of America as its “prime rate.”  The “prime rate” is a rate set by Bank of
America based upon various factors including Bank of America’s costs and
desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate.  Any change in such
rate announced by Bank of America shall take effect at the opening of business
on the day specified in the public announcement of such change.


 


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


 


“Borrower”
has the meaning specified in the introductory paragraph hereto.


 


“Borrower
Materials” has the meaning specified in Section 6.02.


 


“Borrowing”
means a Revolving Borrowing or a Swing Line Borrowing, as the context may
require.


 


“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent’s Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.


 


“Capital
Expenditures” means, with respect to any Person for any period, the sum of
the aggregate of any expenditures by such Person during such period for an
asset which is properly classifiable in relevant financial statements of such
Person as property, equipment or improvements, fixed assets, or a similar type
of tangible capital asset in accordance with GAAP.  For purposes of this definition, (a) the
purchase price of equipment or property that is (i) purchased
substantially simultaneously with the trade-in of existing equipment or
property, (ii) exchanged in connection with a swap of existing equipment
or property or (iii) purchased or repaired with insurance proceeds
(promptly following receipt thereof on account of such property or equipment
being replaced or repaired) shall be included in Capital Expenditures only to
the extent of the gross amount by which such purchase price exceeds the credit
granted by the seller of such equipment or property for the equipment or
property being so repaired, traded in or exchanged or the amount of such
insurance proceeds, and (b) any expenditure funded with warranty proceeds,
proceeds from an indemnity claim, settlement payments, condemnation or eminent
domain awards or any other payments made to compensate such Person for any
damage, defect, delay or loss relating to the expenditure being made shall not
be included in Capital Expenditures to the extent such expenditure does not
exceed the applicable proceeds or payments. 
Capital Expenditures specifically excludes deferred obtaining costs.


 


“Capital
Leases” means, as applied to any Person, any lease of any Property by such
Person as lessee which would, in accordance with GAAP, be required to be classified
and accounted for as a capital lease on the balance sheet of such Person.


 


10





















 


“Capital
Stock” means, as to any Person, the equity interests in such Person,
including, without limitation, the shares of each class of capital stock in any
Person that is a corporation, each class of partnership interest in any Person
that is a partnership, and each class of membership interest in any Person that
is a limited liability company, and any warrants or options to purchase or
otherwise acquire any such equity interests.


 


“Carriage
Business Development Program” shall mean a program of the Borrower whereby
not more than 20 former owners of funeral homes or cemeteries receive preferred
securities of a Subsidiary pursuant to which the holder is entitled to receive
up to 10% of such Subsidiary’s cash flow in excess of a predetermined
level.  Not more than ten Subsidiaries
will participate in the program and the recipients of the preferred securities
are individuals whose funeral homes or cemeteries were acquired by the Borrower
or a Subsidiary.  The preferred
securities entitle the holders to receive in the aggregate up to 10% of the
aggregate excess cash flow of the participating Subsidiaries as and when
earned, do not constitute a claim on the assets of any Subsidiary, and are
subject to mandatory redemption by the applicable Subsidiary at maturity (not
to exceed ten years) at a redemption price expressed as a multiple of such
excess cash flow.


 


“Cash
Collateralize” has the meaning specified in Section 2.03(g).


 


“Cash
Management Obligations” means all obligations and liabilities of the
Borrower or any of its Subsidiaries owed to any Lender or any Affiliate thereof
arising under or in connection with treasury, depository, cash management,
custodial, automated clearinghouse or transfer of funds services or
arrangements or similar services and arrangements.


 


“Change in
Law” means the occurrence, after the date of this Agreement if in respect
of a Lender that is a party hereto as of such date or, in any other case, the
date such Lender becomes a “Lender” hereunder, of any of the
following:  (a) the adoption or
taking effect of any law, rule, regulation or treaty, (b) any change in
any law, rule, regulation or treaty or in the administration, interpretation or
application thereof by any Governmental Authority or (c) the making or
issuance of any request, guideline or directive (whether or not having the
force of law) by any Governmental Authority.


 


“Change of
Control” means, with respect to any Person, an event or series of events by
which:


 


(a)                                  any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, but excluding (i) any employee
benefit plan of such person or its subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or administrator of
any such plan and (ii) the Borrower’s officers and directors) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial
ownership” of all securities that such person or group has the right to acquire
(such right, an “option right”), whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 35%
or more of the Voting Shares of such Person; or


 


11





















 


(b)                                 during
any period of 12 consecutive months, a majority of the members of the board of directors
or other equivalent governing body of such Person cease to be composed of
individuals (i) who were members of that board or equivalent governing
body on the first day of such period, (ii) whose election or nomination to
that board or equivalent governing body was approved by individuals referred to
in clause (i) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body; provided that the requirement in
clause (ii) or (iii) that the election or nomination of an
individual be by a majority of the board for other governing body shall not
apply in the case of a replacement of a member whose seat becomes vacant as a
result of death or disability.


 


“Closing
Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.


 


“Code”
means the Internal Revenue Code of 1986.


 


“Collateral”
means any collateral in which a Lien is granted by any Person to the Administrative
Agent to secure the Obligations pursuant to the Collateral Documents.


 


“Collateral
Documents” means the Security Agreements, the Deeds of Trust, and other
documents, instruments and agreements granting or perfecting any Lien to secure
the Obligations, and any other agreement executed, delivered or performable by
any Loan Party as security for the Obligations.


 


“Commitment”
means, as to each Lender, its obligation to (a) make Loans to the Borrower
pursuant to Section 2.01, (b) purchase participations in L/C
Obligations, and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
or in any amendment hereto, as applicable, as such amount may be adjusted from
time to time in accordance with this Agreement.


 


“Commitment
Fee” has the meaning specified in Section 2.09(a).


 


“Compliance
Certificate” means a certificate substantially in the form of Exhibit B,
with such changes, or in such other form, as agreed to by the Administrative
Agent.


 


“Contractual
Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.


 


“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto. 
Without limiting the generality of the foregoing, a Person shall be
deemed to


 


12





















 


be Controlled
by another Person if such other Person possesses, directly or indirectly, power
to vote 10% or more of the Voting Shares of such Person.


 


“Core
Acquisition” means any Acquisition of a funeral home, cemetery, or related
business.


 


“Covered
Capital Stock” means all of the issued and outstanding Capital Stock of a
Subsidiary (other than the Trust Subsidiary) held by the Borrower or another
Subsidiary, excluding Capital Stock described in clauses (a) through (c) of
Section 7.12.


 


“Credit
Extension” means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.


 


“Debt”
means, as to any Person at a particular time, without duplication, all of the
following whether or not included as liabilities or indebtedness in accordance
with GAAP: (a) the outstanding principal amount of all obligations of such
Person, whether current or long-term, for borrowed money (including Obligations
hereunder) and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments; (b) obligations of such Person to
pay the deferred purchase price of property or services (other than trade
payables in the ordinary course of business), including without limitation,
Deferred Purchase Price; (c) all direct obligations of such Person arising
under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds (provided an amount is owing by such
Person in respect of any surety bond as a result of a claim made with respect
thereto) and similar instruments, (d) all net obligations of such Person
under any Swap Contracts; (e) all Attributable Indebtedness of such Person
in respect of Capital Leases and Synthetic Lease Obligations, (f) Pre-need
Obligations, except to the extent that Pre-Need Obligations are trusted or
covered by insurance; (g) without duplication, all Guaranty Obligations of
such Person with respect to outstanding Debt of the types specified in
clauses (a) through (f) above of Persons other than the Borrower
or any Subsidiary; (h) all Debt of the types referred to in clauses (a) through
(g) above of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which the Borrower
or a Subsidiary is a general partner or joint venturer, unless such Debt is
expressly made non-recourse to the Borrower or such Subsidiary; (i) all
liabilities of such Person in respect of unfunded vested benefits under any
Plan subject to Title IV of ERISA or Section 412 of the Code; and
(j) all indebtedness or obligations of others of the kinds referred to in
clauses (a) through (h) secured by any Lien on or in respect of
any property of such Person, up to (but not exceeding) the value of such
property.  The amount of any net
obligation under any Swap Contract on any date shall be deemed to be the Swap
Termination Value thereof as of such date. 
The amount of any Capital Lease or Synthetic Lease Obligation as of any
date shall be deemed to be the amount of Attributable Indebtedness in respect
thereof as of such date.


 


“Debt
Documents” has the meaning specified in Section 8.01(l).


 


“Debtor
Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the


 


13





















 


United States
or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.


 


“Deed of
Trust” means any Deed of Trust, Mortgage or similar instrument under which
a Lien may be granted against real property, duly executed by one or more of
the Loan Parties, covering any of the Real Property Collateral, in
substantially the form of Exhibit C hereto, appropriately conformed
to the particular requirements of each applicable jurisdiction.


 


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


 


“Default
Rate” means (a) when used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to the lesser of (a) the
Highest Lawful Rate and (b) the sum of (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2%
per annum; provided, however, that with respect to a Eurodollar
Rate Loan, the Default Rate shall be an interest rate equal to the interest
rate (including any Applicable Rate) otherwise applicable to such Loan plus 2%
per annum and (b) when used with respect to Letter of Credit Fees, a rate
equal to the Applicable Rate plus 2% per annum, in each case to the fullest
extent permitted by Applicable Laws and not in any event to exceed the Highest
Lawful Rate.


 


“Defaulting
Lender” means any Lender that (a) has failed to fund any portion of
the Loans, participations in L/C Obligations or participations in Swing Line
Loans required to be funded by it hereunder within one Business Day of the date
required to be funded by it hereunder, (b) has otherwise failed to pay
over to the Administrative Agent or any other Lender any other amount required
to be paid by it hereunder within one Business Day of the date when due, unless
the subject of a good faith dispute, or (c) has been deemed insolvent or
become the subject of a bankruptcy or insolvency proceeding.


 


“Deferred
Purchase Price” means any purchase price or other consideration, including
payments under agreements not to compete, payable to the sellers in an
Acquisition (whether consummated before or after the date of this Agreement)
after consummation of such Acquisition, whether evidenced by notes, debentures
or the contractual promise to pay on a deferred basis.


 


“Disposition”
or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction, but excluding the
issuance of any Capital Stock of the Borrower) of any property by any Person,
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith.


 


“Dividends”,
in respect of any Person, means (a) cash dividends or any other
distributions of property, or otherwise, on, or in respect of, any class of
Capital Stock of such Person (other than dividends or other distributions
payable solely in Capital Stock of such Person or options, warrants or other
rights to purchase Capital Stock of such Person), and (b) any and all
funds, cash or other payments made in respect of the redemption, repurchase or
acquisition of such Capital Stock (specifically including, without limitation,
a Treasury Stock Purchase), unless such Capital Stock shall be redeemed or
acquired through the exchange of such Capital Stock with


 


14





















 


Capital Stock
of the same or another class or options or warrants to purchase such Capital
Stock or Capital Stock of another class.


 


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


 


“Dollar
Equivalent” means for all purposes of this Agreement, the equivalent in
another currency of an amount in Dollars to be determined by reference to the
rate of exchange quoted by Bank of America, at 10:00 a.m. on the date of
determination, for the spot purchase in the foreign exchange market of such
amount of Dollars with such other currency.


 


“Domestic
Subsidiary” means any Subsidiary that is organized under the laws of any
political subdivision of the United States.


 


“EBITDA”
means, for any period, for the Borrower and its Subsidiaries on a consolidated
basis, an amount equal to Net Income for such period plus (a) the
following to the extent deducted in calculating such Net Income: (i) Interest
Expense for such period, (ii) the provision for federal, state, local and
foreign income taxes payable by the Borrower and its Subsidiaries for such
period, (iii) depreciation and amortization expense and payments in
respect of Deferred Purchase Price, and (iv) other expenses of the
Borrower and its Subsidiaries reducing such Net Income which do not represent a
cash item in such period or any future period and minus (b) all
non-cash items increasing Net Income for such period.


 


“Eligible
Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an
Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, the L/C Issuer and the Swing
Line Lender, and (ii) unless an Event of Default has occurred and is continuing,
the Borrower (each such approval not to be unreasonably withheld or delayed); provided
that notwithstanding the foregoing, “Eligible Assignee” shall not
include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.


 


“Environmental
Laws” means any and all Federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.


 


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


 


“Environmental
Permit” means any permit, license, order, approval or other authorization
under Environmental Law material to business of the Borrower.


 


15





















 


“ERISA”
means the Employee Retirement Income Security Act of 1974.


 


“ERISA
Affiliate” means any trade or business (whether or not incorporated) under
common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).


 


“ERISA
Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Sections 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or Multiemployer
Plan; or (f) the imposition of any liability under Title IV of ERISA,
other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.


 


“Eurodollar
Rate” means for any Interest Period with respect to a Eurodollar Rate Loan,
the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent
from time to time) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, for Dollar deposits
(for delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period.  If such rate is
not available at such time for any reason, then the “Eurodollar Rate”
for such Interest Period shall be the rate per annum determined by the
Administrative Agent to be the rate at which deposits in Dollars for delivery
on the first day of such Interest Period in same day funds in the approximate
amount of the Eurodollar Rate Loan being made, continued or converted by Bank
of America and with a term equivalent to such Interest Period would be offered
by Bank of America’s London Branch to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m. (London time)
two Business Days prior to the commencement of such Interest Period.


 


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


 


“Event of
Default” has the meaning specified in Section 8.01.


 


“Excluded
Capital Stock” means, with respect to the Borrower, any class of Capital
Stock that is subject to mandatory dividend accrual or payment or mandatory
redemption, repurchase, repayment, refunding, or similar provisions or
arrangements, including preferred stock to the extent it does not constitute
Qualified Preferred Stock.


 


16





















 


“Excluded
Real Property” means any interests in real property not constituting Real
Property Collateral.


 


“Excluded
Taxes” means, with respect to the Administrative Agent, any Lender, the L/C
Issuer or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) taxes imposed on or measured by
its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable Lending Office is located, (b) any branch profits taxes
imposed by the United States or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 10.13), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes
a party hereto (or designates a new Lending Office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with Section 3.01(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a).


 


“Existing
Credit Agreement” means the Credit Agreement dated as of August 4,
2003 among the Borrower, Bank of America, as administrative agent, swingline
lender and l/c issuer, Wells Fargo Bank, National Association, as syndication
agent and the other lenders party thereto, as amended, modified or
supplemented.


 


“Existing
Letters of Credit” means the Letters of Credit issued under the Existing Credit
Agreement and listed on Schedule 2.03.


 


“Existing
Preferred Stock” means the preferred stock of the Borrower which is
outstanding on the date of this Agreement and listed on Schedule 1.01.


 


“Existing
Trusting Laws” has the meaning specified in Section 6.14.


 


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


 


“Fee Letter”
means the letter agreement, dated January 5, 2005, among the Borrower, the
Administrative Agent and the Arranger, and any other fee letter entered into
from time to time among the Administrative Agent, the Borrower and the
Arranger, or any of them.


 


17





















 


“Fixed
Charge Coverage Ratio” means, for any period of determination, for the
Borrower and its Subsidiaries, on a consolidated basis, the ratio of (a) the
sum of (i) EBITDA for such period minus (ii) Capital
Expenditures for such period minus (iii) the cash taxes paid during
such period plus (iv) any cash tax refunds received during such
period to (b) the sum of (i) cash Interest Expense during such period
(other than (x) the Make-Whole Premium paid to the holders of the Old
Senior Notes that were retired in January 2005 and (y) the amount of
Trust Preferred Interest Deferral paid in March 2005 in respect of
interest deferred from September 2003 through December 2004), plus
(ii) scheduled and required principal payments during such period in
respect of Debt (other than scheduled and required principal payments on the
Old Senior Notes) plus, (iii) to the extent not included in
subclause (i) or (ii) above of this clause (b), scheduled
and required payments made by the Borrower in respect of Deferred Purchase
Price for such period.


 


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


 


“Foreign
Subsidiary” means each Subsidiary of the Borrower which is organized under
the laws of a jurisdiction other than the United States of America or any State
thereof.


 


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


 


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


 


“GAAP”
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board and the SEC related
to accounting principles or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are
applicable to the circumstances as of the date of determination, consistently
applied.


 


“Governmental
Authority” means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).


 


“Guarantors”
means, collectively, each direct or indirect Domestic Subsidiary of the
Borrower other than (i) the Trust Subsidiary and (ii) all
Unrestricted Subsidiaries.


 


“Guaranty”
means the Guaranty made by the Guarantors in favor of the Administrative Agent
on behalf of the Lenders, substantially in the form of Exhibit D.


 


18





















 


“Guaranty
Obligation” means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Debt or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Debt or other obligation of the payment or performance of such Debt or
other obligation, (iii) to maintain working capital, equity capital or any
other financial statement condition or liquidity or level of income or cash
flow of the primary obligor so as to enable the primary obligor to pay such
Debt or other obligation, or (iv) entered into for the purpose of assuring
in any other manner the obligee in respect of such Debt or other obligation of
the payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of
such Person securing any Debt or other obligation of any other Person, whether
or not such Debt or other obligation is assumed by such Person; provided,
however, that the term “Guaranty Obligation” does not include
endorsements of instruments for deposit or collection in the ordinary course of
business.  The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of which
such Guaranty Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith.  The
term “Guarantee” as a verb has a corresponding meaning.


 


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


 


“Highest
Lawful Rate” means at the particular time in question the maximum rate of
interest which, under Applicable Law, any Lender is then permitted to charge on
the Obligations.  If the maximum rate of
interest which, under Applicable Law, any Lender is permitted to charge on the
Obligations shall change after the date hereof, the Highest Lawful Rate shall
be automatically increased or decreased, as the case may be, from time to time
as of the effective time of each change in the Highest Lawful Rate without
notice to the Borrower.  For purposes of
determining the Highest Lawful Rate under Applicable Law, on each day, if any,
that Chapter 303 of the Texas Finance Code establishes the Highest Lawful
Rate, such rate shall be the weekly ceiling computed in accordance with Section 303.003
for that day.


 


“Honor Date”
has the meaning specified in Section 2.03(c)(i).


 


“Increase Effective
Date” has the meaning specified in Section 2.14(d).


 


“Indemnified
Taxes” means Taxes other than Excluded Taxes.


 


“Indemnitee”
has the meaning specified in Section 10.04(b).


 


“Information”
has the meaning specified in Section 10.07.


 


19





















 


“Interest
Expense” means, with respect to the Borrower and its Subsidiaries and for
any period of determination, the interest expense of the Borrower and its
Subsidiaries for such period, whether paid or accrued (including that
attributable to obligations which have been or should be, in accordance with
GAAP, recorded as Capital Leases), including, without limitation, all
commissions, discounts and other fees and charges owed with respect to debt for
borrowed money, letters of credit and bankers’ acceptance financing and net
costs under any Swap Contracts, all as determined in accordance with GAAP.  Interest Expense for a period also includes
the aggregate amount of Restricted Payments declared or paid by the Borrower during
such period, exclusive of any Restricted Payments with respect to the Trust
Preferred Stock to the extent the inclusion thereof would be duplicative with
any interest expense attributable to the Trust Notes.


 


“Interest
Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a
Eurodollar Rate Loan exceeds three months, the respective dates that fall every
three months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line
Loan), the last Business Day of each March, June, September and December and
the Maturity Date.


 


“Interest
Period” means, as to each Eurodollar Rate Loan, the period commencing on
the date such Eurodollar Rate Loan is disbursed or converted to or continued as
a Eurodollar Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrower in its Revolving Loan Notice; provided
that:


 


(i)                                     any
Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end
on the next preceding Business Day;


 


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


 


(iii)                               no
Interest Period shall extend beyond the Maturity Date.


 


“Internal
Control Event” means, whenever Borrower is subject to Section 404 of
Sarbanes-Oxley, a determination pursuant to said Section 404 by Borrower’s
management or Registered Public Accounting Firm that a material weakness in, or
fraud that involves management or other employees who have a significant role
in, the Borrower’s internal controls over financial reporting, in each case as
described in the Securities Laws, has occurred.


 


“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
Capital Stock or other securities of another Person, (b) a loan, advance
or capital contribution to, Guarantee or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other


 


20





















 


Person and any
arrangement pursuant to which the investor Guarantees Debt of such other
Person, or (c) the purchase or other acquisition (in one transaction or a
series of transactions) of assets of another Person that constitute a business
unit.  For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.


 


“IP Rights”
has the meaning specified in Section 5.17.


 


“IRS”
means the United States Internal Revenue Service.


 


“ISP”
means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).


 


“Issuer
Documents” means with respect to any Letter of Credit, the Letter of Credit
Application, and any other document, agreement and instrument entered into by
the L/C Issuer and the Borrower (or any Subsidiary) or in favor of the L/C
Issuer and relating to any such Letter of Credit.


 


“Joinder
Agreement” means a joinder agreement in the form of the attached Exhibit E
executed by any Subsidiary of the Borrower.


 


“Knowledge”
means, with respect to the Borrower, the actual knowledge of any of the
Borrower’s executive officers, and does not include constructive knowledge.


 


“Laws”
means, collectively, all applicable international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority (other
than any such agreements which are entered into in respect of a commercial
transaction).


 


“L/C
Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable
Percentage.


 


“L/C
Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Borrowing.


 


“L/C Credit
Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the renewal or increase of
the amount thereof.


 


“L/C Issuer”
means Bank of America in its capacity as issuer of Letters of Credit hereunder,
or any successor issuer of Letters of Credit hereunder.


 


“L/C
Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unreimbursed


 


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Amounts, including
all L/C Borrowings.  For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.


 


“Lender”
has the meaning specified in the introductory paragraph hereto and, as the
context requires, includes the L/C Issuer and the Swing Line Lender.


 


“Lending
Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.


 


“Letter of
Credit” means any letter of credit issued hereunder and shall include the Existing
Letters of Credit.  A Letter of Credit
may be a commercial letter of credit or a standby letter of credit.


 


“Letter of
Credit Application” means an application and agreement for the issuance or
amendment of a Letter of Credit in the form from time to time in use by the L/C
Issuer.


 


“Letter of
Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next
preceding Business Day).


 


“Letter of
Credit Fee” has the meaning specified in Section 2.03(i).


 


“Letter of
Credit Sublimit” means an amount equal to $7,500,000.  The Letter of Credit Sublimit is part of, and
not in addition to, the Aggregate Commitments.


 


“Leverage
Ratio” means, as of any date of determination, the ratio of (a) Total
Senior Debt on such date to (b) EBITDA (plus, without duplication,
the EBITDA of such period of any Person or assets acquired by Acquisition
during such period, if so requested by the Borrower, as provided below) for the
period of the four fiscal quarters most recently ended.  For purposes of calculation of the Leverage
Ratio, whether or not the Acquisition is treated as a pooling transaction, the
financial results of the acquired Person or assets shall, if requested in
writing by the Borrower to the Administrative Agent, be added to the applicable
financial results of the Borrower in the same manner as if such transaction
were a pooling transaction with such adjustments thereto as are required to
reflect nonrecurring items (both positive and negative) that were permitted to
be adjusted in accordance with the pro forma financial statement guidelines
previously in effect by the SEC for acquisition accounting for reported
acquisitions by public companies prior to June 30, 2001 or as approved by
the Required Lenders, including addbacks to reflect contractual salary and
other compensation adjustments related to the applicable sellers and related
parties, contractual lease payment adjustments, and other non-recurring
expenses approved by the Required Lenders which are related to the Acquisition,
such as broker commissions and advisory fees. 
With respect to any such Acquisition in which the Borrower so requests
adjustments to reflect such nonrecurring items, the Borrower shall deliver to
the Administrative Agent (promptly, but in any event together with the
Compliance Certificate calculating the inclusion of the financial results of
such Person or assets with the financial results


 


22





















 


of the
Borrower) the financial reports of the acquired Person or assets, which reports
must be (a) audited or reviewed financial reports prepared by an
independent certified public accounting firm, or (b) otherwise approved by
the Required Lenders.


 


“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or
other security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).


 


“Liquid
Investments” means (a) direct or indirect obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States; (b) mutual funds investing in securities
issued by the United States; (c)(i) negotiable or non-negotiable
certificates of deposit, time deposits, or other similar banking arrangements
maturing within 180 days from the date of acquisition thereof (“bank debt
securities”), issued by (a) any Lender or (b) any other bank or trust
company which has either (I) obtained insurance from the Federal Depositor’s
Insurance Corporation supporting such bank’s or trust company’s obligation to
repay the bank debt securities or (II) a combined capital surplus and
undivided profit of not less than $250,000,000 or the Dollar Equivalent
thereof, if at the time of deposit or purchase, such bank debt securities are
rated not less than “A” (or the then equivalent) by the rating service of
Standard & Poor’s Rating Group (a Division of McGraw-Hill, Inc.)
(“S&P”) or of Moody’s Investors Service, Inc. (“Moody’s”),
and (ii) commercial paper issued by (a) any Lender or (b) any
other Person if at the time of purchase such commercial paper is rated not less
than “A-2” (or the then equivalent) by the rating service of S&P or
not less than “P-2” (or the then equivalent) by the rating service of
Moody’s, or upon the discontinuance of both of such services, such other
nationally recognized rating service or services, as the case may be, as shall
be selected by the Borrower with the consent of the Required Lenders; (d) repurchase
agreements relating to investments described in clauses (a) and (c) above
with a market value at least equal to the consideration paid in connection
therewith, with any Person who regularly engages in the business of entering
into repurchase agreements and has a combined capital surplus and undivided
profit of not less than $250,000,000 or the Dollar Equivalent thereof, if at
the time of entering into such agreement the debt securities of such Person are
rated not less than “BBB” (or the then equivalent) by the rating service of
S&P or of Moody’s; (e) money market funds that (i) comply with
the criteria set forth in SEC Rule 2a-7 under the Investment Company
Act of 1940, (ii) are rated AAA by S&P or Aaa by Moody’s and (iii) have
portfolio assets of at least $5,000,000,000; (f) investments in state or
municipal securities or auction rate securities that are rated A-1 by
S&P or P-1 by Moody’s, provided that the Borrower has the right to
put such securities back to the issuer or seller thereof at least once every 60
days; and (g) such other investments as the Borrower may request and the
Administrative Agent may approve in writing, which approval will not be
unreasonably withheld.


 


“Loan”
means an extension of credit by a Lender to the Borrower under Article II
in the form of a Revolving Loan or a Swing Line Loan.


 


“Loan
Documents” means this Agreement, the Notes, each Collateral Document, the
Fee Letter, any Swap Contract entered into with any Lender or any Affiliate of
any Lender, each


 


23





















 


Guaranty, each
Request for Credit Extension, each Compliance Certificate, and any other
agreement executed, delivered or performable by any Loan Party in connection
herewith or as security for the Obligations.


 


“Loan
Parties” means, collectively, the Borrower and each Guarantor.


 


“Material
Adverse Effect” means any of the following events: (a) a material
adverse change in, or a material adverse effect upon, the operations, business,
properties, affairs, financial condition, or assets of the Borrower and its
Subsidiaries taken as a whole; (b) the occurrence and continuance of any
event or circumstance which could reasonably be expected to have a material
adverse effect on the Borrower’s ability to perform its obligations under this
Agreement or any other Loan Document, or (c) a material adverse change in,
or a material adverse effect upon, the validity or enforceability of this
Agreement or any other Loan Document.


 


“Maturity
Date” means April 27, 2010; provided that if there occurs a
Trust Preferred Interest Deferral prior to October 27, 2005, the Maturity
Date shall mean October 27, 2009.


 


“Maximum
Amount” means the maximum amount of interest which, under Applicable Law, a
Lender is permitted to charge on the Obligations.


 


“Multiemployer
Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of
ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to
make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.


 


“Net Cash
Proceeds” means, with respect to the sale of any asset by the Borrower or
any Subsidiary (including Capital Stock), the excess, if any, of (i) the
sum of cash and cash equivalents received in connection with such sale
(including any cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise, but only as and when so
received) over (ii) the sum of (A) the principal amount of any Debt
that is secured by such asset and that is required to be repaid in connection
with the sale thereof (other than Debt under the Loan Documents), (B) the
out-of-pocket expenses incurred by the Borrower or any Subsidiary in connection
with such sale and (C) income taxes reasonably estimated to be actually
payable within two years of the date of the relevant asset sale as a result of
any gain recognized in connection therewith.


 


“Net Income”
means, with respect to the Borrower and its Subsidiaries on a consolidated
basis, and for any period of determination, the net income of the Borrower and
its Subsidiaries for such period, as determined in accordance with GAAP,
excluding, however, extraordinary items, such as (i) any net gain or loss
during such period arising from the sale, exchange, or other disposition of
capital assets (such term to include all fixed assets and all securities) other
than in the ordinary course of business and (ii) any write-up of assets.


 


“Net
Recovery Proceeds” means, with respect to any Recovery Event, the gross
cash proceeds (net of reasonable fees, costs and taxes actually incurred and
paid in connection with such Recovery Event and any required permanent payment
of Indebtedness (other than Indebtedness secured pursuant to the Collateral Documents)
which is secured by the property


 


24





















 


that is the
subject of such Recovery Event) received by the respective Person in connection
with such Recovery Event.


 


“Net Worth”
means, with respect to the Borrower and its Subsidiaries on a consolidated
basis and for any time of determination, the sum of (a) the par value (or
value stated on the books of the Borrower and its Subsidiaries) of all classes
of Capital Stock of the Borrower and its Subsidiaries other than Excluded
Capital Stock, (b) the additional paid-in capital of the Borrower and its
Subsidiaries allocable to all classes of Capital Stock of the Borrower and its
Subsidiaries other than Excluded Capital Stock, (c) to the extent not
already included in (a) or (b), the par value (or value stated on the
books of the Trust Subsidiary), and the additional paid-in capital, of the
Trust Preferred Stock, and (d) the amount of the surplus and retained
earnings, whether capital or earned, of the Borrower and its Subsidiaries, all
determined in accordance with GAAP.


 


“Notes”
means the Revolving Loan Notes and the Swing Line Loan Note, and “Note”
means a Revolving Loan Note or the Swing Line Loan Note, or any of them, as
applicable in the context used.


 


“Obligations”
means all advances to, and debts, liabilities, obligations, covenants and
duties of, any Loan Party arising under any Loan Document or otherwise with
respect to any Loan or Letter of Credit, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due,
now existing or hereafter arising, including all fees, expenses and other
amounts owing to any Lender pursuant to cash management, depository accounts
(including chargebacks) or similar agreements and including interest and fees
that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.


 


“Off-Balance
Sheet Liabilities” means, with respect to any Person as of any date of
determination thereof, without duplication and to the extent not included as a
liability on the consolidated balance sheet of such Person and its Subsidiaries
in accordance with GAAP: (a) with respect to any asset securitization
transaction (including any accounts receivable purchase facility) (i) the
unrecovered investment of purchasers or transferees of assets so transferred,
and (ii) any other payment, recourse, repurchase, hold harmless, indemnity
or similar obligation of such Person or any of its Subsidiaries in respect of
assets transferred or payments made in respect thereof, other than limited
recourse provisions that are customary for transactions of such type and that
neither (x) have the effect of limiting the loss or credit risk of such
purchasers or transferees with respect to payment or performance by the
obligors of the assets so transferred nor (y) impair the characterization
of the transaction as a true sale under applicable Laws (including Debtor
Relief Laws); (b) the monetary obligations under any financing lease or
so-called “synthetic,” tax retention or off-balance sheet lease transaction
which, upon the application of any Debtor Relief Law to such Person or any of
its Subsidiaries, would be characterized as indebtedness; (c) the monetary
obligations under any sale and leaseback transaction which does not create a
liability on the consolidated balance sheet of such Person and its
Subsidiaries; or (d) any other monetary obligation arising with respect to
any other transaction which (i) upon the application of any Debtor Relief
Law to such Person or any of its Subsidiaries, would be characterized as
indebtedness or (ii) is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the consolidated balance


 


25





















 


sheet of such
Person and its Subsidiaries (for purposes of this clause (d), any
transaction structured to provide tax deductibility as interest expense of any
dividend, coupon or other periodic payment will be deemed to be the functional
equivalent of a borrowing).


 


“Old Senior
Notes” mean, collectively, (a) the $25,000,000 7.73% Senior Notes of
the Borrower, Series 1999-A, duly July 30, 2004, (b) the
$60,000,000 7.96% Senior Notes of the Borrower, Series 1999-B, due July 30,
2006, and (c) the $25,000,000 8.06% Senior Notes of the Borrower, Series 1999-C,
due July 30, 2008, and in each case including the unsecured guaranties
thereof executed by certain Subsidiaries of the Borrower.


 


“Organization
Documents” means, (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.


 


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


 


“Outstanding
Amount” means (i) with respect to Revolving Loans and Swing Line Loans
on any date, the aggregate outstanding principal amount thereof after giving
effect to any borrowings and prepayments or repayments of Revolving Loans and Swing
Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations
on such date after giving effect to any L/C Credit Extension occurring on such
date and any other changes in the aggregate amount of the L/C Obligations as of
such date, including as a result of any reimbursements by the Borrower of
Unreimbursed Amounts.


 


“Participant”
has the meaning specified in Section 10.06(d).


 


“PBGC”
means the Pension Benefit Guaranty Corporation.


 


“Pension
Plan” means any “employee pension benefit plan” (as such term is defined in
Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the
Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has
made contributions at any time during the immediately preceding five plan
years.


 


“Permitted
Liens” means those Liens set forth in paragraph (a) through (j)
of Section 7.01.


 


26





















 


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


 


“Plan”
means any “employee benefit plan” (as such term is defined in Section 3(3) of
ERISA) established by the Borrower or, with respect to any such plan that is
subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.


 


“Platform”
has the meaning specified in Section 6.02.


 


“Pre-need
Obligations” means the liabilities and obligations of the Borrower and its
Subsidiaries to perform funeral or cemetery related services or provide funeral
or cemetery property, merchandise or inventory pursuant to written contracts
with their customers.


 


“Property”
of any Person means any property or assets (whether real, personal, or mixed,
tangible or intangible) of such Person.


 


“Pro Rata
Percentage” has the meaning specified in Section 2.05(d).


 


“Qualified
Preferred Stock” means:


 


(a)                                  Trust
Preferred Stock; and


 


(b)                                 Redeemable
Preferred Stock issued after August 13, 1996, that provides (i) for
its mandatory redemption on a date, if at all, that is on or after the first
anniversary of the Maturity Date, as the same may be extended from time to
time, and (ii) that no holder of such shares will be entitled to retain or
receive Restricted Payments in respect of such shares for a period of not less
than 180 days after receipt by such holder of written notice from any Lender or
the Borrower that an Event of Default hereunder has occurred and is then
continuing and that such payments should be blocked, and indefinitely, for so
long as there shall exist any default in the payment of any Obligations,
whether by maturity, acceleration, or otherwise, all such provisions to be in
form and content reasonably acceptable to the Administrative Agent.


 


“Real
Property Collateral” means all interests in real property owned or leased
by the Borrower or a Domestic Subsidiary on the Closing Date that is used in or
incident to a funeral home or related business anywhere in the States of
California, Connecticut or Texas, together with additional real property
substituted as Collateral in accordance with Section 7.05(e).


 


“Recovery
Event” means the receipt by any Loan Party of any cash insurance proceeds
or condemnation awards payable (i) by reason of theft, loss, physical
destruction, damage, taking or any other similar event with respect to any
Property or assets of any Loan Party and (ii) under any policy of
insurance required to be maintained under any Loan Document.


 


“Redeemable
Preferred Stock” means shares of the Borrower’s preferred stock which by
its terms requires or permits the Borrower to redeem such shares.


 


“Register”
has the meaning specified in Section 10.06(c).


 


27





















 


“Registered
Public Accounting Firm” has the meaning specified in the Securities Laws
and shall be independent of the Borrower as prescribed by the Securities Laws.


 


“Release”
shall have the meaning set forth in CERCLA or under any other Environmental
Law.


 


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


 


“Reportable
Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.


 


“Request
for Credit Extension” means (a) with respect to a Revolving Borrowing,
or a conversion or continuation of Revolving Loans, a Revolving Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice.


 


“Required
Lenders” means, as of any date of determination, Lenders having at least 66-2/3%
of the Aggregate Commitments or, if the commitment of each Lender to make
Revolving Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, Lenders
holding in the aggregate at least 66-2/3% of the Total Outstandings (with
the aggregate amount of each Lender’s risk participation and funded
participation in L/C Obligations and Swing Line Loans being deemed “held” by
such Lender for purposes of this definition); provided that (i) the
Commitment of, and the portion of the Total Outstandings held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders, and (ii) Required Lenders shall never
mean less than two Lenders.


 


“Response”
shall have the meaning set forth in CERCLA or under any other Environmental
Law.


 


“Responsible
Officer” means the chief executive officer, president, chief financial
officer, treasurer or assistant treasurer of a Loan Party.  Any document delivered hereunder that is
signed by a Responsible Officer of a Loan Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Loan Party.


 


“Restricted
Payment” means (a) any Dividend, or (b) any payment or prepayment
of principal, interest, premium or penalty of or in respect of any Subordinated
Debt or any defeasance, redemption, purchase, repurchase or other acquisition
or retirement for value, in whole or in part, of any of the Subordinated Debt.


 


“Revolving
Borrowing” means a borrowing consisting of simultaneous Revolving Loans of
the same Type and, in the case of Eurodollar Rate Loans, having the same
Interest Period made by each of the Lenders pursuant to Section 2.01.


 


28





















 


“Revolving
Loan” has the meaning specified in Section 2.01.


 


“Revolving
Loan Note” means a promissory note made by the Borrower in favor of a
Lender evidencing Revolving Loans made by such Lender, substantially in the
form of Exhibit G.


 


“Revolving
Loan Notice” means a notice of (a) a Revolving Borrowing, (b) a
conversion of Revolving Loans from one Type to the other, or (c) a
continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a),
which, if in writing, shall be substantially in the form of Exhibit H,
or in any other form acceptable to the Administrative Agent.


 


“Sarbanes-Oxley”
means the Sarbanes-Oxley Act of 2002.


 


“SEC”
means the Securities and Exchange Commission, or any Governmental Authority
succeeding to any of its principal functions.


 


“Secured
Lenders” means the Administrative Agent, the Lenders and any Affiliate of a
Lender or party to a Swap Contract between the Borrower or any Subsidiary, provided
that such Lender was a Lender hereunder at the time such Swap Contract was
entered into.


 


“Securities
Laws” means the Securities Act of 1933, the Securities Exchange Act of
1934, Sarbanes-Oxley and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the Public Company Accounting Oversight Board, as each of the foregoing may
be amended and in effect on any applicable date hereunder.


 


“Security
Agreement” means any Security Agreements executed by one or more the Loan
Parties, substantially in the form of Exhibit I, appropriately
completed, as amended, modified, substituted, replaced or extended from time to
time.


 


“Senior
Note Prepayment” has the meaning specified in Section 7.16.


 


“Senior
Notes” means the $130,000,000 in original principal amount of 7.875% Senior
Notes of the Borrower issued on or about January 27, 2005, and including
the unsecured guaranties thereof executed by certain Subsidiaries of the
Borrower, and all reissues and replacements of the foregoing, subject to Section 7.15.


 


“Solvent”
means, with respect to any Person, as of any date of determination, that the
fair value of the assets of such Person (at fair valuation) is, on the date of
determination, greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such Person as of such date, that
the present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the probable
liability of such Person on its debt as such debt become absolute and matured,
and that, as of such date, such Person will be able to pay all liabilities of
such Person as such liabilities mature and such Person does not have
unreasonably small capital with which to carry on its business.  In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at such
time, represents the amount that


 


29





















 


can reasonably
be expected to become an actual or matured liability discounted to present
value at rates believed to be reasonable by such Person.


 


“Subordinated
Debt” means, with respect to the Borrower and as of any date of its
issuance, any unsecured indebtedness for borrowed money for which the Borrower
is directly and primarily obligated that is expressly subordinated to the
Obligations and is approved by the Required Lenders in their sole discretion
that (a) arises after the date of this Agreement, (b) does not have
any stated maturity before the latest maturity of any of the Obligations, (c) has
terms that are no more restrictive than the terms of the Loan Documents, and (d) has
payment and other terms satisfactory to the Required Lenders in their sole discretion.


 


“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by such
Person. .  Notwithstanding the forgoing,
each of CSI Funeral Services of Massachusetts, Inc., a Massachusetts
corporation, and Forastiere Family Funeral Service, Inc., a Massachusetts
corporation, shall be deemed to be a Subsidiary.  Unless otherwise specified, all references
herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of the Borrower; provided an Unrestricted Subsidiary shall
not be a Subsidiary.


 


“Swap
Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.


 


“Swap
Obligations” means any and all obligations of the Borrower or any
Subsidiary to any Lender or any Affiliate of a Lender in respect of a Swap
Contract.


 


“Swap
Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for
any date prior to the date referenced in clause (a), the amount(s)
determined as the mark-to-


 


30





















 


market value(s)
for such Swap Contracts, as determined based upon one or more mid-market or
other readily available quotations provided by any recognized dealer in such
Swap Contracts (which may include a Lender or any Affiliate of a Lender).


 


“Swing Line”
means the revolving credit facility made available by the Swing Line Lender
pursuant to Section 2.04.


 


“Swing Line
Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.


 


“Swing Line
Lender” means Bank of America in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.


 


“Swing Line
Loan” has the meaning specified in Section 2.04(a).


 


“Swing Line
Note” means a promissory note made by the Borrower in favor of the Swing
Line Lender evidencing Swing Line Loans made by such Lender, substantially in
the form of Exhibit J.


 


“Swing Line
Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b),
which, if in writing, shall be substantially in the form of Exhibit K.


 


“Swing Line
Sublimit” means an amount equal to the lesser of (a) $5,000,000 and (b) the
Aggregate Commitments.  The Swing Line
Sublimit is part of, and not in addition to, the Aggregate Commitments.


 


“Synthetic
Lease Obligation” means the monetary obligation of a Person under (a) a
so-called synthetic, off-balance sheet or tax retention lease, or (b) an
agreement for the use or possession of property creating obligations that do
not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of
such Person (without regard to accounting treatment).


 


“Taxes”
means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable thereto.


 


“Total
Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.


 


“Total
Senior Debt” means, at any time, an amount equal to the remainder of (a) Debt
of the Borrower and its Subsidiaries minus (b) all Subordinated Debt
of the Borrower and its Subsidiaries (including the Trust Notes) minus (c) unrestricted
cash and Liquid Investments of the Borrower and its Subsidiaries in excess of
$5,000,000.


 


“Treasury
Stock Purchase” means any purchase, redemption, retirement, defeasance or
other acquisition (including any sinking fund or similar deposit for such
purpose) by the Borrower or any Subsidiary of its Capital Stock or any
warrants, rights or options to acquire such Capital Stock.


 


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“Trust
Accounts” means, collectively, those certain perpetual care trust, pre-need
trust, pre-construction trust or other trust arrangements established by the
Borrower as required to be established and maintained in accordance with
Applicable Law.


 


“Trust
Guaranties” means, collectively, the Borrower’s guaranties of the
obligations of the Trust Subsidiary in respect of the Trust Preferred Stock,
the common securities of the Trust Subsidiary, and the expenses of the Trust
Subsidiary incurred in connection with the foregoing.


 


“Trust
Notes” means the Convertible Junior Subordinated Debentures Due 2029
issued by the Borrower in the original principal amount of the Trust Preferred
Stock.


 


“Trust
Preferred Interest Deferral” means any deferral of interest payments by the
Borrower in respect of the Trust Notes in accordance with the provisions
governing such Trust Notes.


 


“Trust
Preferred Stock” means the 7% Convertible Preferred Securities, Term Income
Deferrable Equity Securities issued by the Trust Subsidiary.


 


“Trust
Reserves” means, at the time of any determination thereof, in connection
with the Trust Accounts, the aggregate of all amounts required by Applicable
Law to be set aside in reserve, trust, escrow or any similar arrangement, and
in respect to any jurisdiction in which the Applicable Laws do not require the
trusting of any such funds, then 100% of the funds received pursuant to each
Trust Account.


 


“Trust
Subsidiary” means Carriage Services Capital Trust, a statutory business
trust formed under the laws of the State of Delaware.


 


“Type”
means, with respect to a Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.


 


“UCC”
means the Uniform Commercial Code of Texas or, where applicable to specific
Collateral, any other relevant state.


 


“Unfunded
Pension Liability” means the excess of a Pension Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Pension
Plan’s assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.


 


“United
States” and “U.S.” mean the United States of America.


 


“Unreimbursed
Amount” has the meaning specified in Section 2.03(c)(i).


 


“Unrestricted
Subsidiary” means any Person so designated by the Borrower in writing to
the Administrative Agent; provided  that a majority of such Person’s
outstanding Voting Shares, but less than 100% of such Voting Shares, is owned
by the Borrower or one or more of its Subsidiaries.


 


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“Voting
Shares” of any Person means Capital Stock of any class or classes having
ordinary voting power for the election of at least a majority of the members of
the board of directors, managing general partners or the equivalent governing
body of such Person, irrespective of whether, at the time, Capital Stock of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency.


 


1.02                           Other Interpretive Provisions.  With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:


 


(a)                                  The
definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include,”
“includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document
(including any Organization Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein,”
“hereof” and “hereunder” and words of similar import when used in
any Loan Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, the Loan
Document in which such references appear, (v) any reference to any law
shall include all statutory and regulatory provisions consolidating, amending,
replacing or interpreting such law and any reference to any law or regulation
shall, unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words “asset”
and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.


 


(b)                                 In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including;” the words “to”
and “until” each mean “to but excluding;” and the word “through”
means “to and including.”


 


(c)                                  Section headings
herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any
other Loan Document.


 


1.03                           Accounting Terms.


 


(a)                                  Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as


 


33





















 


in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.


 


(b)                                 Changes
in GAAP.  If at any time any change
in GAAP or in the application of GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in (or in the application of) GAAP (subject to the approval of the Required
Lenders); provided  that, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Borrower shall provide to the Administrative
Agent and the Lenders financial statements and other documents required under
this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in (or in the application of) GAAP as is
reasonably necessary to demonstrate compliance (or non-compliance) with such
ratio or requirement.


 


(c)                                  Consolidation
of Variable Interest Entities.  All
references herein to consolidated financial statements of the Borrower and its
Subsidiaries or to the determination of any amount for the Borrower and its
Subsidiaries on a consolidated basis or any similar reference shall, in each
case, be deemed to include each variable interest entity that the Borrower is
required to consolidate pursuant to FASB Interpretation No. 46 (revised December 2003)
– Consolidation of Variable Interest Entities: an interpretation of ARB No. 51
(revised December 2003) as if such variable interest entity were a
Subsidiary as defined herein.


 


(d)                                 Notwithstanding
the foregoing, the Trust Preferred Stock, Trust Notes and Trust Guaranties
shall be treated in the manner described in this Agreement regardless of any
changes in GAAP which requires the Borrower to characterize or represent them
differently for financial reporting or other applicable purposes.


 


1.04                           Rounding. 
Any financial ratios required to be maintained by the Borrower pursuant
to this Agreement shall be calculated by dividing the appropriate component by
the other component, carrying the result to one place more than the number of
places by which such ratio is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).


 


1.05                           Times of Day.  Unless otherwise specified, all references
herein to times of day shall be references to Central time (daylight or
standard, as applicable).


 


1.06                           Letter of Credit Amounts.  Unless otherwise specified herein, the amount
of a Letter of Credit at any time shall be deemed to be the stated amount of
such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Document related thereto, provides for one or more automatic increases in the stated
amount thereof, the amount of such Letter of Credit shall be deemed to be


 


34





















 


the maximum stated amount of such Letter of
Credit after giving effect to all such increases, whether or not such maximum stated
amount is in effect at such time.


 


1.07                           References to Agreements and Laws.  Unless otherwise expressly provided herein, (a) references
to Organization Documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto, but only
to the extent that such amendments, restatements, extensions, supplements and
other modifications are not prohibited by any Loan Document; and (b) references
to any Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.


 


ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS


 


2.01                           Revolving Loans.  Subject to the terms and conditions set forth
herein, each Lender severally agrees to make revolving loans (each such loan, a
“Revolving Loan”) to the Borrower from time to time, on any Business Day
during the Availability Period, in an aggregate amount not to exceed at any
time outstanding the amount of such Lender’s Commitment; provided, however,
that after giving effect to any Revolving Borrowing, (i) the Total
Outstandings shall not exceed the Aggregate Commitments, and (ii) the
aggregate Outstanding Amount of the Revolving Loans of any Lender, plus
such Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Commitment.  Within the limits of each Lender’s
Commitment, and subject to the other terms and conditions hereof, the Borrower
may borrow under this Section 2.01, prepay under Section 2.05,
and reborrow under this Section 2.01.  Revolving Loans may be Base Rate Loans or Eurodollar
Rate Loans, as further provided herein.


 


2.02                           Borrowings, Conversions and Continuations of Loans.


 


(a)                                  Each
Borrowing, each conversion of Loans from one Type to the other, and each
continuation of Eurodollar Rate Loans shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by
telephone.  Each such notice must be
received by the Administrative Agent not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing
of Base Rate Loans.  Each such telephonic
notice by the Borrower pursuant to this Section 2.02(a) must
be confirmed promptly by delivery to the Administrative Agent of a written
Revolving Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower.  Each Borrowing
of, conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof.  Except as provided in Sections 2.03(c) and
2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in
a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof.  Each Revolving Loan Notice
(whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Borrowing, a conversion of Loans


 


35





















 


from one Type to the other, or a continuation
of Eurodollar Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Loans to be borrowed, converted or continued,
(iv) the Type of Loans to be borrowed or to which existing Loans are to be
converted, and (v) if applicable, the duration of the Interest Period with
respect thereto.  If the Borrower fails
to specify a Type of Loan in a Revolving Loan Notice or if the Borrower fails
to give a timely notice requesting a conversion or continuation, then the
applicable Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Revolving
Loan Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.


 


(b)                                 Following
receipt of a Revolving Loan Notice, the Administrative Agent shall promptly
notify each Lender of the amount of its Applicable Percentage of the applicable
Loans, and if no timely notice of a conversion or continuation is provided by
the Borrower, the Administrative Agent shall notify each Lender of the details
of any automatic conversion to Base Rate Loans described in the preceding
subsection.  In the case of a Revolving Borrowing,
each Lender shall make the amount of its Loan available to the Administrative
Agent in immediately available funds at the Administrative Agent’s Office not
later than 1:00 p.m. on the Business Day specified in the applicable
Revolving Loan Notice.  Upon satisfaction
of the applicable conditions set forth in Section 4.02 (and, if
such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance
with instructions provided to (and reasonably acceptable to) the Administrative
Agent by the Borrower; provided, however, that if, on the date
the Revolving Loan Notice with respect to such Revolving Borrowing is given by
the Borrower, there are L/C Borrowings outstanding, then the proceeds of such
Borrowing, first, shall be applied to the payment in full of any such
L/C Borrowings, and second, shall be made available to the Borrower as
provided above.


 


(c)                                  Except
as otherwise provided herein, a Eurodollar Rate Loan may be continued or
converted only on the last day of an Interest Period for such Eurodollar Rate
Loan.  During the existence of a Default,
no Loans may be requested as, converted to or continued as Eurodollar Rate
Loans without the consent of the Required Lenders.


 


(d)                                 The
Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for Eurodollar Rate Loans upon
determination of such interest rate.  The
determination of the Eurodollar Rate by the Administrative Agent shall be conclusive
in the absence of manifest error.  At any
time that Base Rate Loans are outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America’s prime
rate used in determining the Base Rate promptly following the public
announcement of such change.


 


36





















 


(e)                                  After
giving effect to all Borrowings, all conversions of Loans from one Type to the
other, and all continuations of Loans as the same Type, there shall not be more
than eight Interest Periods in effect with respect to all Loans.


 


2.03                           Letters of Credit.


 


(a)                                  The
Letter of Credit Commitment.


 


(i)                                     Subject
to the terms and conditions set forth herein, (A) the L/C Issuer agrees,
in reliance upon the agreements of the Lenders set forth in this Section 2.03,
(1) from time to time on any Business Day during the period from the
Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Borrower or its Subsidiaries, and to amend or
extend Letters of Credit previously issued by it, in accordance with subsection (b) below,
and (2) to honor drawings under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrower or its Subsidiaries and
any drawings thereunder; provided that after giving effect to any L/C
Credit Extension with respect to any Letter of Credit, (x) the Total
Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate
Outstanding Amount of the Revolving Loans of any Lender, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and
(z) the Outstanding Amount of the L/C Obligations shall not exceed the
Letter of Credit Sublimit.  Each request
by the Borrower for the issuance or amendment of a Letter of Credit shall be
deemed to be a representation by the Borrower that the L/C Credit Extension so
requested complies with the conditions set forth in the proviso to the
preceding sentence.  Within the foregoing
limits, and subject to the terms and conditions hereof, the Borrower’s ability
to obtain Letters of Credit shall be fully revolving, and accordingly the
Borrower may, during the foregoing period, obtain Letters of Credit to replace
Letters of Credit that have expired or that have been drawn upon and
reimbursed.  All Existing Letters of
Credit shall be deemed to have been issued pursuant hereto, and from and after
the Closing Date shall be subject to and governed by the terms and conditions
hereof.


 


(ii)                                  The
L/C Issuer shall not issue any Letter of Credit, if:


 


(A)                              subject
to Section 2.03(b)(iii), the expiry date of such requested Letter
of Credit would occur more than twelve months after the date of issuance or
last extension, unless the Required Lenders have approved such expiry date; or


 


(B)                                the
expiry date of such requested Letter of Credit would occur after the Letter of
Credit Expiration Date, unless all the Lenders have approved such expiry date.


 


37





















 


(iii)                               The
L/C Issuer shall not be under any obligation to issue any Letter of Credit if:


 


(A)                              any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter
of Credit, or any Law applicable to the L/C Issuer or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with respect to such
Letter of Credit any restriction, reserve or capital requirement (for which the
L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing
Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which the L/C Issuer
in good faith deems material to it;


 


(B)                                the
issuance of such Letter of Credit would violate one or more policies of the L/C
Issuer;


 


(C)                                except
as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter
of Credit is in an initial stated amount less than $10,000, in the case of a
commercial Letter of Credit, or $50,000, in the case of a standby Letter of
Credit;


 


(D)                               such
Letter of Credit is to be denominated in a currency other than Dollars;


 


(E)                                 such
Letter of Credit contains any provisions for automatic reinstatement of the
stated amount after any drawing thereunder; or


 


(F)                                 a
default of any Lender’s obligations to fund under Section 2.03(c) exists
or any Lender is at such time a Defaulting Lender hereunder, unless the L/C
Issuer has entered into satisfactory arrangements with the Borrower or such
Lender to eliminate the L/C Issuer’s risk with respect to such Lender.


 


(iv)                              The
L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be
permitted at such time to issue such Letter of Credit in its amended form under
the terms hereof.


 


(v)                                 The
L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the
L/C Issuer would have no obligation at such time to issue such Letter of Credit
in its amended form under the terms hereof, or (B) the beneficiary of such
Letter of Credit does not accept the proposed amendment to such Letter of
Credit.


 


38





















 


(vi)                              The
L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer
shall have all of the benefits and immunities (A) provided to the Administrative
Agent in Article IX with respect to any acts taken or omissions
suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and Issuer Documents pertaining to such Letters of
Credit as fully as if the term “Administrative Agent” as used in Article IX
included the L/C Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the L/C Issuer.


 


(b)                                 Procedures
for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of
Credit.


 


(i)                                     Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application, appropriately
completed and signed by a Responsible Officer of the Borrower.  Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m.
at least two Business Days (or such later date and time as the Administrative
Agent and the L/C Issuer may agree in a particular instance in their sole
discretion) prior to the proposed issuance date or date of amendment, as the
case may be.  In the case of a request for
an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the
name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the
full text of any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the L/C Issuer may
require.  In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C Issuer (A) the
Letter of Credit to be amended; (B) the proposed date of amendment thereof
(which shall be a Business Day); (C) the nature of the proposed amendment;
and (D) such other matters as the L/C Issuer may require.  Additionally, the Borrower shall furnish to
the L/C Issuer and the Administrative Agent such other documents and
information pertaining to such requested Letter of Credit issuance or
amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may reasonably require.


 


(ii)                                  Promptly
after receipt of any Letter of Credit Application, the L/C Issuer will confirm
with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the L/C Issuer will provide the Administrative
Agent with a copy thereof.  Unless the
L/C Issuer has received written notice from any Lender, the Administrative
Agent or any Loan Party, at least one Business Day prior to the requested date
of issuance or amendment of


 


39





















 


the applicable Letter of Credit, that one or
more applicable conditions contained in Article IV shall not then
be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer
shall, on the requested date, issue a Letter of Credit for the account of the
Borrower (or the applicable Subsidiary) or enter into the applicable amendment,
as the case may be, in each case in accordance with the L/C Issuer’s usual and
customary business practices.  Immediately
upon the issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer
a risk participation in such Letter of Credit in an amount equal to the product
of such Lender’s Applicable Percentage times the amount of such Letter
of Credit.


 


(iii)                               If
the Borrower so requests in any applicable Letter of Credit Application, the
L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of
Credit that has automatic extension provisions (each, an “Auto-Extension
Letter of Credit”); provided that any such Auto-Extension Letter
of Credit must permit the L/C Issuer to prevent any such extension at least
once in each twelve-month period (commencing with the date of issuance of such
Letter of Credit) by giving prior notice to the beneficiary thereof not later
than a day (the “Non-Extension Notice Date”) in each such twelve-month
period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the L/C Issuer,
the Borrower shall not be required to make a specific request to the L/C Issuer
for any such extension.  Once an
Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to
have authorized (but may not require) the L/C Issuer to permit the extension of
such Letter of Credit at any time to an expiry date not later than the Letter
of Credit Expiration Date; provided, however, that the L/C Issuer
shall not permit any such extension if (A) the L/C Issuer has determined
that it would not be permitted, or would have no obligation, at such time to
issue such Letter of Credit in its revised form (as extended) under the terms
hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five Business Days before the
Non-Extension Notice Date (1) from the Administrative Agent that the
Required Lenders have elected not to permit such extension or (2) from the
Administrative Agent, any Lender or the Borrower that one or more of the
applicable conditions specified in Section 4.02 is not then
satisfied, and in each such case directing the L/C Issuer not to permit such
extension.


 


(iv)                              Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof,
the L/C Issuer will also deliver to the Borrower and the Administrative Agent a
true and complete copy of such Letter of Credit or amendment.


 


(c)                                  Drawings
and Reimbursements; Funding of Participations.


 


(i)                                     Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the L/C Issuer shall notify the


 


40





















 


Borrower and the Administrative Agent
thereof.  Not later than 11:00 a.m.
on the date of any payment by the L/C Issuer under a Letter of Credit (each
such date, an “Honor Date”), the Borrower shall reimburse the L/C Issuer
through the Administrative Agent in an amount equal to the amount of such
drawing.  If the Borrower fails to so
reimburse the L/C Issuer by such time, the Administrative Agent shall promptly
notify each Lender of the Honor Date, the amount of the unreimbursed drawing
(the “Unreimbursed Amount”), and the amount of such Lender’s Applicable
Percentage thereof.  In such event, the
Borrower shall be deemed to have requested a Revolving Borrowing of Base Rate
Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed
Amount, without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Commitments and the conditions set forth in
Section 4.02 (other than the delivery of a Revolving Loan
Notice).  Any notice given by the L/C
Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may
be given by telephone if immediately confirmed in writing; provided that
the lack of such an immediate confirmation shall not affect the conclusiveness
or binding effect of such notice.


 


(ii)                                  Each
Lender shall upon any notice pursuant to Section 2.03(c)(i) make
funds available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent’s Office in an amount equal to its Applicable
Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the
Business Day specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.03(c)(iii), each Lender that
so makes funds available shall be deemed to have made a Base Rate Loan to the
Borrower in such amount.  The
Administrative Agent shall remit the funds so received to the L/C Issuer.


 


(iii)                               With
respect to any Unreimbursed Amount that is not fully refinanced by a Revolving
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02
cannot be satisfied or for any other reason, the Borrower shall be deemed to
have incurred from the L/C Issuer an L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due
and payable on demand (together with interest) and shall bear interest at the
Default Rate.  In such event, each Lender’s
payment to the Administrative Agent for the account of the L/C Issuer pursuant
to Section 2.03(c)(ii) shall be deemed payment in respect of
its participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under this Section 2.03.


 


(iv)                              Until
each Lender funds its Revolving Loan or L/C Advance pursuant to this Section 2.03(c) to
reimburse the L/C Issuer for any amount drawn under any Letter of Credit,
interest in respect of such Lender’s Applicable Percentage of such amount shall
be solely for the account of the L/C Issuer.


 


(v)                                 Each
Lender’s obligation to make Revolving Loans or L/C Advances to reimburse the
L/C Issuer for amounts drawn under Letters of Credit,


 


41





















 


as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Lender may have against the L/C Issuer, the Borrower
or any other Person for any reason whatsoever; (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however,
that each Lender’s obligation to make Revolving Loans pursuant to this Section 2.03(c) is
subject to the conditions set forth in Section 4.02 (other than
delivery by the Borrower of a Revolving Loan Notice).  No such making of an L/C Advance shall
relieve or otherwise impair the obligation of the Borrower to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any Letter of
Credit, together with interest as provided herein.


 


(vi)                              If
any Lender fails to make available to the Administrative Agent for the account
of the L/C Issuer any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), the L/C Issuer shall be entitled
to recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds
Rate and a rate determined by the L/C Issuer in accordance with banking
industry rules on interbank compensation. 
A certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (vi) shall
be conclusive absent manifest error.


 


(d)                                 Repayment
of Participations.


 


(i)                                     At
any time after the L/C Issuer has made a payment under any Letter of Credit and
has received from any Lender such Lender’s L/C Advance in respect of such
payment in accordance with Section 2.03(c), if the Administrative
Agent receives for the account of the L/C Issuer any payment in respect of the
related Unreimbursed Amount or interest thereon (whether directly from the
Borrower or otherwise, including proceeds of Cash Collateral applied thereto by
the Administrative Agent), the Administrative Agent will distribute to such
Lender its Applicable Percentage thereof (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Lender’s
L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.


 


(ii)                                  If
any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Lender shall pay to the Administrative Agent for the account
of the L/C Issuer its Applicable Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender,


 


42





















 


at a rate per annum equal to the Federal
Funds Rate from time to time in effect. 
The obligations of the Lenders under this clause shall survive the
payment in full of the Obligations and the termination of this Agreement.


 


(e)                                  Obligations
Absolute. 
The obligation of the Borrower to reimburse the L/C Issuer
for each drawing under each Letter of Credit and to repay each L/C Borrowing
shall be absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including
the following:


 


(i)                                     any
lack of validity or enforceability of such Letter of Credit, this Agreement, or
any other Loan Document;


 


(ii)                                  the
existence of any claim, counterclaim, setoff, defense or other right that the
Borrower or any Subsidiary may have at any time against any beneficiary or any
transferee of such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the L/C Issuer or any other
Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;


 


(iii)                               any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under such Letter of Credit;


 


(iv)                              any
payment by the L/C Issuer under such Letter of Credit against presentation of a
draft or certificate that does not strictly comply with the terms of such
Letter of Credit; or any payment made by the L/C Issuer under such Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or


 


(v)                                 any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute
a defense available to, or a discharge of, the Borrower or any Subsidiary.


 


The Borrower
shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance
with the Borrower’s instructions or other irregularity, the Borrower will
immediately notify the L/C Issuer.  The
Borrower shall be conclusively deemed to have waived any such claim against the
L/C Issuer and its correspondents unless such notice is given as aforesaid.


 


(f)                                    Role
of L/C Issuer.  Each Lender and the Borrower agree
that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not
have any responsibility to


 


43





















 


obtain any document (other than any sight
draft, certificates and documents expressly required by the Letter of Credit)
or to ascertain or inquire as to the validity or accuracy of any such document
or the authority of the Person executing or delivering any such document.  None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable; (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document.  The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee
with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. 
None of the L/C Issuer, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of
the L/C Issuer, shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section 2.03(e); provided,
however, that anything in such clauses to the contrary notwithstanding,
the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrower, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by the Borrower
which the Borrower proves were caused by the L/C Issuer’s willful misconduct or
gross negligence or the L/C Issuer’s willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit.  In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.


 


(g)                                 Cash
Collateral.  Upon the request of the
Administrative Agent, (i) if the L/C Issuer has honored any full or
partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit
Expiration Date, any L/C Obligation for any reason remains outstanding, the
Borrower shall, in each case, immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations. 
Sections 2.05 and 8.02(c) set forth certain
additional requirements to deliver Cash Collateral hereunder.  For purposes of this Section 2.03,
Section 2.05 and Section 8.02(c), “Cash
Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant
to documentation in form and substance satisfactory to the Administrative Agent
and the L/C Issuer (which documents are hereby consented to by the
Lenders).  Derivatives of such term have
corresponding meanings.  The Borrower
hereby grants to the Administrative Agent, for the benefit of the L/C Issuer and
the Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing.  Cash Collateral shall


 


44





















 


be maintained in blocked, non-interest
bearing deposit accounts at Bank of America (the “L/C Cash Collateral
Account”).  The Borrower, no more
than once in any calendar quarter, may direct that the Administrative Agent to
invest the funds held in the L/C Cash Collateral Account (so long as the
aggregate amount of such funds exceeds any relevant minimum investment
requirement) in (i) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency thereof
and (ii) one or more other types of investments permitted by the
Administrative Agent, in each case with such maturities as the Borrower, with
the consent of the Administrative Agent, may specify, pending application of
such funds on account of the L/C Obligations or on account of other
obligations, as the case may be.  In the
absence of any such direction from the Borrower, the Administrative Agent shall
invest the funds held in the L/C Cash Collateral Account (so long as the
aggregate amount of such funds exceeds any relevant minimum investment
requirement) in one or more types of investments with such maturities as the Administrative
Agent may specify, pending application of such funds on account of the L/C
Obligations or on account of other Obligations, as the case may be.  All such investments shall be made in the
Administrative Agent’s name for the account of the Lenders, subject to the
ownership interest therein of the Borrower. 
The Borrower recognizes that any losses or taxes with respect to such
investments shall be borne solely by the Borrower, and the Borrower agrees to
hold the Administrative Agent and the Lenders harmless from any and all such
losses and taxes.  The Administrative
Agent may liquidate any investment held in the L/C Cash Collateral Account in
order to apply the proceeds of such investment on account of the L/C Obligations
(or on account of any other obligation then due and payable, as the case may
be) without regard to whether such investment has matured and without liability
for any penalty or other fee incurred (with respect to which the Borrower
hereby agrees to reimburse the Administrative Agent) as a result of such
application.


 


(h)                                 Applicability
of ISP and UCP.  Unless otherwise
expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is
issued (including any such agreement applicable to an Existing Letter of
Credit), (i) the rules of the ISP shall apply to each standby Letter
of Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber of
Commerce at the time of issuance, shall apply to each commercial Letter of
Credit.


 


(i)                                     Letter
of Credit Fees.  The Borrower shall
pay to the Administrative Agent for the account of each Lender in accordance
with its Applicable Percentage a Letter of Credit fee (the “Letter of Credit
Fee”) for each Letter of Credit equal to the Applicable Rate times
the daily amount available to be drawn under such Letter of Credit.  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  Letter of Credit Fees shall be (i) computed
on a quarterly basis in arrears and (ii) due and payable on the first
Business Day after the end of each March, June, September and December,
commencing with the first such date to occur after the issuance of such Letter
of Credit, on the Letter of Credit Expiration Date and thereafter on
demand.  If there is any change in the
Applicable Rate during any quarter, the daily amount available to be drawn
under each Letter of Credit shall be computed and multiplied by the Applicable
Rate separately for each period during such quarter that such Applicable Rate
was in


 


45





















 


effect. 
Notwithstanding anything to the contrary contained herein, upon the
request of the Required Lenders, while any Event of Default exists, all Letter
of Credit Fees shall accrue at the Default Rate.


 


(j)                                     Fronting
Fee and Documentary and Processing Charges Payable to L/C Issuer.  The Borrower shall pay directly to the L/C
Issuer for its own account a fronting fee with respect to each Letter of Credit
equal to (i) 1/8 of 1% per annum times the daily maximum amount available
to be drawn under each standby Letter of Credit, computed on the daily amount available to be drawn under such
Letter of Credit on a quarterly basis in arrears, and payable on the tenth
Business Day after the end of each March, June, September and December in
respect of the most recently-ended quarterly period (or portion thereof, in the
case of the first payment), commencing with the first such date to occur after
the issuance of such Letter of Credit, on the Letter of Credit Expiration Date
and thereafter on demand, and (ii) 1/8 of 1% per annum times the daily
amount of each commercial Letter of Credit, computed and payable on the date of
issuance and the date of any extension or increase thereof.  For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.06.  In addition, the Borrower shall pay directly
to the L/C Issuer for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
the L/C Issuer relating to letters of credit as from time to time in
effect.  Such customary fees and standard
costs and charges are due and payable on demand and are nonrefundable.


 


(k)                                  Conflict
with Issuer Documents.  In the event
of any conflict between the terms hereof and the terms of any Issuer Document,
the terms hereof shall control.


 


(l)                                     Letters
of Credit Issued for Subsidiaries. 
Notwithstanding that a Letter of Credit issued or outstanding hereunder
is in support of any obligations of, or is for the account of, a Subsidiary,
the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any
and all drawings under such Letter of Credit. 
The Borrower hereby acknowledges that the issuance of Letters of Credit
for the account of Subsidiaries inures to the benefit of the Borrower, and that
the Borrower’s business derives substantial benefits from the businesses of
such Subsidiaries.


 


2.04                           Swing Line Loans.


 


(a)                                  The
Swing Line.  Subject to the terms and
conditions set forth herein, the Swing Line Lender agrees, in reliance upon the
agreements of the other Lenders set forth in this Section 2.04, to
make loans (each such loan, a “Swing Line Loan”) to the Borrower from
time to time on any Business Day during the Availability Period in an aggregate
amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated
with the Applicable Percentage of the Outstanding Amount of Revolving Loans and
L/C Obligations of the Lender acting as Swing Line Lender, may exceed the
amount of such Lender’s Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Total Outstandings shall not
exceed the Aggregate Commitments, and (ii) the aggregate Outstanding
Amount of the Revolving Loans of any Lender, plus such


 


46





















 


Lender’s Applicable Percentage of the
Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender’s Commitment, and provided, further, that the
Borrower shall not use the proceeds of any Swing Line Loan to refinance any
outstanding Swing Line Loan.  Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.04, prepay under Section 2.05,
and reborrow under this Section 2.04.  Each Swing Line Loan shall be a Base Rate
Loan.  Immediately upon the making of a
Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Lender’s Applicable Percentage times the amount of such Swing Line Loan.


 


(b)                                 Borrowing
Procedures.  Each Swing Line
Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing
Line Lender and the Administrative Agent, which may be given by telephone.  Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 1:00 p.m. on
the requested borrowing date, and shall specify (i) the amount to be
borrowed, which shall be a minimum of $100,000, and (ii) the requested
borrowing date, which shall be a Business Day. 
Each such telephonic notice must be confirmed promptly by delivery to
the Swing Line Lender and the Administrative Agent of a written Swing Line Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower.  Promptly after receipt by the
Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line
Lender will confirm with the Administrative Agent (by telephone or in writing)
that the Administrative Agent has also received such Swing Line Loan Notice
and, if not, the Swing Line Lender will notify the Administrative Agent (by
telephone or in writing) of the contents thereof.  Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at
the request of any Lender) prior to 2:00 p.m. on the date of the proposed
Swing Line Borrowing (A) directing the Swing Line Lender not to make such
Swing Line Loan as a result of the limitations set forth in the proviso to the
first sentence of Section 2.04(a), or (B) that one or more of
the applicable conditions specified in Article IV is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender will, not later than 3:00 p.m. on the borrowing date specified in
such Swing Line Loan Notice, make the amount of its Swing Line Loan available
to the Borrower at its office by crediting the account of the Borrower on the
books of the Swing Line Lender in immediately available funds.


 


(c)                                  Refinancing
of Swing Line Loans.


 


(i)                                     The
Swing Line Lender at any time in its sole and absolute discretion may request,
on behalf of the Borrower (which hereby irrevocably authorizes the Swing Line
Lender to so request on its behalf), that each Lender make a Base Rate Loan in
an amount equal to such Lender’s Applicable Percentage of the amount of Swing
Line Loans then outstanding.  Such
request shall be made in writing (which written request shall be deemed to be a
Revolving Loan Notice for purposes hereof) and in accordance with the
requirements of Section 2.02, without regard to the minimum and
multiples specified therein for


 


47





















 


the principal amount of Base Rate Loans, but
subject to the unutilized portion of the Aggregate Commitments and the
conditions set forth in Section 4.02.  The Swing Line Lender shall furnish the
Borrower with a copy of the applicable Revolving Loan Notice promptly after
delivering such notice to the Administrative Agent.  Each Lender shall make an amount equal to its
Applicable Percentage of the amount specified in such Revolving Loan Notice
available to the Administrative Agent in immediately available funds for the
account of the Swing Line Lender at the Administrative Agent’s Office not later
than 1:00 p.m. on the day specified in such Revolving Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Loan to the Borrower in such
amount.  The Administrative Agent shall
remit the funds so received to the Swing Line Lender.


 


(ii)                                  If
for any reason any Swing Line Loan cannot be refinanced by such a Revolving
Borrowing in accordance with Section 2.04(c)(i), the request for
Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be
deemed to be a request by the Swing Line Lender that each of the Lenders fund
its risk participation in the relevant Swing Line Loan and each Lender’s
payment to the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.04(c)(i) shall be deemed payment in
respect of such participation.


 


(iii)                               If
any Lender fails to make available to the Administrative Agent for the account
of the Swing Line Lender any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be
entitled to recover from such Lender (acting through the Administrative Agent),
on demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the Swing Line Lender at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the Swing Line Lender in accordance
with banking industry rules on interbank compensation.  A certificate of the Swing Line Lender
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (iii) shall be conclusive absent
manifest error.


 


(iv)                              Each
Lender’s obligation to make Revolving Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.04(c) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right
which such Lender may have against the Swing Line Lender, the Borrower or any
other Person for any reason whatsoever, (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided, however, that each
Lender’s obligation to make Revolving Loans pursuant to this Section 2.04(c) is
subject to the conditions set forth in Section 4.02.  No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrower to repay Swing Line
Loans, together with interest as provided herein.


 


48





















 


(d)                                 Repayment
of Participations.


 


(i)                                     At
any time after any Lender has purchased and funded a risk participation in a
Swing Line Loan, if the Swing Line Lender receives any payment on account of
such Swing Line Loan, the Swing Line Lender will distribute to such Lender its
Applicable Percentage of such payment (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s
risk participation was funded) in the same funds as those received by the Swing
Line Lender.


 


(ii)                                  If
any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Lender shall pay to the Swing Line Lender its Applicable
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate. 
The Administrative Agent will make such demand upon the request of the
Swing Line Lender.  The obligations of
the Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.


 


(e)                                  Interest
for Account of Swing Line Lender. 
The Swing Line Lender shall be responsible for invoicing the Borrower
for interest on the Swing Line Loans. 
Until each Lender funds its Base Rate Loan or risk participation
pursuant to this Section 2.04 to refinance such Lender’s Applicable
Percentage of any Swing Line Loan, interest in respect of such Applicable
Percentage shall be solely for the account of the Swing Line Lender.


 


(f)                                    Payments
Directly to Swing Line Lender.  The
Borrower shall make all payments of principal and interest in respect of the
Swing Line Loans directly to the Swing Line Lender.


 


2.05                           Prepayments.


 


(a)                                  Voluntary
Prepayments - Revolving Loans.  The
Borrower may, upon notice to the Administrative Agent, at any time or from time
to time voluntarily prepay Revolving Loans in whole or in part without premium
or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 11:00 a.m. (A) three Business
Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on
the date of prepayment of Base Rate Loans; (ii) any prepayment of
Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof; and (iii) any prepayment of Base
Rate Loans shall be in a principal amount of $200,000 or a whole multiple of $100,000
in excess thereof or, in each case, if less, the entire principal amount
thereof then outstanding.  Each such
notice shall specify the date and amount of such prepayment and the Type(s) of
Loans to be prepaid.  The Administrative
Agent will promptly notify each Lender of its receipt of each such notice,


 


49





















 


and of the amount of such Lender’s Applicable
Percentage of such prepayment.  If such
notice is given by the Borrower, the Borrower shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the
date specified therein.  Any prepayment
of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the
amount prepaid, together with any additional amounts required pursuant to Section 3.05.  Each such prepayment shall be applied to the
Loans of the Lenders in accordance with their respective Applicable
Percentages.


 


(b)                                 Voluntary
Prepayment - Swing Line Loans.  The
Borrower may, upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), at any time or from time to time, voluntarily prepay
Swing Line Loans in whole or in part without premium or penalty; provided
that (i) such notice must be received by the Swing Line Lender and the
Administrative Agent not later than 1:00 p.m. on the date of the
prepayment, and (ii) any such prepayment shall be in a minimum principal
amount of $100,000.  Each such notice
shall specify the date and amount of such prepayment.  If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.


 


(c)                                  Mandatory
Prepayment - Excess Outstandings.  If
for any reason the Total Outstandings at any time exceed the Aggregate
Commitments then in effect, the Borrower shall immediately prepay Loans and/or
Cash Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided, however, that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless
after the prepayment in full of the Loans the Total Outstandings exceed the
Aggregate Commitments then in effect.


 


(d)                                 Mandatory
Prepayment - Asset Sales. The Borrower shall prepay outstanding Revolving
Loans in an aggregate principal amount equal to the Pro Rata Percentage of 100%
of the Net Cash Proceeds (or, if appropriate, the Pro Rata Percentage of 100%
of the Net Cash Proceeds that remain after deducting any amounts reinvested by
the Borrower or any of its Subsidiaries during the 365-day period
described in Section 7.05(d)) from the Disposition by the Borrower
or any of its Subsidiaries of any assets (including the Capital Stock of any
Subsidiary, but not including Dispositions permitted under clauses (a),
(b), (c), (e) and (f) of Section 7.05, and clauses (a) and
(c) of Section 7.12), in the manner hereafter set forth.  Each such mandatory prepayment shall occur
once in respect of each fiscal quarter of the Borrower in which such a
Disposition occurs, and the amount of each such mandatory prepayment shall be
equal to the Pro Rata Percentage of 100% of such Net Cash Proceeds of all
Dispositions which occurred during such fiscal quarter (or, if appropriate, the
Pro Rata Percentage of 100% of the Net Cash Proceeds that remain after
deducting any amounts reinvested by the Borrower or any of its Subsidiaries
during the 365-day period described in Section 7.05(d)).  The Borrower shall provide the Administrative
Agent with written notice of all Dispositions within a quarter no later than 30
days following the end of such fiscal quarter, specifying the amount of Net
Cash Proceeds received from such Dispositions. 
The mandatory prepayment shall occur by the 15th day following delivery
of such notice (but in no event less than the 45th day following the end of
such fiscal quarter).  For purposes of
the


 


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foregoing, “Pro Rata Percentage” means
the percentage obtained by dividing the Outstanding Amount of all Loans by the
sum of the outstanding principal balance of the Senior Notes plus the
Outstanding Amount of all Loans, in each case calculated as of the last day of
such fiscal quarter.  Each such mandatory
prepayment shall be made and applied as provided in Section 2.05(f).  If the Outstanding Amount of all Loans is
zero as of the last day of such fiscal quarter, no mandatory prepayment shall
be required to be made pursuant to this Section 2.05(d).


 


(e)                                  Prepayment
From Recovery Events.  Immediately
upon receipt by any of the Loan Parties of Net Recovery Proceeds for any
Recovery Event in an aggregate amount in excess of $1,000,000, the Borrower
shall, at the request of the Lenders, prepay Revolving Loans in an aggregate
principal amount equal to 100% of such excess amount of the Net Recovery
Proceeds from such Recovery Event; provided that the Lenders may, at
their discretion, permit or require the applicable Loan Party to use such Net
Recovery Proceeds, or any part thereof, to replace or restore any properties or
assets in respect of which such Net Recovery Proceeds were paid within 365 days
of receipt thereof.  If the Outstanding
Amount of all Loans is zero on the date of receipt by any of the Loan Parties
of such Net Recovery Proceeds, no mandatory prepayment shall be required to be
made pursuant to this Section 2.05(e).


 


(f)                                    Repayment
Application.  Any mandatory
prepayment of Loans pursuant to Section 2.05(d) and (e),
shall (i) include and be applied to interest to the date of such prepayment
on the principal amount prepaid and any additional amounts required pursuant to
Section 3.05, and (ii) not be subject to any notice and
minimum payment provisions.


 


2.06                           Termination or Reduction of Commitments.  The Borrower may, upon notice to the Administrative
Agent, terminate the Aggregate Commitments, or from time to time permanently
reduce the Aggregate Commitments; provided that (i) any such notice
shall be received by the Administrative Agent not later than 11:00 a.m.
five Business Days prior to the date of termination or reduction, (ii) any
such partial reduction shall be in an aggregate amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall
not terminate or reduce the Aggregate Commitments if, after giving effect
thereto and to any concurrent prepayments hereunder, the Total Outstandings
would exceed the Aggregate Commitments, and (iv) if, after giving effect
to any reduction of the Aggregate Commitments, the Letter of Credit Sublimit or
the Swing Line Sublimit exceeds the amount of the Aggregate Commitments, such
Sublimit shall be automatically reduced by the amount of such excess.  The Administrative Agent will promptly notify
the Lenders of any such notice of termination or reduction of the Aggregate
Commitments.  Any reduction of the
Aggregate Commitments shall be applied to the Commitment of each Lender
according to its Applicable Percentage. 
All fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.


 


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2.07                           Repayment of Loans.


 


(a)                                  The
Borrower shall repay to the Lenders on the Maturity Date the aggregate
principal amount of the Loans outstanding on such date and all other
outstanding and unpaid Obligations.


 


(b)                                 The
Borrower shall repay each Swing Line Loan on the earlier to occur of (i) demand
by the Swing Line Lender and (ii) the Maturity Date.


 


2.08                           Interest.


 


(a)                                  Subject
to the provisions of subsection (b) below, (i) each Eurodollar
Rate Loan shall bear interest on the outstanding principal amount thereof for
each Interest Period at a rate per annum equal to the lesser of (x) the
Highest Lawful Rate and (y) the Eurodollar Rate for such Interest Period plus
the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the lesser of (x) the Highest Lawful Rate and
(y) the Base Rate plus the Applicable Rate; and (iii) each
Swing Line Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the lesser of
(x) the Highest Lawful Rate and (y) the Base Rate plus the
Applicable Rate.


 


(b)


 


(i)                                     If
any amount of principal of any Loan is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.


 


(ii)                                  If
any amount (other than principal of any Loan) payable by the Borrower under any
Loan Document is not paid when due (without regard to any applicable grace
periods), whether at stated maturity, by acceleration or otherwise, then upon
the request of the Required Lenders, such amount shall thereafter bear interest
at a fluctuating interest rate per annum at all times equal to the Default Rate
to the fullest extent permitted by applicable Laws.


 


(iii)                               Upon
the request of the Required Lenders, while any Event of Default exists, the
Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.


 


(iv)                              Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.


 


(c)                                  Interest
on each Loan shall be due and payable in arrears on each Interest Payment Date
applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable
in accordance with the terms hereof before


 


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and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.


 


(d)                                 If
the amount of interest payable in respect of any interest computation period is
reduced to the Highest Lawful Rate and the amount of interest payable in
respect of any subsequent interest computation period would be less than the
Maximum Amount, then the amount of interest payable in respect of such
subsequent interest computation period shall be automatically increased to the
Maximum Amount; provided that at no time shall the aggregate amount by which
interest paid has been increased pursuant to this sentence exceed the aggregate
amount by which interest has been reduced pursuant to this sentence


 


2.09                           Fees. 
In addition to certain fees described in subsections (i) and
(j) of Section 2.03:


 


(a)                                  Commitment
Fee.  The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage, a commitment fee (the “Commitment Fee”) equal to
the Applicable Rate times the actual daily amount by which the Aggregate
Commitments exceed the sum of (i) the Outstanding Amount of Loans and (ii) the
Outstanding Amount of L/C Obligations. 
The commitment fee shall accrue at all times during the Availability
Period, including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with
the first such date to occur after the Closing Date, and on the Maturity
Date.  The commitment fee shall be
calculated quarterly in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and multiplied
by the Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.  For
purposes of computation of the Commitment Fee, Swing Line Loans shall not be
counted toward or considered usage of the Aggregate Commitments.


 


(b)                                 Other
Fees.


 


(i)                                     The
Borrower shall pay to the Arranger and the Administrative Agent for their own
respective accounts fees in the amounts and at the times specified in the Fee
Letter.  Such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.


 


(ii)                                  The
Borrower shall pay to the Lenders such fees as shall have been separately
agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.


 


2.10                           Computation of Interest and Fees.  All computations of interest for Base Rate
Loans when the Base Rate is determined by Bank of America’s “prime rate” shall
be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed.  All other
computations of fees and interest shall be made on the basis of a 360-day
year and actual days


 


53





















 


elapsed (which results in more fees or
interest, as applicable, being paid than if computed on the basis of a 365-day
year).  Interest shall accrue on each
Loan for the day on which the Loan is made, and shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.12(a), bear interest for one day.  Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.  The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.08(a).


 


2.11                           Evidence of Debt.


 


(a)                                  The
Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent
in the ordinary course of business.  The
accounts or records maintained by the Administrative Agent and each Lender
shall be conclusive absent manifest error of the amount of the Credit
Extensions made by the Lenders to the Borrower and the interest and payments
thereon.  Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the
Obligations.  In the event of any
conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.  Upon the
request of any Lender made through the Administrative Agent, the Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a
Revolving Note and/or Swing Line Note, as applicable, which shall evidence such
Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its
Note(s) and endorse thereon the date, Type (if applicable), amount and maturity
of its Loans and payments with respect thereto.


 


(b)                                 In
addition to the accounts and records referred to in subsection (a), each
Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender
of participations in Letters of Credit and Swing Line Loans.  In the event of any conflict between the
accounts and records maintained by the Administrative Agent and the accounts
and records of any Lender in respect of such matters, the accounts and records
of the Administrative Agent shall control in the absence of manifest error.


 


2.12                           Payments Generally; Administrative Agent’s Clawback.


 


(a)                                  General.  All payments to be made by the Borrower shall
be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.  Except as
otherwise expressly provided herein, all payments by the Borrower hereunder shall
be made to the Administrative Agent, for the account of the respective Lenders
to which such payment is owed, at the Administrative Agent’s Office in Dollars
and in immediately available funds not later than 2:00 p.m. on the date
specified herein.  The Administrative
Agent will promptly distribute to each Lender its Applicable Percentage


 


54





















 


(or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender’s Lending Office.  All payments
received by the Administrative Agent after 2:00 p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue.  If any payment
to be made by the Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.


 


(b)


 


(i)                                     Funding
by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing of
Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans,
prior to 12:00 noon on the date of such Borrowing) that such Lender will
not make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.02 (or,
in the case of a Borrowing of Base Rate Loans, that such Lender has made such
share available in accordance with and at the time required by Section 2.02)
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount.  In such event, if
a Lender has not in fact made its share of the applicable Borrowing available
to the Administrative Agent, then the applicable Lender and the Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at (A) in
the case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (B) in the case
of a payment to be made by the Borrower, the interest rate applicable to Base
Rate Loans.  If the Borrower and such
Lender shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrower shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.


 


(ii)                                  Payments
by Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders or the L/C Issuer
hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders or the L/C Issuer, as the case may


 


55





















 


be, the amount due.  In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the L/C Issuer, as the case
may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or the L/C Issuer, in
immediately available funds with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date
of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.


 


A notice of
the Administrative Agent to any Lender or the Borrower with respect to any
amount owing under this subsection (b) shall be conclusive, absent
manifest error.


 


(c)                                  Failure
to Satisfy Conditions Precedent.  If
any Lender makes available to the Administrative Agent funds for any Loan to be
made by such Lender as provided in the foregoing provisions of this Article II,
and such funds are not made available to the Borrower by the Administrative
Agent because the conditions to the applicable Credit Extension set forth in Article IV
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.


 


(d)                                 Obligations
of Lenders Several.  The obligations
of the Lenders hereunder to make Loans, to fund participations in Letters of
Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are
several and not joint.  The failure of
any Lender to make any Loan, to fund any such participation or to make any
payment under Section 10.04(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Loan, to purchase its participation or to make its
payment under Section 10.04(c).


 


(e)                                  Funding
Source.  Nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan in any particular
place or manner or to constitute a representation by any Lender that it has
obtained or will obtain the funds for any Loan in any particular place or
manner.


 


2.13                           Sharing of Payments by Lenders.  If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of the Loans made by it, or the participations
in L/C Obligations or in Swing Line Loans held by it resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of such Loans or
participations and accrued interest thereon greater than its pro  rata
share thereof as provided herein, then the Lender receiving such greater
proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase
(for cash at face value) participations in the Loans and subparticipations in
L/C Obligations and Swing Line Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and other
amounts owing them, provided that:


 


56





















 


(i)                                     if
any such participations or subparticipations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the
extent of such recovery, without interest; and


 


(ii)                                  the
provisions of this Section shall not be construed to apply to (x) any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or subparticipations in L/C Obligations or Swing Line Loans to any
assignee or participant, other than to the Borrower or any Subsidiary thereof
(as to which the provisions of this Section shall apply).


 


Each Loan
Party consents to the foregoing and agrees, to the extent it may effectively do
so under applicable law, that any Lender acquiring a participation pursuant to
the foregoing arrangements may exercise against such Loan Party rights of
setoff and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of such Loan Party in the amount of such
participation.


 


2.14                           Increase in Commitments.


 


(a)                                  Request
for Increase.  Provided there exists
no Default, upon notice to the Administrative Agent (which shall promptly
notify the Lenders), the Borrower may on
not more than two occasions request an increase in the Aggregate Commitments by
an aggregate amount not exceeding $15,000,000; provided that neither
such request for an increase shall be in an amount of less than
$5,000,000.  At the time of sending such
notice, the Borrower (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall in no event be less than ten Business Days from the date of delivery of
such notice to the Lenders).


 


(b)                                 Lender
Elections to Increase.  Each Lender
shall notify the Administrative Agent within such time period whether or not it
agrees to increase its Commitment and, if so, whether by an amount equal to,
greater than, or less than its Applicable Percentage of such requested
increase.  Any Lender not responding
within such time period shall be deemed to have declined to increase its
Commitment.


 


(c)                                  Notification
by Administrative Agent; Additional Lenders.  The Administrative Agent shall notify the
Borrower and each Lender of the Lenders’ responses to each request made
hereunder.  To achieve the full amount of
a requested increase and subject to the approval of the Administrative Agent
and the L/C Issuer (which approvals shall not be unreasonably withheld or
delayed), the Borrower may also invite additional Eligible Assignees to become
Lenders pursuant to a joinder agreement in form and substance satisfactory to the
Administrative Agent and its counsel.


 


(d)                                 Effective
Date and Allocations.  If the
Aggregate Commitments are increased in accordance with this Section, the
Administrative Agent and the Borrower shall determine the effective date (the “Increase
Effective Date”) and the final allocation


 


57





















 


of such increase.  The Administrative Agent shall promptly
notify the Borrower and the Lenders of the final allocation of such increase
and the Increase Effective Date.


 


(e)                                  Conditions
to Effectiveness of Increase.  As a
condition precedent to such increase, the Borrower shall deliver to the
Administrative Agent a certificate of each Loan Party dated as of the Increase
Effective Date (in sufficient copies for each Lender) signed by a Responsible
Officer of such Loan Party (i) certifying and attaching the resolutions
adopted by such Loan Party approving or consenting to such increase, and (ii) in
the case of the Borrower, certifying that, before and after giving effect to
such increase, (A) the representations and warranties contained in Article V
and the other Loan Documents are true and correct on and as of the Increase
Effective Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct
as of such earlier date, and except that for purposes of this Section 2.14,
the representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.01,
and (B) no Default exists.  The
Borrower shall prepay any Revolving Loans outstanding on the Increase Effective
Date (and pay any additional amounts required pursuant to Section 3.05)
to the extent necessary to keep the outstanding Revolving Loans ratable with
any revised Applicable Percentages arising from any nonratable increase in the
Commitments under this Section.


 


(f)                                    Conflicting
Provisions.  This Section shall
supersede any provisions in Sections 2.13 or 10.01 to the
contrary.


 


ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY


 


3.01                           Taxes.


 


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


 


(b)                                 Payment
of Other Taxes by the Borrower. 
Without limiting the provisions of subsection (a) above, the
Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.


 


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(c)                                  Indemnification
by the Borrower.  The Borrower shall
indemnify the Administrative Agent, each Lender and the L/C Issuer, within 30
days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and
any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate setting forth
in reasonable detail the basis for such claims and the amount of such payment
or liability delivered to the Borrower by a Lender or the L/C Issuer (with a
copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender or the L/C Issuer, shall be prima facie
evidence thereof.  The Borrower shall not
have any liability for any claim that is attributable to any period of time
occurring more than 270 days prior to the date of any certificate delivered
pursuant to the preceding sentence; provided, that if the event or
circumstances giving rise to any payment is retroactive, the 270-day
period referred to above will be extended to include the period of retroactive
effect of the event or circumstance giving rise to such payment.


 


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


 


(e)                                  Status
of Lenders.  Any Foreign Lender that
is entitled to an exemption from or reduction of withholding tax under the law
of the jurisdiction in which the Borrower is resident for tax purposes, or any
treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with
a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or
at a reduced rate of withholding.  In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such
Lender is subject to backup withholding or information reporting requirements.


 


Without
limiting the generality of the foregoing, in the event that the Borrower is
resident for tax purposes in the United States, any Foreign Lender shall
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the
following is applicable:


 


59





















 


(i)                                     duly
completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is
a party,


 


(ii)                                  duly
completed copies of Internal Revenue Service Form W-8ECI,


 


(iii)                               in
the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a “bank”
within the meaning of section 881(c)(3)(A) of the Code, (B) a “10
percent shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section 881(c)(3)(C) of
the Code and (y) duly completed copies of Internal Revenue Service Form W-8BEN,
or


 


(iv)                              any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit the Borrower to determine the withholding or deduction required to be
made.


 


(f)                                    Treatment
of Certain Refunds.  If the
Administrative Agent, any Lender or the L/C Issuer determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of the Administrative Agent, such
Lender or the L/C Issuer, as the case may be, and without interest (other than
any interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the
Administrative Agent, such Lender or the L/C Issuer, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent,
such Lender or the L/C Issuer in the event the Administrative Agent, such
Lender or the L/C Issuer is required to repay such refund to such Governmental
Authority.  This subsection shall
not be construed to require the Administrative Agent, any Lender or the L/C
Issuer to make available its tax returns (or any other information relating to
its taxes that it deems confidential) to the Borrower or any other Person.


 


3.02                           Illegality. 
If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or
to determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower
through the Administrative Agent, any obligation of such Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate
Loans shall be suspended until


 


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such Lender notifies the Administrative Agent
and the Borrower that the circumstances giving rise to such determination no
longer exist.  Upon receipt of such
notice, the Borrower shall, upon demand from such Lender (with a copy to the
Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.


 


3.03                           Inability to Determine Rates.  If the Required Lenders determine that for
any reason in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and
reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or (c) the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan does not adequately and fairly reflect the cost to such
Lenders of funding such Loan, the Administrative Agent will promptly so notify
the Borrower and each Lender. 
Thereafter, the obligation of the Lenders to make or maintain Eurodollar
Rate Loans shall be suspended until the Administrative Agent (upon the instruction
of the Required Lenders) revokes such notice. 
Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for
a Revolving Borrowing of Base Rate Loans in the amount specified therein.


 


3.04                           Increased Costs; Reserves on Eurodollar Rate Loans.


 


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


 


(i)                                     impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, any Lender (except
any reserve requirement contemplated by Section 3.04(e)) or the L/C
Issuer;


 


(ii)                                  subject
any Lender or the L/C Issuer to any tax of any kind whatsoever with respect to
this Agreement, any Letter of Credit, any participation in a Letter of Credit
or any Eurodollar Rate Loan made by it, or change the basis of taxation of
payments to such Lender or the L/C Issuer in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.01 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or the L/C Issuer); or


 


(iii)                               impose
on any Lender or the L/C Issuer or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Rate Loans
made by such Lender or any Letter of Credit or participation therein;


 


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


 


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


 


(c)                                  Certificates
for Reimbursement.  A certificate of
a Lender or the L/C Issuer setting forth in reasonable detail the basis of and
the amount or amounts necessary to compensate such Lender or the L/C Issuer or
its holding company, as the case may be, as specified in subsection (a) or
(b) of this Section and delivered to the Borrower shall be prima
facie evidence thereof.  The Borrower
shall pay such Lender or the L/C Issuer, as the case may be, the amount shown
as due on any such certificate within 15 days after receipt thereof.  The Borrower shall not be required to make
any payment to any Person pursuant to this Section which is attributable
to any period of time occurring more than 270 days prior to the date of any
certificate delivered pursuant to this Section; provided that if the
event or circumstance giving rise to any payment is retroactive, the 270-day
period referred to above will be extended to include the period of retroactive
effect of the event or circumstance giving rise to such payment.


 


(d)                                 Delay
in Requests.  Failure or delay on the
part of any Lender or the L/C Issuer to demand compensation pursuant to the
foregoing provisions of this Section shall not constitute a waiver of such
Lender’s or the L/C Issuer’s right to demand such compensation, provided
that the Borrower shall not be required to compensate a Lender or the L/C
Issuer pursuant to the foregoing provisions of this Section for any
increased costs incurred or reductions suffered more than nine months prior to
the date that such Lender or the L/C Issuer, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or the L/C Issuer’s


 


62





















 


intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall
be extended to include the period of retroactive effect thereof).


 


(e)                                  Reserves
on Eurodollar Rate Loans.  The
Borrower shall pay to each Lender, as long as such Lender shall be required to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date
on which interest is payable on such Loan, provided the Borrower shall
have received at least 15 days’ prior notice (with a copy to the Administrative
Agent) of such additional interest from such Lender.  If a Lender fails to give notice 15 days
prior to the relevant Interest Payment Date, such additional interest shall be
due and payable 15 days from receipt of such notice.


 


3.05                           Compensation for Losses.  Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:


 


(a)                                  any
continuation, conversion, payment or prepayment of any Loan other than a Base
Rate Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise);


 


(b)                                 any
failure by the Borrower (for a reason other than the failure of such Lender to
make a Loan) to prepay, borrow, continue or convert any Loan other than a Base
Rate Loan on the date or in the amount notified by the Borrower; or


 


(c)                                  any
assignment of a Eurodollar Rate Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to Section 10.13;


 


including any loss of anticipated profits and any loss or expense
arising from the liquidation or reemployment of funds obtained by it to
maintain such Loan or from fees payable to terminate the deposits from which
such funds were obtained.  The Borrower
shall also pay any customary administrative fees charged by such Lender in
connection with the foregoing.


 


For purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.05, each Lender shall be deemed to
have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for
such Loan by a matching deposit or other borrowing in the London interbank
eurodollar market for a comparable amount and for a comparable period, whether
or not such Eurodollar Rate Loan was in fact so funded.


 


3.06                           Mitigation Obligations; Replacement of Lenders.


 


(a)                                  Designation
of a Different Lending Office.  If
any Lender requests compensation under Section 3.04, or the
Borrower is required to pay any additional


 


63





















 


amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01,
or if any Lender gives a notice pursuant to Section 3.02, then such
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice
pursuant to Section 3.02, as applicable, and (ii) in each
case, would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.


 


(b)                                 Replacement
of Lenders.  If any Lender requests
compensation under Section 3.04, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01, the Borrower may
replace such Lender in accordance with Section 10.13.


 


3.07                           Survival. 
All of the Borrower’s obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.


 


ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS


 


4.01                           Conditions of Initial Credit Extension.  The obligation of the L/C Issuer and each
Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:


 


(a)                                  The
Administrative Agent’s receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:


 


(i)                                     executed
counterparts of this Agreement, the Guaranty, the Security Agreements (together
with related UCC-1 financing statements, stock certificates for all
Covered Capital Stock of each Domestic Subsidiary of the Borrower, stock
certificates for all of the Capital Stock of the Foreign Subsidiaries owned by
the Borrower, provided that, if the Borrower owns in excess of 66% of the
aggregate outstanding Capital Stock of any Foreign Subsidiary, the Borrower or
such Subsidiary shall not deliver more than 66% of the total aggregate
outstanding Capital Stock of any such Foreign Subsidiary, and undated stock
powers duly executed in blank) sufficient in number for distribution to the
Administrative Agent, each Lender and the Borrower;


 


(ii)                                  duly
executed and completed Deeds of Trust and/or other Lien filings on Real
Property Collateral owned or leased by the Borrower or each


 


64





















 


applicable Domestic Subsidiary, related loan
or mortgagee title commitments in form and substance reasonably satisfactory
to, and to the extent required by, the Administrative Agent, flood
certificates, and tax affidavits, together with payment of all related taxes
and fees;


 


(iii)                               receipt
of certificates of insurance and endorsements to insurance policies naming the
Administrative Agent as loss payee/mortgagee with respect to all Collateral and
additional insured with respect to locations of Real Property Collateral, and
evidence of payment of all premiums, as required by Section 6.07,
sufficient in number for distribution to the Administrative Agent, each Lender
and the Borrower;


 


(iv)                              copies
of all UCC and Lien searches of (a) all properties of the Borrower and its
Domestic Subsidiaries, (b) all Covered Capital Stock of the Domestic
Subsidiaries and (c) all Capital Stock of the Foreign Subsidiaries owned
by the Borrower, each such search showing no Liens except Permitted Liens.


 


(v)                                 Revolving
Loan Notes executed by the Borrower in favor of each Lender requesting a
Revolving Loan Note, each in principal amount equal to such Lender’s
Commitment;


 


(vi)                              a
Swing Line Note executed by the Borrower in favor of the Administrative Agent;


 


(vii)                           such
certificates of resolutions or other action, incumbency certificates and/or
other certificates of Responsible Officers of each Loan Party as the
Administrative Agent may require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Agreement and the other Loan Documents to which
such Loan Party is a party;


 


(viii)                        such
documents and certifications as the Administrative Agent may reasonably require
to evidence that each Loan Party is duly organized or formed, and that each of
the Borrower and each Guarantor is validly existing, in good standing and
qualified to engage in business in each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect;


 


(ix)                                a
favorable opinion of Thompson & Knight LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, as to the
matters set forth in Exhibit F and such other matters concerning
the Loan Parties and the Loan Documents as the Required Lenders may reasonably
request;


 


(x)                                   a
certificate of a Responsible Officer of each Loan Party either (A) attaching
copies of all consents, licenses and approvals required in connection with the
execution, delivery and performance by such Loan Party and the validity against
such Loan Party of the Loan Documents to which it is a party, and such


 


65





















 


consents, licenses and approvals shall be in
full force and effect, or (B) stating that no such consents, licenses or
approvals are so required;


 


(xi)                                a
certificate signed by a Responsible Officer of the Borrower certifying (A) that
the conditions specified in Sections 4.02(a) and (b) have
been satisfied, and (B) that there has been no event or circumstance since
the date of the Audited Financial Statements that has had or could be
reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect;


 


(xii)                             evidence
that the Existing Credit Agreement has been or concurrently with the Closing
Date is being terminated; and


 


(xiii)                          such
other assurances, certificates, documents, consents or opinions as the
Administrative Agent, the L/C Issuer, the Swing Line Lender or the Required
Lenders reasonably may require.


 


(b)                                 Any
fees required to be paid on or before the Closing Date shall have been paid,
and the Fee Letter shall be in full force and effect.


 


(c)                                  Unless
waived by the Administrative Agent, the Borrower shall have paid all fees,
charges and disbursements of counsel to the Administrative Agent to the extent
invoiced prior to or on the Closing Date, plus such additional amounts of such
fees, charges and disbursements as shall constitute its reasonable estimate of
such fees, charges and disbursements incurred or to be incurred by it through
the closing proceedings (provided that such estimate shall not thereafter
preclude a final settling of accounts between the Borrower and the
Administrative Agent).


 


(d)                                 The
Closing Date shall have occurred on or before April 30, 2005.


 


(e)                                  No
actions, suits, proceedings, claims or disputes shall have been threatened or
commenced in any court, in arbitration or before any Governmental Authority,
against the Borrower or any of its Subsidiaries which (i) purport to
affect or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby or (ii) if determined adversely, could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.


 


Without
limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.


 


4.02                           Conditions to all Credit Extensions.  The obligation of each Lender to honor any
Request for Credit Extension (other than a Revolving Loan Notice requesting
only a conversion of the Loans to the other Type, or a continuation of
Eurodollar Rate Loans) is subject to the following conditions precedent:


 


66





















 


(a)                                  The
representations and warranties of the Borrower and each other Loan Party
contained in Article V or any other Loan Document, or which are
contained in any document furnished at any time under or in connection herewith
or therewith, shall be true and correct on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except that for purposes of this Section 4.02,
the representations and warranties contained in subsection (a) of Section 5.05
shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 6.01, except
that to the extent that such representations and warranties refer to statements
furnished pursuant to clause (b) of Section 6.01, the
representations and warranties in subclauses (i) and (ii) of
clause (b) of Section 5.05 shall be qualified by
reference to the absence of footnotes and shall be subject to normal year-end
audit adjustments.


 


(b)                                 No
Default shall exist, or would result from such proposed Credit Extension or
from the application of the proceeds thereof.


 


(c)                                  The
Administrative Agent and, if applicable, the L/C Issuer or the Swing Line
Lender shall have received a Request for Credit Extension in accordance with
the requirements hereof.


 


Each Request
for Credit Extension (other than a Revolving Loan Notice requesting only a
conversion of Loans to the other Type or a continuation of Eurodollar Rate
Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and
(b) have been satisfied on and as of the date of the applicable
Credit Extension.


 


ARTICLE V.

REPRESENTATIONS AND WARRANTIES


 


The Borrower
represents and warrants to the Administrative Agent and the Lenders that:


 


5.01                           Existence, Qualification and Power; Compliance with
Laws.  Each Loan Party (a) is
duly organized or formed, validly existing and in good standing under the Laws
of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own or lease its assets and
carry on its business and (ii) execute, deliver and perform its
obligations under the Loan Documents to which it is a party, and (c) is
duly qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (b)(i) or (c), to the extent that failure
to do so could not reasonably be expected to have a Material Adverse Effect.


 


5.02                           Authorization; No Contravention.  The execution, delivery and performance by
each Loan Party of each Loan Document to which such Person is party, have been
duly authorized by all necessary corporate or other organizational action, and
do not and will not (a) contravene the terms of any of such Person’s
Organization Documents; (b) conflict with or


 


67





















 


result in any breach or contravention of, or
the creation of any Lien under, or require any payment to be made under (i) any
Contractual Obligation to which such Person is a party or affecting such Person
or the properties of such Person or any of its Subsidiaries or (ii) any
order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject; or (c) violate any
Law.  Each Loan Party is in compliance
with all Contractual Obligations referred to in clause (b)(i), except to
the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.


 


5.03                           Governmental Authorization; Other Consents.  No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.


 


5.04                           Binding Effect.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. 
This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms, subject as to enforcement to any Debtor Relief Laws and to
general equitable principles.


 


5.05                           Financial Statements; No Material Adverse Effect; No
Internal Control Event.


 


(a)                                  The
Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of
the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other
liabilities, direct or contingent, of the Borrower and its Subsidiaries as of
the date thereof, including liabilities for taxes, material commitments and
Debt which are required by GAAP to be shown thereon.


 


(b)                                 Since
the date of the Audited Financial Statements, there has been no event or
circumstance, either individually or in the aggregate, that has had or could
reasonably be expected to have a Material Adverse Effect.


 


(c)                                  Since
the date of the Audited Financial Statements, no Internal Control Event has
occurred the result of which could reasonably be expected to have a Material
Adverse Effect.


 


(d)                                 There
are no Off-Balance Sheet Liabilities.


 


5.06                           Litigation. 
Except as specifically disclosed in Schedule 5.06, there are
no actions, suits, proceedings, claims or disputes pending or, to the Knowledge
of the Borrower after due and diligent investigation, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any of its Subsidiaries or


 


68





















 


against any of their properties or revenues
that (a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby, or (b) either
individually or in the aggregate, if determined adversely, could reasonably be
expected to have a Material Adverse Effect.


 


5.07                           No Default. 
Neither the Borrower nor any Subsidiary is in default under or with
respect to any Contractual Obligation that could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.  No Default has occurred and is continuing or
would result from the consummation of the transactions contemplated by this
Agreement or any other Loan Document.


 


5.08                           Ownership of Property; Liens.  Each of the Borrower and each Subsidiary has
good record and indefeasible title in fee simple to, or valid leasehold
interests in, all real property necessary or used in the ordinary conduct of
its business, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.  The property of the Borrower and its
Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.


 


5.09                           Environmental Compliance.


 


(a)                                  Permits,
Etc.  The Borrower and its
Subsidiaries (i) have obtained all material Environmental Permits required
by Governmental Authorities necessary for the ownership and operation of their
respective Properties and the conduct of their respective businesses; (ii) to
the Borrower’s Knowledge, have been and are in compliance with all terms and
conditions of such Environmental Permits, if any, and with all other material
requirements of applicable Environmental Laws; (iii) have not received
notice of any violation or alleged violation of any Environmental Law or
Environmental Permit; and (iv) are not subject to any actual or contingent
Environmental Liability.


 


(b)                                 Certain
Liabilities.  Except as set forth on Schedule 5.09,
to the Borrower’s Knowledge, none of the present or previously owned or
operated Properties of the Borrower or of any of its present or former
Subsidiaries, wherever located, (i) has been placed on or proposed to be
placed on the National Priorities List, the Comprehensive Environmental
Response Compensation Liability Information System list, or their state or
local analogs, or have been otherwise investigated, designated, listed or
identified as a potential site for removal, remediation, cleanup, closure,
restoration, reclamation, or other response activity under any Environmental
Laws, except for any such Property with respect to which the Borrower or the
applicable Subsidiary has received a closure letter or other official written
approval from the applicable Governmental Authority stating that all applicable
legal and regulatory standards have been met with respect to all conditions
identified with respect to such Property; (ii) is subject to a Lien,
arising under or in connection with any Environmental Laws, that attaches to
any revenues or to any Property owned or operated by the Borrower or any of its
Subsidiaries, wherever located, which could reasonably be expected to have a
Material Adverse Effect; or (iii) has been the site of any Release of
Hazardous Materials from present or past operations which has caused at the
site or at any third party site any condition that has resulted in or could


 


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reasonably be expected to result in the need
for Response that would cause a Material Adverse Effect.


 


(c)                                  Certified
Actions.  Without limiting the
foregoing, (i) all necessary notices have been properly filed, and no
further action is required under current Environmental Law as to each Response
or other restoration or remedial project taken by the Borrower, or its present
or former Subsidiaries on any of their presently or formerly owned or operated
Properties and (ii) the present, and, to the Borrower’s Knowledge, future
liability, if any, of the Borrower and its Subsidiaries which could reasonably
be expected to arise in connection with requirements under Environmental Laws
will not result in a Material Adverse Effect.


 


5.10                           Insurance. 
The properties of the Borrower and its Subsidiaries are insured with
financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts (after giving effect to any self-insurance and
retention levels compatible with the following standards), with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or the applicable Subsidiary operates.


 


5.11                           Taxes. 
The Borrower and its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in
good faith by appropriate proceedings diligently conducted and for which
adequate reserves have been provided in accordance with GAAP.  There is no proposed tax assessment against
the Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect, and there are no items that would give rise to a substantial
understatement penalty for the Borrower or any Subsidiary that would have a
Material Adverse Effect.  Neither any
Loan Party nor any Subsidiary thereof is party to any written tax sharing
agreement.


 


5.12                           ERISA Compliance.


 


(a)                                  Each
Plan is in compliance in all material respects with the applicable provisions
of ERISA, the Code and other Federal or state Laws.  Each Plan that is intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the IRS or an
application for such a letter is currently being processed by the IRS with
respect thereto and, to the Knowledge of the Borrower, nothing has occurred
which would prevent, or cause the loss of, such qualification.  The Borrower and each ERISA Affiliate have
made all required contributions to each Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.


 


(b)                                 There
are no pending or, to the Knowledge of the Borrower, threatened claims, actions
or lawsuits, or action by any Governmental Authority, with respect to any Plan
that could be reasonably be expected to have a Material Adverse Effect.  There has been no prohibited transaction or
violation of the fiduciary responsibility rules with


 


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respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.


 


(c)                                  Except
where the occurrence or existence would not individually or in the aggregate be
reasonably expected to have a Material Adverse Effect, (i) no ERISA Event
has occurred or is reasonably expected to occur; (ii) no Pension Plan has
any Unfunded Pension Liability; (iii) neither the Borrower nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither
the Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.


 


5.13                           Capitalization; Subsidiaries.


 


(a)                                  Schedule 5.13
contains (except as noted therein) complete and correct lists (i) of the
Borrower’s Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, the percentage of shares of each
class of its Capital Stock or similar equity interests outstanding owned by the
Borrower and each other Subsidiary and whether such Subsidiary is a Guarantor, (ii) of
the Borrower’s Unrestricted Subsidiaries, showing, as to each Unrestricted
Subsidiary, the correct name thereof, the jurisdiction of its organization, the
percentage of shares of each class of its Capital Stock or similar equity
interests outstanding owned by the Borrower and each other Subsidiary, (iii) to
the Borrower’s Knowledge, of the Borrower’s Affiliates, other than
Subsidiaries, and (iv) of the Borrower’s directors and executive officers.


 


(b)                                 All
of the outstanding shares of Capital Stock or similar equity interests of each
Subsidiary shown in Schedule 5.13 as being owned by the Borrower
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Borrower or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.13).


 


(c)                                  No
Subsidiary is a party to, or otherwise subject to any legal restriction or any
Contractual Obligation (other than this Agreement, the Senior Notes and
customary limitations imposed by corporate law statutes) restricting the
ability of such Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Borrower or any of its Subsidiaries
that owns outstanding shares of Capital Stock or similar equity interests of
such Subsidiary.


 


5.14                           Margin Regulations; Investment Company Act; Public
Utility Holding Company Act.


 


(a)                                  The
Borrower is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the


 


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meaning of Regulation U issued by the
FRB), or extending credit for the purpose of purchasing or carrying margin
stock.  Following the application of the
proceeds of each Borrowing or drawing under each Letter of Credit, not more
than 25% of the value of the assets (either of the Borrower only or of the
Borrower and its Subsidiaries on a consolidated basis) subject to the
provisions of Section 7.01 or Section 7.05 or subject
to any restriction contained in any agreement or instrument between the
Borrower and any Lender or any Affiliate of any Lender relating to Debt and
within the scope of Section 8.01(e) will be margin stock.


 


(b)                                 None
of the Borrower, any Person Controlling the Borrower, or any Subsidiary (i) is
a “holding company,” or a “subsidiary company” of a “holding company,” or an “affiliate”
of a “holding company” or of a “subsidiary company” of a “holding company,”
within the meaning of the Public Utility Holding Company Act of 1935, or (ii) is
or is required to be registered as an “investment company” under the Investment
Company Act of 1940.


 


5.15                           Disclosure. 
As of the Closing Date, there is no fact of which the Borrower has
Knowledge which could reasonably be expected to result in a Material Adverse
Effect which has not been set forth in this Agreement or in the certificates,
statements, agreements or other documents furnished in writing to the
Administrative Agent and the Lenders prior to or on the Closing Date in
connection with the transactions contemplated hereby.  No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf
of any Loan Party to the Administrative Agent or any Lender in connection with
the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not materially misleading; provided that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.


 


5.16                           Compliance with Laws.  Each of the Borrower and each Subsidiary is
in compliance in all material respects with the requirements of all Laws and
all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.


 


5.17                           Intellectual Property; Licenses, Etc.  The Borrower and its Subsidiaries
own, or possess the right to use, all material trademarks, service marks, trade
names, copyrights, patents, patent rights, franchises, licenses and other
intellectual property rights (collectively, “IP Rights”) that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. 
To the Knowledge of the Borrower, no slogan or other advertising device,
product, process, method, substance, part or other material now employed, or
now contemplated to be employed, by the Borrower or any Subsidiary infringes
upon any rights held by any other Person. 
No claim or litigation regarding any of the foregoing is pending or, to


 


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the Knowledge of the Borrower, threatened,
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.


 


5.18                           Common Enterprise.  The operations of the Borrower and its
Subsidiaries require financing on a basis such that the credit supplied can be
made available from time to time to the Borrower and various of its
Subsidiaries, as required for the continued successful operation of the
Borrower and its Subsidiaries as a whole. 
The Borrower has requested the Lender to make credit available hereunder
primarily for the purposes set forth in Section 6.11 and generally
for the purposes of financing the operations of the Borrower and its
Subsidiaries.  The Borrower and each of
its Subsidiaries expects to derive benefit (and the Board of Directors of the
Borrower and the Board of Directors or similar governing body of each of its
Subsidiaries has determined that such Subsidiary may reasonably be expected to
derive benefit), directly or indirectly, from a portion of the credit extended
by the Lenders hereunder, both in its separate capacity and as a member of the
group of companies, since the successful operation and condition of the
Borrower and each of its Subsidiaries is dependent on the continued successful
performance of the functions of the group as a whole.  The Borrower acknowledges that, but for the
agreement by each of the Guarantors to execute and deliver its respective
Guaranty, the Administrative Agent and the Lenders would not have made
available the credit facilities established on the terms set forth herein.


 


5.19                           Solvency. 
The Borrower is, and the Borrower and its Subsidiaries are on a
consolidated basis, Solvent.


 


5.20                           Collateral; Perfection of Liens and Security
Interests.  Payment of the
Obligations to the Lenders is or by the Closing Date will be (a) guaranteed
by each Guarantor and (b) secured by properties and assets of the Borrower
and its Domestic Subsidiaries (other than the Trust Subsidiary), including
without limitation (i) a perfected security interest in 100% of the
Covered Capital Stock of each Domestic Subsidiary (other than the Trust
Subsidiary), (ii) a perfected security interest in certain existing and
future personal property of the Borrower and each Domestic Subsidiary (other
than the Trust Subsidiary), including, but not limited to, machinery and
equipment, inventory and other goods, accounts receivable, fixtures, bank
accounts, general intangibles, financial assets, investment property, license
rights, patents, trademarks, trade names, copyrights, chattel paper, insurance
proceeds, contract rights, hedge agreements, documents, instruments,
indemnification rights, tax refunds and cash, (iii) a perfected Lien
pursuant to Deeds of Trust on Real Property Collateral owned or leased by the
Borrower and a Domestic Subsidiary, but excluding the Excluded Real Property
and (iv) a first priority perfected security interest in 66% of the
Capital Stock of any Foreign Subsidiary of the Borrower.  Each of the foregoing, and each other piece
of Collateral, is subject to a perfected first priority Lien securing the
Obligations, subject to Liens permitted to exist in accordance with the terms
of Section 7.01.


 


ARTICLE VI.

AFFIRMATIVE COVENANTS


 


So long as any
Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit (unless
the Borrower has complied with Section 2.03(g), in which case the
Borrower need only comply with


 


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Sections 6.01
and 6.02(b), (c) and (f)) shall remain outstanding,
the Borrower shall, and shall (except in the case of the covenants set forth in
Sections 6.01, 6.02 and 6.03) cause each Subsidiary
to:


 


6.01                           Financial Statements.  The Borrower shall deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders:


 


(a)                                  as
soon as available, but in any event within 95 days after the end of each fiscal
year of the Borrower (commencing with the fiscal year ended 2004), a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal year, and the related consolidated statements of income or
operations, stockholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal
year, all in reasonable detail and prepared in accordance with GAAP, audited
and accompanied by (i) a report and opinion of a Registered Public
Accounting Firm of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
generally accepted auditing standards and applicable Securities Laws and shall
not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit and (ii) as to
any fiscal year of the Borrower in which it is subject to Section 404 of
Sarbanes-Oxley, an attestation report of such Registered Public Accounting Firm
as to the Borrower’s internal controls pursuant to said Section 404; and


 


(b)                                 as
soon as available, but in any event within 50 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower (commencing
with the fiscal quarter ended March 31, 2005), a consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter, and the related consolidated statements of income or operations,
stockholders’ equity and cash flows for such fiscal quarter and for the portion
of the Borrower’s fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail, certified by a Responsible Officer of the Borrower as
fairly presenting the financial condition, results of operations, stockholders’
equity and cash flows of the Borrower and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes.


 


As to any
information contained in materials furnished pursuant to Section 6.02(c),
the Borrower shall not be separately required to furnish such information under
clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in clauses (a) and (b) above at the times
specified therein.


 


6.02                           Certificates; Other Information.  The Borrower shall deliver to the
Administrative Agent and each Lender, in form and detail satisfactory to the
Administrative Agent and the Required Lenders:


 


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(a)                                  concurrently
with the delivery of the financial statements referred to in Sections 6.01(a) and
(b), (commencing with the delivery of the financial statements for the
fiscal year ended December 31, 2004), a duly completed Compliance
Certificate signed by a Responsible Officer of the Borrower;


 


(b)                                 promptly
after any request by the Administrative Agent or any Lender, copies of any
detailed audit reports, management letters or recommendations submitted to the
board of directors (or the audit committee of the board of directors) of the
Borrower by independent accountants in connection with the accounts or books of
the Borrower or any Subsidiary, or any audit of any of them;


 


(c)                                  promptly
after the same are available, copies of each annual report, proxy or financial
statement or other report or communication sent to the stockholders of the
Borrower, and copies of all annual, regular, periodic and special reports and
registration statements which the Borrower may file or be required to file with
the SEC under Section 13 or 15(d) of the Securities Exchange Act of
1934, and not otherwise required to be delivered to the Administrative Agent
pursuant hereto;


 


(d)                                 promptly,
following each issuance of Qualified Preferred Stock, a listing of the names,
addresses, fax numbers (if available) and number of shares of Qualified
Preferred Stock acquired by each Person in such issuance;


 


(e)                                  promptly,
and in any event within five Business Days after receipt thereof by any Loan
Party or any Subsidiary thereof, copies of each written notice or other
correspondence received from the SEC (or comparable agency in any applicable
non-U.S. jurisdiction) concerning any investigation or possible investigation
or other inquiry by such agency regarding a possible violation of Securities
Laws arising from the public reporting of financial or other operational
results of any Loan Party or any Subsidiary thereof;


 


(f)                                    promptly
after the occurrence thereof, and in any event within three Business Days
thereof, notice of any Trust Preferred Interest Deferral; and


 


(g)                                 promptly,
such additional information regarding the business, financial or corporate
affairs of the Borrower or any Subsidiary, or compliance with the terms of the
Loan Documents, as the Administrative Agent or any Lender may from time to time
reasonably request.


 


Documents
required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included
in materials otherwise filed with the SEC) may be delivered electronically and
if so delivered, shall be deemed to have been delivered on the date (i) on
which the Borrower posts such documents, or provides a link thereto on the
Borrower’s website on the Internet at the website address listed on Schedule 10.02;
or (ii) on which such documents are posted on the Borrower’s behalf on an
Internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that:  (i) the Borrower shall deliver paper copies
of such documents to the Administrative Agent or any


 


75





















 


Lender that
requests the Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent and
each Lender (by facsimile or electronic mail) of the posting of any such
documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in
every instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 6.02(a) to the
Administrative Agent and each of the Lenders. 
Except for such Compliance Certificates, the Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.


 


The Borrower
hereby acknowledges that (a) the Administrative Agent and/or the Arranger will
make available to the Lenders and the L/C Issuer materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (b) certain of the
Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to the Borrower or its securities)
(each, a “Public Lender”).  The
Borrower hereby agrees that (w) all Borrower Materials that are to be made
available to Public Lenders shall be clearly and conspicuously marked “PUBLIC”
which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently
on the first page thereof; (x) by marking Borrower Materials “PUBLIC,”
the Borrower shall be deemed to have authorized the Administrative Agent, the
Arranger, the L/C Issuer and the Lenders to treat such Borrower Materials as
not containing any material non-public information with respect to the Borrower
or its securities for purposes of United States Federal and state securities
laws (provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 10.07);
(y) all Borrower Materials marked “PUBLIC” are permitted to be made
available through a portion of the Platform designated “Public Investor;” and
(z) the Administrative Agent and the Arranger shall be entitled to treat
any Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”  Notwithstanding the foregoing, the Borrower
shall be under no obligation to mark any Borrower Materials “PUBLIC.”


 


6.03                           Notices. 
The Borrower shall promptly notify the Administrative Agent and each
Lender:


 


(a)                                  of
the occurrence of any Default;


 


(b)                                 of
any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect, including without limitation any of the following to
the extent the same could reasonably be expected to result in an Material
Adverse Effect: (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Borrower or any Subsidiary; (ii) any
dispute, litigation, investigation, proceeding or suspension between the
Borrower or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or proceeding
affecting


 


76





















 


the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;


 


(c)                                  of
the occurrence of any ERISA Event;


 


(d)                                 of
any material change in accounting policies or financial reporting practices by
the Borrower or any Subsidiary;


 


(e)                                  of
the occurrence of any Internal Control Event; and


 


(f)                                    of
any notice received by the Borrower of its default under the Trust Notes, the
Trust Guaranties, or the Senior Notes.


 


Each notice
pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto.  Each
notice pursuant to Section 6.03(a) shall describe with
particularity any and all provisions of this Agreement and any other Loan
Document that have been breached.


 


6.04                           Payment of Obligations.  The Borrower shall and shall cause each
Subsidiary to pay and discharge as the same shall become due and payable, all
its obligations and liabilities, including (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary; (b) all lawful
claims which, if unpaid, would by law become a Lien upon its property, other
than a Lien permitted under Section 7.01; and (c) all Debt, as
and when due and payable on or before any applicable cure or grace periods, but
subject to any subordination provisions contained in any instrument or
agreement evidencing such Debt, except in each case where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.


 


6.05                           Preservation of Existence, Etc.  The Borrower shall and shall cause each
Subsidiary to (a) preserve, renew and maintain in full force and effect
its legal existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by Section 7.04, 7.05
or 7.06(a)(iii)(C); (b) take all reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary or desirable in
the normal conduct of its business, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.


 


6.06                           Maintenance of Properties.  The Borrower shall and shall cause each
Subsidiary to (a) maintain, preserve and protect all of its material
properties and equipment necessary in the operation of its business in good
working order and condition, ordinary wear and tear and damage by casualty and
condemnation excepted; (b) make all necessary repairs thereto and renewals
and replacements thereof except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect; and (c) use the standard of
care typical in the


 


77





















 


industry in the operation and maintenance of
its facilities.  The foregoing shall not
be deemed to restrict a Disposition permitted under Section 7.05.


 


6.07                           Maintenance of Insurance.  The Borrower shall and shall cause each
Subsidiary to maintain with financially sound and reputable insurance companies
not Affiliates of the Borrower, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by
Persons engaged in the same or similar business, of such types and in such
amounts (including retention and self-insurance levels) as are customarily
carried or maintained under similar circumstances by such other Persons.


 


6.08                           Compliance with Laws.  The Borrower shall and shall cause each
Subsidiary to comply in all material respects with the requirements of all Laws
and all orders, writs, injunctions and decrees applicable to it or to its
business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree is being contested in
good faith by appropriate proceedings diligently conducted; or (b) the
failure to comply therewith could not reasonably be expected to have a Material
Adverse Effect.


 


6.09                           Books and Records.  The Borrower shall and shall cause each
Subsidiary to maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
the Borrower or such Subsidiary, as the case may be.


 


6.10                           Inspection Rights.  The Borrower shall and shall cause each
Subsidiary to permit representatives and independent contractors of the
Administrative Agent and each Lender to visit and inspect any of its
properties, to examine its corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with its directors, officers, and independent public accountants, all
at such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, that (a) other than inspections conducted during the
existence and continuance of an Event of Default, no more than two such
inspections may be conducted during any fiscal year, one of which may be by the
Administrative Agent, and the Borrower shall only be liable for the expenses of
the Administrative Agent in connection with any such inspection (but excluding
expenses of the Administrative Agent or any Lender with respect to discussions
with the Borrower’s independent accountants, and provided the Administrative
Agent or such Lender shall pay any fees of such independent accountants
incurred with respect to such discussions) and (b) when an Event of
Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.


 


6.11                           Use of Proceeds.  The Borrower shall use the proceeds of the
Credit Extensions (a) to repay certain indebtedness, (b) for working
capital and Acquisitions, (c) to make certain Capital Expenditures, (d) to
pay the accrued interest on the Trust Notes and (e) for general corporate
purposes not in contravention of any Law or of any Loan Document.


 


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6.12                           New Subsidiaries.


 


(a)                                  Upon
the Borrower’s formation or acquisition of any new Subsidiary, other than the
Trust Subsidiary (and specifically excluding Unrestricted Subsidiaries), the
Borrower shall (x) cause such Subsidiary to promptly execute and deliver
to the Administrative Agent (i) a Joinder Agreement with such
modifications thereto as the Administrative Agent may reasonably request for
the purpose of joining such Subsidiary as a party to the Guaranty and (ii) a
Security Agreement and any related Collateral Documents required by the
Administrative Agent to secure the Obligations (including Deeds of Trust, if
such new Subsidiary owns or leases Real Property Collateral), (y) pledge
100% of the Covered Capital Stock of such Subsidiary so acquired or 66% of such
Subsidiary’s Capital Stock if such Subsidiary is a Foreign Subsidiary to secure
the Obligations.  In connection
therewith, the Borrower shall provide, contemporaneously with the delivery of
its financial statements pursuant to Section 6.01(b), resolutions,
corporate documentation, officer’s certificates and, if requested by the
Administrative Agent, opinion letters reasonably satisfactory to the
Administrative Agent reflecting the corporate status of each such Subsidiary and
the enforceability of documents executed in connection with the actions
described in subsections (x) and (y) above; provided, that upon the
Administrative Agent’s written request, the Borrower shall promptly provide
such corporate documentation with respect to any previously formed or acquired
Subsidiary for which such items have not previously been provided, and shall
thereafter provide such corporate documentation contemporaneously with the
execution and delivery of each Joinder Agreement and Security Agreement and
other related Collateral Documents in connection with any subsequent formation
or acquisition of any new Subsidiary. 
With respect to the Trust Subsidiary, the Borrower shall provide to the
Administrative Agent corporate and other related documentation as requested by
the Administrative Agent.


 


(b)                                 Upon
the occurrence of any Event of Default, the Borrower shall cause all
Unrestricted Subsidiaries to promptly execute and deliver to the Administrative
Agent a Joinder Agreement with such modifications thereto as the Administrative
Agent may reasonably request for the purpose of joining such Persons as parties
to the Guaranty, unless such Unrestricted Subsidiary is bound by a Contractual
Obligation preventing such joinder.  In
connection therewith, the Borrower shall provide, contemporaneously with the
execution and delivery of each such Joinder Agreement, corporate documentation
(to the extent not previously provided to the Administrative Agent) and, if
requested by the Administrative Agent, opinion letters reasonably satisfactory
to the Administrative Agent reflecting the corporate status of each such
Unrestricted Subsidiary and the enforceability of such Joinder Agreement.


 


6.13                           Maintenance of Trust Reserves and Trust Accounts.  The Borrower shall set aside, and shall cause
its Subsidiaries to set aside, where appropriate, in the appropriate Trust
Accounts, all applicable Trust Reserves at the time such funds are received by
the Borrower or any of its Subsidiaries, and the Borrower shall, and shall cause
its Subsidiaries to, establish and maintain all of the funding obligations of
each of the Trust Accounts in accordance with Applicable Law and the provisions
set forth herein and in the other Loan Documents.


 


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6.14                           Maintenance of Trust Balance.  The Borrower shall comply, and shall cause
its Subsidiaries to comply, with all merchandise, perpetual care and other
trusting requirements imposed on the Borrower or any of its Subsidiaries by any
and all applicable states having jurisdiction thereof, as in effect on the date
hereof (“Existing Trusting Laws”). 
If, however, the monetary trusting provisions of the laws of the
applicable state are amended during the term of this Agreement (“Amended
Trusting Laws”), the Borrower agrees that it will trust or cause to be
trusted, and will cause its Subsidiaries to trust or cause to be trusted, in
accordance with the provisions of Existing Trusting Laws or the Amended
Trusting Laws, whichever requires the Borrower or any such Subsidiary to place
greater amounts in trust, unless otherwise agreed to by the Required Lenders.


 


6.15                           Collateral. 
To secure the Obligations, the Borrower shall, and shall cause it
Subsidiaries (other than the Trust Subsidiary) to, grant (a) a first
priority Lien in all Covered Capital Stock of each of its Domestic Subsidiaries
owned by the Borrower or another Subsidiary and 66% of the Capital Stock of any
Foreign Subsidiary of the Borrower, (b) a Lien in all Real Property
Collateral and (c) a Lien in certain existing and future personal property
of the Borrower and each Domestic Subsidiary (other than the Trust Subsidiary),
including, but not limited to, machinery and equipment, inventory and other
goods, accounts receivable, fixtures, bank accounts, general intangibles,
financial assets, investment property, license rights, patents, trademarks,
trade names, copyrights, chattel paper, insurance proceeds, contract rights,
hedge agreements, documents, instruments, indemnification rights, tax refunds
and cash.  The Borrower shall, and shall
cause its Domestic Subsidiaries to provide for the benefit of the
Administrative Agent and the Lenders, all items to fully effect the foregoing,
including, without limitation, provide the Administrative Agent with UCC-1s
together with security agreements, pledge agreements, Deeds of Trust, hazard
insurance, loan or mortgagee title commitments, UCC searches, tax and Lien
searches, intellectual property documentation and registration and other
similar types of documents, consents, authorizations, licenses, instruments and
agreements relating to all property and other assets of the Borrower and its
Domestic Subsidiaries as requested by the Administrative Agent, and opinions of
local legal counsel with respect to the execution and filing thereof, and
perfection of Liens created thereby. 
Notwithstanding the foregoing, in no event shall any provision of this Section 6.15
require (i) any assets owned by any Foreign Subsidiary to be pledged or
hypothecated to secure the Obligations,(ii) more than 66% of the issued
and outstanding Capital Stock of any Foreign Subsidiary of the Borrower to be
pledged to secure the Obligations or (iii) the pledge or hypothecation of
any Excluded Real Property.


 


6.16                           Further Assurances.  Within five Business Days of a request by the
Administrative Agent, the Borrower shall or shall cause any of the Borrower’s
Subsidiaries (other than the Trust Subsidiary) to execute and deliver such
further documents and do such other acts and things as the Administrative Agent
may reasonably request in order to effect fully the purposes of this Agreement
and the other Loan Documents and to provide for payment of the Obligations and
for the granting and perfection of Liens in the Collateral in accordance with
the terms of this Agreement and the other Loan Documents.


 


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ARTICLE VII.

NEGATIVE COVENANTS


 


So long as any
Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall
remain outstanding (unless the Borrower has complied with Section 2.03(g)),
the Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly:


 


7.01                           Liens. 
Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than the following:


 


(a)                                  Liens
pursuant to any Loan Document;


 


(b)                                 Liens
for taxes not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;


 


(c)                                  carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period
of more than 30 days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person;


 


(d)                                 pledges
or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation,
other than any Lien imposed by ERISA;


 


(e)                                  deposits
to secure the performance of bids, trade contracts and leases (other than
Debt), statutory obligations, surety bonds (other than bonds related to
judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business;


 


(f)                                    easements,
rights-of-way, restrictions and other similar encumbrances affecting real
property which, in the aggregate, are not substantial in amount, and which do
not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of the business of
the applicable Person;


 


(g)                                 Liens
existing on Property acquired by the Borrower or any of its Subsidiaries prior
to its acquisition of such Property or existing on Property of a newly acquired
Subsidiary prior to the Borrower’s or any other Subsidiary’s acquisition of
stock of such newly acquired Subsidiary; provided, however, that
the aggregate outstanding principal amount of the Debt secured by the Liens
permitted by this paragraph (g) shall not, when combined with the
aggregate outstanding principal amount of Debt secured by Liens permitted by
paragraph (h) of this Section 7.01, exceed 10% of the
Borrower’s Net Worth at any time on or after the date on which such Lien is
created, assumed or incurred;


 


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(h)                                 purchase
money liens or purchase money security interests upon or in any Property
acquired or held by the Borrower or any of its Subsidiaries to secure the
purchase price of such Property or to secure Debt incurred solely for the
purpose of financing the acquisition of such Property, and deposits to secure
surety bonds related to judgments and litigation not constituting an Event of
Default under Section 8.01(h); provided that the aggregate
outstanding principal amount of the Debt secured by the Liens permitted by this
paragraph (h) shall not, when combined with the aggregate outstanding
principal amount of Debt secured by Liens permitted by paragraph (g) of
this Section 7.01, exceed 10% of the Borrower’s Net Worth at any
time on or after the date on which such Lien is created, assumed or incurred;


 


(i)                                     judgment
Liens not giving rise to an Event of Default;


 


(j)                                     Liens
reserved in or exercisable under any lease or sublease to which the Borrower or
any of its Subsidiaries is a lessee which secure the payment of rent or
compliance with the terms of such lease or sublease; provided, that the
rent under such lease or sublease is not then overdue and the Borrower or its
Subsidiary is in material compliance with the terms and conditions thereof;


 


(k)                                  any
interest or title of a lessor under any lease entered into by the Borrower or
any of its Subsidiaries in the ordinary course of its business and covering
only the assets so leased;


 


(l)                                     Liens
against equipment arising from precautionary UCC financing statement filings
regarding operating leases entered into in the ordinary course of business; and


 


(m)                               Nonconsensual
Liens in favor of banking institutions arising as a matter of law and encumbering
the deposits (including the right of set-off) held by such banking institutions
in the ordinary course of business.


 


7.02                           Investments.  Make any Investments, except:


 


(a)                                  Investments
existing on the date hereof and listed on Schedule 7.02;


 


(b)                                 Investments
held by the Borrower or such Subsidiary in the form of Liquid Investments;


 


(c)                                  Guaranty
Obligations permitted by Section 7.03;


 


(d)                                 Investments
as a result of Acquisitions, if each of the following conditions has been
satisfied:  (i) immediately before
and after giving effect to such Acquisition, no Default shall have occurred and
be continuing, (ii) immediately after giving effect to the proposed
Acquisition, the aggregate Acquisition Consideration for all Acquisitions
during each fiscal year shall not exceed the sum of (A) $20,000,000 plus
(B) for fiscal year 2005 only, the aggregate amount of Net Cash Proceeds
in excess of $125,000,000 received by the Borrower from the issuance of the
Senior Notes and not used for Acquisitions in any prior fiscal year plus
(C) the aggregate amount of Net Cash Proceeds


 


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received by the Borrower from the issuance of
Capital Stock after the Closing Date and not used for Acquisitions in any prior
fiscal year plus (D) an amount, if any, not to exceed $10,000,000,
by which the aggregate Acquisition Consideration that could have been expended
for all Acquisitions in the immediately preceding fiscal year exceeds the
actual amount expended, minus (E) the aggregate amount of Senior
Note Prepayments during such fiscal year, (iii) such Acquisition is a Core
Acquisition, (iv) such Acquisition shall not be opposed by the board of
directors or similar governing body of the Person or assets being acquired, (v) if
such Acquisition results in a Domestic Subsidiary, (A) such Subsidiary
shall execute a Joinder Agreement and a Security Agreement, (B) the
Administrative Agent, on behalf of the Lenders, shall have received such board
resolutions, officer’s certificates, opinions of counsel and Organization
Documents with respect to such Subsidiary as the Administrative Agent shall
reasonably request in connection with the actions described in clause (A) above,
(C) the Administrative Agent shall have received such items required by Section 6.12(a) (other
than as to real property) and (D) 100% of the Covered Capital Stock of
such Subsidiary so acquired shall be pledged to secure the Obligations, (vi) if
such Acquisition results in a Foreign Subsidiary of the Borrower, (A) 66%
of such Subsidiary’s Capital Stock shall be pledged to secure the Obligations
and (B) the Administrative Agent, on behalf of the Lenders, shall have
received such board resolutions, officer’s certificates, opinions of counsel
and Organization Documents with respect to such Subsidiary as the
Administrative Agent shall reasonably request in connection with the actions
described in clause (A) above, and (vii) the Property to be
acquired in connection with such Acquisition is in compliance with
Environmental Law and the Borrower, at its expense, shall have conducted such
affirmative due diligence concerning the environmental condition of such
Property (which may include environmental questionnaires or independent site
assessments) as the Borrower reasonably believes shall be warranted by such
Property;


 


(e)                                  Investments
consisting of extensions of credit in the nature of accounts receivable or
notes receivable arising from the grant of trade credit in the ordinary course
of business, and Investments received in satisfaction or partial satisfaction
thereof from financially troubled account debtors to the extent reasonably
necessary in order to prevent or limit loss;


 


(f)                                    the
Borrower’s Investment in the Trust Subsidiary, and ordinary course of business
contributions, loans or advances to, or Investments in, (a) a direct or
indirect Subsidiary of the Borrower, or (b) the Borrower;


 


(g)                                 so
long as there exists no Default both before and after giving effect to any such
transaction, Investments not covered by clauses (a) through (f) above
in an aggregate amount not to exceed at any time $3,500,000;


 


(h)                                 Investments
in or by any perpetual care trust, merchandise trust, pre-need trust,
preconstruction trust or other trust arrangements established by the Borrower
or any of its Subsidiaries in accordance with applicable Laws, regulations and
interpretations;


 


(i)                                     Investments
in less than 50% of the outstanding Voting Shares of corporations or other
business entities that own or operate funeral homes or cemeteries in


 


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jurisdictions which prohibit ownership of 50%
or more of such Voting Shares by the Borrower or a Subsidiary of the Borrower
and in which the cost of each such Investment does not exceed $10,000; and


 


(j)                                     Investments
in Unrestricted Subsidiaries, provided that (a) the business and
activities thereof are directly or indirectly reasonably related in whole or in
material part to the death care industry, and (b) the aggregate amount of
Investments by the Borrower and its Subsidiaries in Unrestricted Subsidiaries
shall not exceed $5,000,000.


 


7.03                           Debt. 
Create, incur, assume or suffer to exist any Debt, except:


 


(a)                                  Debt
under the Loan Documents;


 


(b)                                 Debt
outstanding on the date hereof and listed on Schedule 7.03 and any
refinancings, refundings, renewals or extensions thereof; provided that
the amount of such Debt is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable
premium or other reasonable amount paid, and fees and expenses reasonably
incurred, in connection with such refinancing and by an amount equal to any
existing commitments unutilized thereunder;


 


(c)                                  intercompany
Debt owed between any Subsidiary of the Borrower and the Borrower, provided
that the payment of such Debt is subordinate to the payment of the Obligations
pursuant to Section 3.2 of the Guaranty or otherwise in a manner
satisfactory to the Administrative Agent;


 


(d)                                 the
Trust Notes and the Senior Notes;


 


(e)                                  Subordinated
Debt;


 


(f)                                    obligations
in respect of any trade payables or other current operating liabilities not
more than 90 days past due, except for such trade payables or other current
operating liabilities which (i) are being contested in good faith by
appropriate proceedings and adequate reserves therefor have been established
and reflected in the financial statements of such Person in accordance with
GAAP, or (ii) do not exceed $200,000 in the aggregate outstanding at any
time;


 


(g)                                 so
long as there exists no Default both before and after giving effect to any such
transaction, obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Swap Contract, provided that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by
such Person, and not for purposes of speculation or taking a “market view;” and
(ii) such Swap Contract does not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party;


 


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(h)                                 (i) Guaranty
Obligations of the Borrower or any Guarantor in respect of Debt otherwise
permitted hereunder of the Borrower or any other Guarantor, including the
Senior Notes and (ii) Guaranty Obligations of the Borrower in respect of
the Trust Guaranties; and


 


(i)                                     so
long as there exists no Default before or after giving effect thereto, Debt not
otherwise permitted pursuant to clauses (a) through (h) above in
an aggregate principal amount not in excess of five percent (5%) of the
Borrower’s Net Worth at any time outstanding.


 


7.04                           Fundamental Changes.  Merge, dissolve, liquidate, consolidate with
or into another Person, except that, so long as there exists no Default both
before and after giving effect to any such transaction any Subsidiary may merge
or consolidate with or into, or may dissolve or liquidate and thereupon
transfer its assets to, (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person or transferee, or (ii) any
one or more other Subsidiaries, provided that when any Guarantor is
merging with another Subsidiary, the Guarantor shall be the continuing or
surviving Person.


 


7.05                           Dispositions.  Make any Disposition or enter into any
agreement to make any Disposition, except:


 


(a)                                  Dispositions
of obsolete or worn out property, whether now owned or hereafter acquired, in
the ordinary course of business;


 


(b)                                 Dispositions
of funeral merchandise, cemetery property, mausoleum spaces and related
merchandise and other inventory in the ordinary course of business;


 


(c)                                  so
long as there exists no Default both before and after giving effect to any such
transaction, Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be the Borrower or a Guarantor;


 


(d)                                 Dispositions
of assets (other than Real Property Collateral) in which the Net Cash Proceeds
thereof (if any) are used within 365 days of such Disposition to purchase
assets useful in the business of the Borrower and its Subsidiaries, provided
that (i) the aggregate amount of Net Cash Proceeds outstanding and pending
reinvestment pursuant to this clause (d) shall not exceed $2,000,000
at any time (unless any such Net Cash Proceeds in excess of $2,000,000 are held
by the Administrative Agent as Collateral or invested in Liquid Investments or
other Investments reasonably acceptable to the Administrative Agent, provided
appropriate control and other agreements are executed to provide for a
perfected Lien in favor of the Administrative Agent with respect to such
Investments) and (ii) if such Net Cash Proceeds are not used within such
365 days to purchase assets useful in the business of the Borrower and its
Subsidiaries, then such Net Cash Proceeds shall be applied in accordance with Section 2.05(d) (if
applicable); and


 


(e)                                  Dispositions
of Real Property Collateral, provided that other real property of equal or
greater value is substituted therefor as Collateral in a manner reasonably
acceptable to the Borrower and the Administrative Agent; and


 


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(f)                                    Dispositions
in the ordinary course of business of Investments of the type described in
clauses (a), (b), (f), (h), (i) and (j) of Section 7.02,
so long as there exists no Default before and after giving effect to any such
transaction.


 


provided, however, that any Disposition
pursuant to clauses (b), (d), (e) and (f) shall be for fair
market value.


 


7.06                           Restricted Payments; Issuance of Preferred Stock.


 


(a)                                  Declare
or make (or in the case of the Trust Preferred Stock, permit any making or
payment of), directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except that:


 


(i)                                     each
Subsidiary may make Restricted Payments to the Borrower and to wholly-owned
Subsidiaries (and, in the case of a Restricted Payment by a non-wholly-owned
Subsidiary, to the Borrower and any Subsidiary and to each other owner of
Capital Stock or other equity interests of such Subsidiary on a pro rata basis
based on their relative ownership interests);


 


(ii)                                  so
long as there exists no Default both before and after giving effect to any such
transaction, with respect to shares of Capital Stock purchased from the
Borrower by employees or former employees of the Borrower or any of its
Subsidiaries in connection with the exercise of stock options granted by the
Borrower, the Borrower may purchase a number of such shares, in an aggregate
amount not to exceed $5,000,000 in any fiscal year of the Borrower;


 


(iii)                               so
long as there exists no Default both before and after giving effect to any such
transaction, (x) the Borrower may make (A) payments of Dividends on
and redemptions of Existing Preferred Stock, (B) payments of Dividends on
Qualified Preferred Stock, (C) distribution of the Trust Notes to the
holders of the Trust Preferred Stock in connection with the dissolution of the
Trust Subsidiary, (D) other payments of Dividends not to exceed in
aggregate amount during any period of four consecutive fiscal quarters 25% of
Net Income (for purposes of this Section 7.06(a)(iii)(D) only,
to the extent non-cash charges or non-cash credits are included in determining
Net Income for any period, Net Income shall be (1) increased by the amount
of any such non-cash charges and (2) decreased by the amount of any such
non-cash credits) calculated for the period of four consecutive fiscal quarters
immediately preceding such period of four consecutive fiscal quarters during
which such Dividends are paid, (y) a Subsidiary may make Restricted
Payments under the Carriage Business Development Program, and (z) the
Borrower may pay interest on the Trust Notes to the Trust Subsidiary and may
cause or permit the Trust Subsidiary to declare, make or pay Dividends in
respect of the Trust Preferred Stock; and


 


(iv)                              so
long as there exists no Default both before and after giving effect to any such
transaction, the Borrower may make regularly scheduled payments of principal,
interest, premium or penalty on Subordinated Debt within


 


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the terms specified in the definition of
Subordinated Debt as set forth in this Agreement.


 


(b)                                 Issue
or have outstanding any Redeemable Preferred Stock, other than (i) Existing
Preferred Stock or (ii) Qualified Preferred Stock.


 


7.07                           Change in Nature of Business.  Engage in any material line of business
substantially different from those lines of business conducted by the Borrower
and its Subsidiaries on the date hereof or any business substantially related
or incidental thereto.


 


7.08                           Transactions with Affiliates.  Enter into any transaction of any kind with
any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate.


 


7.09                           Burdensome Agreements.  Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the
ability (i) of any Subsidiary to make Restricted Payments to the Borrower
or any Guarantor or to otherwise transfer property to the Borrower or any Guarantor,
(ii) of any Subsidiary to Guarantee the Debt of the Borrower or (iii) of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist
Liens on property of such Person; provided, however, that this
clause (iii) shall not prohibit any negative pledge incurred or
provided (A) with respect to specific Property encumbered to secure
payment of Debt related to such Property or (B) as provided in the
documents governing the Senior Notes; or (b) requires the grant of a Lien
to secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person, except as provided in the documents governing the
Senior Notes.


 


7.10                           Use of Proceeds.  Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally incurred
for such purpose.


 


7.11                           Financial Covenants.


 


(a)                                  Maximum
Leverage Ratio.  Permit the Leverage
Ratio at any time during any period of four fiscal quarters of the Borrower set
forth below in which the last fiscal quarter ends after the Closing Date to be
greater than the ratio set forth below opposite such period:


 


	
  Four
  Fiscal Quarters Ending

  	
   

  	
  Maximum

  Leverage Ratio

  	
   

  
	
  Closing Date through March 30, 2006

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  March 31, 2006 through March 30,
  2007

  	
   

  	
  3.75 to 1.00

  	
   

  
	
  March 31, 2007 through March 30, 2008

  	
   

  	
  3.50 to 1.00

  	
   

  
	
  March 31, 2008 and each fiscal quarter
  thereafter

  	
   

  	
  3.25 to 1.00

  	
   

  



 


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(b)                                 Minimum
Fixed Charge Coverage Ratio.  Permit
the Fixed Charge Coverage Ratio as of the end of any period of four consecutive
fiscal quarters in which the last fiscal quarter ends after the Closing Date to
be less than 1.50 to 1.00.


 


7.12                           Maintenance of Ownership of Subsidiaries.  Except as permitted by Sections 7.04
and 7.06(a)(iii)(C), the Borrower will not, and will not permit any of
its Subsidiaries to, sell or otherwise dispose of any shares of Capital Stock
of any of its Subsidiaries or permit any of its Subsidiaries to issue, sell or
otherwise dispose of any shares of its Capital Stock or the Capital Stock of
any of its Subsidiaries, except (a) where required by Applicable Law, up
to 20% of the outstanding Capital Stock of any of the Borrower’s Subsidiaries
may be issued to and held by employees or consultants of the Borrower or any
such Subsidiary who are licensed funeral directors, (b) the Trust
Subsidiary may issue the Trust Preferred Stock, and (c) in connection with
Carriage Business Development Program not more than ten Subsidiaries may issue
preferred securities to not more than 20 individuals in the aggregate.


 


7.13                           Trust Funds.  Without the prior written consent of the
Required Lenders or as otherwise required by Applicable Law, the Borrower will
not withdraw or otherwise remove, and will cause all of its Subsidiaries not to
withdraw or otherwise remove, any monies or other assets (whether principal,
interest or other earnings) from any merchandise, service or other trust fund
or trust account except (a) for the purpose of providing the merchandise
or services which are intended to be provided out of such trust fund or trust
account and (b) withdrawals permitted by Law where, after giving effect to
any such withdrawal, the Borrower or any Subsidiary is in compliance with Section 6.14.


 


7.14                           Settlement of Litigation.  Without prior written notice to the Lenders,
the Borrower will not, and will cause all of its Subsidiaries not to, settle or
compromise, during any fiscal year of the Borrower, any threatened action or
proceeding affecting the Borrower or any of its Subsidiaries before any court,
Governmental Authority or arbitrator, if the amount of the proposed settlement
or compromise required to be paid by the Borrower or any of its Subsidiaries
(excluding any amounts to be paid or to be reimbursed to the Borrower or any of
its Subsidiaries from any insurance proceeds), together with the amount of all
settlements and compromises (excluding any amounts paid or to be reimbursed to
the Borrower or any of its Subsidiaries from any insurance proceeds) previously
paid by the Borrower or any of its Subsidiaries during such fiscal year of the
Borrower, exceeds $2,000,000.


 


7.15                           Modification of Senior Notes.  Without the prior written consent of the
Required Lenders, the Borrower will not make any amendment or modification to
the Senior Notes which renders the economic terms of the Senior Notes
materially more favorable to the holders of the Senior Notes or materially less
favorable to the Borrower or the applicable Subsidiary.


 


7.16                           Prepayment of Senior Notes.  The Borrower shall not make any voluntary
prepayment, purchase, repurchase, redemption or defeasance with respect to all
or any portion of the Senior Notes (collectively, a “Senior Note Payment”),
unless (i) immediately before and after


 


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giving effect to any such Senior Note
Prepayment, there exists no Default and (ii) immediately after giving
effect to any such Senior Note Prepayment, Availability is at least
$20,000,000.


 


ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES


 


8.01                           Events of Default.  Any of the following shall constitute an
Event of Default:


 


(a)                                  Non-Payment.  The Borrower or any other Loan Party fails to
pay (i) when and as required to be paid herein, any amount of principal of
any Loan or any L/C Obligation, or (ii) within three days after the same
becomes due, any interest on any Loan or on any L/C Obligation, or any fee due
hereunder, or (iii) within five days after the same becomes due, any other
amount payable hereunder or under any other Loan Document; or


 


(b)                                 Specific
Covenants.  The Borrower fails to
perform or observe any term, covenant or agreement contained in any of Section 6.03,
6.05, 6.10, 6.11 or 6.12 or Article VII;
or


 


(c)                                  Other
Defaults.  Any Loan Party fails to
perform or observe any other covenant or agreement (not specified in subsection (a) or
(b) above) contained in any Loan Document on its part to be performed or
observed and such failure continues for 30 days; or


 


(d)                                 Representations
and Warranties.  Any representation,
warranty, certification or statement of fact made or deemed made by or on
behalf of the Borrower or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith
shall be incorrect or misleading when made or deemed made; or


 


(e)                                  Cross-Default.  (i) The Borrower or any Subsidiary or
Unrestricted Subsidiary (A) fails to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise) in
respect of any Debt or Guarantee (other than Debt hereunder and Debt under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than $5,000,000, after the
giving of any required notice and the expiration of any applicable grace period
or (B) fails to observe or perform any other agreement or condition
relating to any such Debt or Guarantee or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder
or holders of such Debt or the beneficiary or beneficiaries of such Guarantee
(or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, after the giving any required notice and the
expiration of any applicable grace period, such Debt to be demanded or to
become due or to be repurchased, prepaid, defeased or redeemed (automatically
or otherwise), or an offer to repurchase, prepay, defease or redeem such Debt
to be made, prior to its stated maturity, or such Guarantee to become


 


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payable or cash collateral of more than
$5,000,000 in respect thereof to be (and is entitled to be) demanded; or (ii) there
occurs under any Swap Contract an Early Termination Date (as defined in such
Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which the Borrower or any Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Borrower or such Subsidiary as a result thereof is greater
than $5,000,000; or


 


(f)                                    Insolvency
Proceedings, Etc.  Any Loan Party or
any of its Subsidiaries or Unrestricted Subsidiaries institutes or consents to
the institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or
consent of such Person and the appointment continues undischarged or unstayed
for 60 calendar days; or any proceeding under any Debtor Relief Law relating to
any such Person or to all or any material part of its property is instituted
without the consent of such Person and continues undismissed or unstayed for 60
calendar days, or an order for relief is entered in any such proceeding; or


 


(g)                                 Inability
to Pay Debts; Attachment.  (i) The
Borrower or any Subsidiary or Unrestricted Subsidiary becomes unable or admits
in writing its inability or fails generally to pay its debts as they become
due, or (ii) any writ or warrant of attachment or execution or similar
process is issued or levied against all or any material part of the property of
any such Person and is not released, vacated or fully bonded within 30 days
after its issue or levy; or


 


(h)                                 Judgments.  There is entered against the Borrower or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding $2,000,000 (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or (ii) any
one or more non-monetary final judgments that have, or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any
creditor upon such judgment or order, or (B) there is a period of 60
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or


 


(i)                                     ERISA.  (i) An ERISA Event occurs with respect
to a Pension Plan or Multiemployer Plan which has resulted or could reasonably
be expected to result in liability of the Borrower under Title IV of ERISA
to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in
excess of $1,000,000, or (ii) the Borrower or any ERISA Affiliate fails to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of $1,000,000;
or


 


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(j)                                     Invalidity
of Loan Documents.  Any Loan
Document, at any time after its execution and delivery and for any reason other
than as expressly permitted hereunder or thereunder or satisfaction in full of
all the Obligations, ceases to be in full force and effect; or any Loan Party
or any other Person contests in any manner the validity or enforceability of
any Loan Document; or any Loan Party denies that it has any or further
liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document; or


 


(k)                                  Change
of Control.  There occurs any Change
of Control with respect to the Borrower; or


 


(l)                                     Other
Obligations.  (i) Any event
shall occur or condition shall exist under the Trust Preferred Stock, Trust
Notes or Trust Guaranties (collectively, the “Debt Documents”), after
the applicable grace period, if any, specified in such Debt Document, if the
effect of such event or condition is to accelerate the maturity of the Trust
Preferred Stock or Trust Notes, as applicable; (ii) without the prior
written consent of the Required Lenders, any modification shall be made to any
Debt Document which (a) renders the subordination provisions thereof more
favorable to the holders of the Trust Preferred Stock or Trust Notes, as
applicable, or less favorable to the Lenders, or (b) renders the economic
terms of the Trust Preferred Stock or Trust Notes, as applicable, materially
more favorable to the holders of the Trust Preferred Stock or Trust Notes, as
applicable, or materially less favorable to the Borrower or the applicable
Subsidiary, or (iii) any event shall occur under any Debt Document that
would permit the holders thereof to require the redemption or mandatory
prepayment thereof; or


 


(m)                               Internal
Control Event.  An Internal Control
Event shall occur, the result of which could reasonably be expected to have a
Material Adverse Effect.


 


8.02                           Remedies Upon Event of Default.  If any Event of Default occurs and is
continuing, the Administrative Agent shall, at the request of, or may, with the
consent of, the Required Lenders, take any or all of the following actions:


 


(a)                                  declare
the commitment of each Lender to make Loans and any obligation of the L/C
Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;


 


(b)                                 declare
the unpaid principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower;


 


(c)                                  require
that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to
the then Outstanding Amount thereof); and


 


(d)                                 exercise
on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders under the Loan Documents or applicable law;


 


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provided, however, that upon the
occurrence of an actual or deemed entry of an order for relief with respect to
the Borrower under the Bankruptcy Code of the United States, the obligation of
each Lender to make Loans and any obligation of the L/C Issuer to make L/C
Credit Extensions shall automatically terminate, the unpaid principal amount of
all outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of the Borrower to
Cash Collateralize the L/C Obligations as aforesaid shall automatically become
effective, in each case without further act of the Administrative Agent or any
Lender.


 


8.03                           Application of Funds.  After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become
immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in the proviso to Section 8.02),
any amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:


 


First,
to payment of that portion of the Obligations constituting fees, indemnities,
expenses and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and amounts payable under Article III)
payable to the Administrative Agent in its capacity as such;


 


Second,
to payment of that portion of the Obligations constituting fees, indemnities
and other amounts (other than principal, interest and Letter of Credit Fees)
payable to the Lenders and the L/C Issuer (including fees, charges and
disbursements of counsel to the respective Lenders and the L/C Issuer and
amounts payable under Article III), ratably among them in
proportion to the respective amounts described in this clause Second
payable to them;


 


Third,
to payment of that portion of the Obligations constituting accrued and unpaid
Letter of Credit Fees and interest on the Loans, L/C Borrowings and other
Obligations, ratably among the Lenders and the L/C Issuer in proportion to the
respective amounts described in this clause Third payable to them;


 


Fourth,
to payment of that portion of the Obligations constituting unpaid principal of
the Loans and L/C Borrowings, ratably among the Lenders and the L/C Issuer in
proportion to the respective amounts described in this clause Fourth
held by them;


 


Fifth,
to the Administrative Agent for the account of the L/C Issuer, to Cash
Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit;


 


Sixth,
to payment of Swap Obligations, ratably among the Guarantied Parties (as
defined in the Guaranty) and the Secured Lenders, in proportion to the
respective amounts described in this clause Sixth held by them;


 


Seventh,
to any remaining outstanding and unpaid Obligations, ratably among the
Guarantied Parties and the Secured Lenders in proportion to the respective
amounts described in this clause Seventh held by them; and


 


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Last,
the balance, if any, after all of the Obligations have been indefeasibly paid
in full, to the Borrower or as otherwise required by Law.


 


Subject to Section 2.03(c), amounts used to Cash
Collateralize the aggregate undrawn amount of Letters of Credit pursuant to
clause Fifth above shall be applied to satisfy drawings under such Letters of
Credit as they occur.  If any amount
remains on deposit as Cash Collateral after all Letters of Credit have either
been fully drawn or expired, such remaining amount shall be applied to the other
Obligations, if any, in the order set forth above.


 


ARTICLE IX.

ADMINISTRATIVE AGENT


 


9.01                           Appointment and Authority.


 


(a)                                  Each
of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America
to act on its behalf as the Administrative Agent hereunder and under the other
Loan Documents and authorizes the Administrative Agent to take such actions on
its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such actions and powers as
are reasonably incidental thereto.  The
provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and neither the Borrower
nor any other Loan Party shall have rights as a third party beneficiary of any
of such provisions.


 


(b)                                 The
Administrative Agent shall also act as the “collateral agent” under the Loan
Documents, and each of the Lenders (in its capacities as a Lender and Swing
Line Lender) and the L/C Issuer hereby irrevocably appoints and authorizes the
Administrative Agent to act as the agent of such Lender and the L/C Issuer for
purposes of acquiring, holding and enforcing any and all Liens on Collateral
granted by any of the Loan Parties to secure any of the Obligations, together
with such powers and discretion as are reasonably incidental thereto.  In this connection, the Administrative Agent,
as “collateral agent’ and any co-agents, sub-agents and attorneys-in-fact
appointed by the Administrative Agent pursuant to Section 9.05 for
purposes of holding or enforcing any Lien on the Collateral (or any portion
thereof) granted under the Collateral Documents, or for exercising any rights
and remedies thereunder at the direction of the Administrative Agent), shall be
entitled to the benefits of all provisions of this Article IX and Article X
(including Section 10.04, as though such co-agents, sub-agents and
attorneys-in-fact were the “collateral agent” under the Loan Documents) as if
set forth in full herein with respect thereto.


 


9.02                           Rights as a Lender.  The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity.  Such Person and its
Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with


 


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the Borrower or any Subsidiary or other
Affiliate thereof as if such Person were not the Administrative Agent hereunder
and without any duty to account therefor to the Lenders.


 


9.03                           Exculpatory Provisions.  The Administrative Agent shall not
have any duties or obligations except those expressly set forth herein and in
the other Loan Documents.  Without
limiting the generality of the foregoing, the Administrative Agent:


 


(a)                                  shall
not be subject to any fiduciary or other implied duties, regardless of whether
a Default has occurred and is continuing;


 


(b)                                 shall
not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative
Agent is required to exercise as directed in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and


 


(c)                                  shall
not, except as expressly set forth herein and in the other Loan Documents, have
any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.


 


The
Administrative Agent shall not be liable for any action taken or not taken by
it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02 or (ii) in
the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until notice describing such
Default is given to the Administrative Agent by the Borrower, a Lender or the
L/C Issuer.


 


The
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or
in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence of any Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any
other Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to
the Administrative Agent.


 


9.04                           Reliance by Administrative Agent.  The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing (including any electronic message,


 


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Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. 
The Administrative Agent also may rely upon any statement made to it
orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or the L/C
Issuer, the Administrative Agent may presume that such condition is
satisfactory to such Lender or the L/C Issuer unless the Administrative Agent
shall have received notice to the contrary from such Lender or the L/C Issuer
prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.


 


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


 


9.06                           Resignation of Administrative Agent.  The Administrative Agent may at
any time give notice of its resignation to the Lenders, the L/C Issuer and the
Borrower.  Upon receipt of any such
notice of resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an
office in the United States.  If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may on behalf of the Lenders and the L/C Issuer, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided
that if the Administrative Agent shall notify the Borrower and the Lenders that
no qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents (except that in the
case of any collateral security held by the Administrative Agent on behalf of
the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender and
the L/C Issuer directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this


 


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Section). 
The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. 
After the retiring Administrative Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 10.04
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.


 


Any
resignation by Bank of America as Administrative Agent pursuant to this Section shall
also constitute its resignation as L/C Issuer and Swing Line Lender.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer and Swing Line Lender, (b) the retiring
L/C Issuer and Swing Line Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (c) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect
to such Letters of Credit.


 


9.07                           Non-Reliance on Administrative Agent and Other
Lenders.  Each Lender and the
L/C Issuer acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement.  Each Lender and the L/C Issuer also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.


 


9.08                           No Other Duties, Etc. 
Anything herein to the contrary notwithstanding, none of the
Book Managers, Arrangers or Syndication Agents listed on the cover page hereof
shall have any powers, duties or responsibilities under this Agreement or any
of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, a Lender or the L/C Issuer hereunder.


 


9.09                           Administrative Agent May File Proofs of
Claim.  In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective
of whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise


 


(a)                                  to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, L/C Obligations and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable


 


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in order to have the claims of the Lenders,
the L/C Issuer and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the L/C Issuer and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders, the L/C Issuer and the
Administrative Agent under Sections 2.03(i) and (j), 2.09
and 10.04) allowed in such judicial proceeding; and


 


(b)                                 to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;


 


and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is
hereby authorized by each Lender and the L/C Issuer to make such payments to
the Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders and the L/C
Issuer, to pay to the Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent
and its agents and counsel, and any other amounts due the Administrative Agent
under Sections 2.09 and 10.04.


 


Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender or the L/C
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.


 


9.10                           Collateral and Guaranty Matters.  The Lenders and the L/C Issuer
irrevocably authorize the Administrative Agent, at its option and in its
discretion,


 


(a)                                  to
release any Lien on any property granted to or held by the Administrative Agent
under any Loan Document (i) upon termination of the Aggregate Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit (or on
the date which is 120 days after the Cash Collateralization of such Letters of
Credit in accordance with Section 2.03(g)), (ii) that is sold
or to be sold as part of or in connection with any sale permitted hereunder or
under any other Loan Document, or (iii) subject to Section 10.01,
if approved, authorized or ratified in writing by the Required Lenders;


 


(b)                                 to
subordinate any Lien on any property granted to or held by the Administrative
Agent under any Loan Document to the holder of any Lien on such property that
is permitted by Section 7.01(i); and


 


(c)                                  to
release any Guarantor from its obligations under the Guaranty if such Person
ceases to be a Subsidiary as a result of a transaction permitted hereunder.


 


Upon request
by the Administrative Agent at any time, the Required Lenders will confirm in
writing the Administrative Agent’s authority to release or subordinate its
interest in particular types or items of property, or to release any Guarantor
from its obligations under the Guaranty pursuant to this Section 9.10.  In each case as specified in this Section 9.10,
the Administrative Agent will, at the Borrower’s expense, execute and deliver
to the applicable Loan


 


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Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents, or to release such Guarantor from its obligations
under the Guaranty, in each case in accordance with the terms of the Loan
Documents and this Section 9.10.


 


ARTICLE X.

MISCELLANEOUS


 


10.01                     Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Borrower or any other Loan Party therefrom, shall be effective unless in
writing signed by the Required Lenders and the Borrower or the applicable Loan
Party, as the case may be, and acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however,
that no such amendment, waiver or consent shall:


 


(a)                                  waive
any condition set forth in Section 4.01(a) without the written
consent of each Lender;


 


(b)                                 extend
or increase the Commitment of any Lender (or reinstate any Commitment
terminated pursuant to Section 8.02) without the written consent of
such Lender;


 


(c)                                  postpone
any date fixed by this Agreement or any other Loan Document for any payment
(excluding mandatory prepayments) of principal, interest, fees or other amounts
due to the Lenders (or any of them) hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby;


 


(d)                                 reduce
the principal of, or the rate of interest specified herein on, any Loan or L/C
Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01)
any fees or other amounts payable hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby; provided,
however, that only the consent of the Required Lenders shall be
necessary (i) to amend the definition of “Default Rate” or to waive any
obligation of the Borrower to pay interest or Letter of Credit Fees at the
Default Rate or (ii) to amend any financial covenant hereunder (or any
defined term used therein) even if the effect of such amendment would be to
reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee
payable hereunder;


 


(e)                                  change
Section 2.13 or Section 8.03 in a manner that would
alter the pro rata sharing of payments required thereby without the written
consent of each Lender;


 


(f)                                    change
any provision of this Section or the definition of “Required Lenders”
or any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder, without the written consent of
each Lender; or


 


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(g)                                 (i) release
all or substantially all of the Guarantors from the Guaranty without the
written consent of each Lender or (ii) release all or substantially all of
the Collateral in any transaction or series of related transactions without the
written consent of each Lender;


 


and, provided further, that (i) no amendment, waiver or consent
shall, unless in writing and signed by the L/C Issuer in addition to the
Lenders required above, affect the rights or duties of the L/C Issuer under
this Agreement or any Issuer Document relating to any Letter of Credit issued
or to be issued by it; (ii) no amendment, waiver or consent shall, unless
in writing and signed by the Swing Line Lender in addition to the Lenders
required above, affect the rights or duties of the Swing Line Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required
above, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document; and (iv) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto.  Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that
the Commitment of such Lender may not be increased or extended without the
consent of such Lender.


 


10.02                     Notices; Effectiveness; Electronic Communication.


 


(a)                                  Notices
Generally.  Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in subsection (b) below), all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:


 


(i)                                     if
to the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line
Lender, to the address, facsimile number, electronic mail address or telephone
number specified for such Person on Schedule 10.02; and


 


(ii)                                  if
to any other Lender, to the address, facsimile number, electronic mail address
or telephone number specified in its Administrative Questionnaire.


 


Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient).  Notices delivered
through electronic communications to the extent provided in subsection (b) below,
shall be effective as provided in such subsection (b).


 


(b)                                 Electronic
Communications.  Notices and other
communications to the Lenders and the L/C Issuer hereunder may be delivered or
furnished by electronic communication (including e-mail and Internet or
intranet websites) pursuant to procedures approved by the Administrative Agent,
provided that the foregoing shall not


 


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apply to notices to any Lender or the L/C
Issuer pursuant to Article II if such Lender or the L/C Issuer, as
applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication.  The Administrative Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.


 


Unless the
Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the recipient, such
notice or communication shall be deemed to have been sent at the opening of
business on the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that
such notice or communication is available and identifying the website address
therefor.


 


(c)                                  The
Platform.  THE PLATFORM IS
PROVIDED “AS IS” AND “AS AVAILABLE.”  THE
AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF
THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM
LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING 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 ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM.  In no event
shall the Administrative Agent or any of its Related Parties (collectively, the
“Agent Parties”) have any liability to the Borrower, any Lender, the L/C
Issuer or any other Person for losses, claims, damages, liabilities or expenses
of any kind (whether in tort, contract or otherwise) arising out of the
Borrower’s or the Administrative Agent’s transmission of Borrower Materials
through the Internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by
a final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Agent Party; provided, however, that in no event
shall any Agent Party have any liability to the Borrower, any Lender, the L/C
Issuer or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages).


 


(d)                                 Change
of Address, Etc.  Each of the
Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.  Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to the Borrower, the


 


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Administrative Agent, the L/C Issuer and the
Swing Line Lender. In addition, each Lender agrees to notify the Administrative
Agent from time to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
electronic mail address to which notices and other communications may be sent
and (ii) accurate wire instructions for such Lender.


 


(e)                                  Reliance
by Administrative Agent, L/C Issuer and Lenders.  The Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon
any notices (including telephonic Revolving Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of the Borrower even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof.  The Borrower shall indemnify
the Administrative Agent, the L/C Issuer, each Lender and the Related Parties
of each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Borrower.  All telephonic notices to
and other telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.


 


10.03                     No Waiver; Cumulative Remedies.  No failure by any Lender, the L/C Issuer or
the Administrative Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.


 


10.04                     Expenses; Indemnity; Damage Waiver.


 


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


 


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out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.


 


(b)                                 Indemnification
by the Borrower.  THE BORROWER SHALL
INDEMNIFY THE ADMINISTRATIVE AGENT (AND ANY SUB-AGENT THEREOF), EACH LENDER AND
THE L/C ISSUER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH
SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH
INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND
RELATED EXPENSES (INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL
FOR ANY INDEMNITEE), AND SHALL INDEMNIFY AND HOLD HARMLESS EACH INDEMNITEE FROM
ALL FEES AND TIME CHARGES AND DISBURSEMENTS FOR ATTORNEYS WHO MAY BE
EMPLOYEES OF ANY INDEMNITEE, INCURRED BY ANY INDEMNITEE OR ASSERTED AGAINST ANY
INDEMNITEE BY ANY THIRD PARTY OR BY THE BORROWER OR ANY OTHER LOAN PARTY
ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (I) THE EXECUTION OR
DELIVERY OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR
INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES
HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER, THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, OR, IN THE
CASE OF THE ADMINISTRATIVE AGENT (AND ANY SUB-AGENT THEREOF) AND ITS RELATED
PARTIES ONLY, THE ADMINISTRATION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, (II) ANY LOAN OR LETTER OF CREDIT OR THE USE OR PROPOSED USE OF
THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE L/C ISSUER TO HONOR A
DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN
CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH
LETTER OF CREDIT), (III) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF
HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER
OR ANY OF ITS SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY
TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (IV) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY, WHETHER
BROUGHT BY A THIRD PARTY OR BY THE BORROWER OR ANY OTHER LOAN PARTY, AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING,
IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF
THE INDEMNITEE; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO
ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR RELATED EXPENSES (X) ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF


 


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SUCH INDEMNITEE OR (Y) RESULT FROM A
CLAIM BROUGHT BY THE BORROWER OR ANY OTHER LOAN PARTY AGAINST AN INDEMNITEE FOR
BREACH IN BAD FAITH OF SUCH INDEMNITEE’S OBLIGATIONS HEREUNDER OR UNDER ANY
OTHER LOAN DOCUMENT, IF THE BORROWER OR SUCH LOAN PARTY HAS OBTAINED A FINAL
AND NONAPPEALABLE JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT
OF COMPETENT JURISDICTION.  Each Indemnitee
agrees that in the event that any investigation, litigation or proceeding is
asserted or threatened in writing or instituted against it or any other
Indemnitee, or any remedial, removal or response action which is requested of
it or any other Indemnitee, for which any Indemnitee may desire indemnity or
defense hereunder, such Indemnitee shall notify the Borrower in writing of such
event; provided that the failure to so notify the Borrower shall not
affect the right of any Indemnitee to seek or receive indemnification under
this Section.


 


(c)                                  Reimbursement
by Lenders.  To the extent that the
Borrower for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any
sub-agent thereof), the L/C Issuer or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the L/C Issuer or such Related Party, as the case may be,
such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred
by or asserted against the Administrative Agent (or any such sub-agent) or the
L/C Issuer in its capacity as such, or against any Related Party of any of the
foregoing acting for the Administrative Agent (or any such sub-agent) or L/C Issuer
in connection with such capacity.  The
obligations of the Lenders under this subsection (c) are subject to
the provisions of Section 2.12(d).


 


(d)                                 Waiver
of Consequential Damages, Etc.  To
the fullest extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the transactions contemplated hereby or thereby, any Loan
or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby, except to the extent such damages are
determined by a court of competent jurisdiction in a final and nonappealable
judgment to have resulted from such Indemnitee’s gross negligence or willful
misconduct.


 


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


 


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(f)                                    Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent and the L/C Issuer, the
replacement of any Lender, the termination of the Aggregate Commitments and the
repayment, satisfaction or discharge of all the other Obligations.


 


10.05                     Payments Set Aside. 
To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or
the Administrative Agent, the L/C Issuer or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, the L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each
Lender and the L/C Issuer severally agrees to pay to the Administrative Agent
upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon
from the date of such demand to the date such payment is made at a rate per
annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders and the L/C
Issuer under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.


 


10.06                     Successors and Assigns.


 


(a)                                  Successors
and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that neither the Borrower nor any other Loan Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except (i) to
an Eligible Assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the
provisions of subsection (d) of this Section, or (iii) by way of
pledge or assignment of a security interest subject to the restrictions of subsection (f) of
this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void).  Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of
this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the L/C Issuer and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.


 


(b)                                 Assignments
by Lenders.  Any Lender may at any
time assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its Commitment
and the Loans (including for purposes of this subsection (b),
participations in L/C Obligations and in Swing Line Loans) at the time owing to
it); provided that


 


104





















 


(i)                                     except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $1,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be unreasonably withheld
or delayed); provided, however, that concurrent assignments to
members of an Assignee Group and concurrent assignments from members of an
Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and
members of its Assignee Group) will be treated as a single assignment for
purposes of determining whether such minimum amount has been met;


 


(ii)                                  each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned, except that this clause (ii) shall
not apply to rights in respect of Swing Line Loans;


 


(iii)                               any
assignment of a Commitment must be approved by the Administrative Agent, the
L/C Issuer and the Swing Line Lender unless the Person that is the proposed
assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and


 


(iv)                              the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee, in the amount, if any, required as set forth in Schedule 10.06,
and the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.


 


Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the
effective date specified in each Assignment and Assumption, the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 3.01,
3.04, 3.05, and 10.04 with respect to facts and
circumstances occurring prior to the effective date of such assignment); provided,
however, that the Borrower shall not as a result of any assignment,
delegation or participation by any Lender, incur any increased liability for
Indemnified Taxes or


 


105





















 


Other Taxes pursuant to Section 3.01 at the time of such
assignment, delegation or participation. 
Upon request, the Borrower (at its expense) shall execute and deliver a
Note to the assignee Lender.  Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this
Section.


 


(c)                                  Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by each of the Borrower
and the L/C Issuer at any reasonable time and from time to time upon reasonable
prior notice.  In addition, at any time
that a request for a consent for a material or substantive change to the Loan
Documents is pending, any Lender may request and receive from the
Administrative Agent a copy of the Register.


 


(d)                                 Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower or
any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans
(including such Lender’s participations in L/C Obligations and/or Swing Line
Loans) owing to it); provided that (i) such Lender’s obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent, the Lenders
and the L/C Issuer shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under this Agreement.


 


Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in the first proviso to Section 10.01
that affects such Participant.  Subject
to subsection (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.04
and 3.05 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section.  To the extent permitted by
law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.13 as though it were
a Lender.


 


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(e)                                  Limitations
upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Section 3.01
or 3.04 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent. 
A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of Section 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 3.01(e) as
though it were a Lender.


 


(f)                                    Certain
Pledges.  Any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
this Agreement (including under its Note, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release
such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.


 


(g)                                 Electronic
Execution of Assignments.  The words “execution,”
“signed,” “signature,” and words of like import in any Assignment and
Assumption shall be deemed to include electronic signatures or the keeping of
records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.


 


(h)                                 Resignation
as L/C Issuer or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary
contained herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America may, (i) upon
30 days’ notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon
30 days’ notice to the Borrower, resign as Swing Line Lender.  In the event of any such resignation as L/C
Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of Bank of America as L/C Issuer or Swing Line
Lender, as the case may be.  If Bank of
America resigns as L/C Issuer, it shall retain all the rights, powers,
privileges and duties of the L/C Issuer hereunder with respect to all Letters
of Credit outstanding as of the effective date of its resignation as L/C Issuer
and all L/C Obligations with respect thereto (including the right to require
the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed
Amounts pursuant to Section 2.03(c)).  If Bank of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.04(c). 
Upon the appointment of a successor L/C Issuer and/or Swing Line Lender,
(a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring L/C Issuer or Swing


 


107





















 


Line Lender, as the case may be, and (b) the
successor L/C Issuer shall issue letters of credit in substitution for the
Letters of Credit, if any, outstanding at the time of such succession or make
other arrangements satisfactory to Bank of America to effectively assume the
obligations of Bank of America with respect to such Letters of Credit.


 


10.07                     Treatment of Certain Information;
Confidentiality.  Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates’ and to its and its Affiliates’
respective partners, directors, officers, employees, agents, advisors and
representatives (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority purporting to have jurisdiction over it (including
any self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the
consent of the Borrower or (h) to the extent such Information
(x) becomes publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, any Lender, the L/C
Issuer or any of their respective Affiliates on a nonconfidential basis from a
source other than the Borrower.


 


For purposes
of this Section, “Information” means all information received from the
Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of
their respective businesses, other than any such information that is available
to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential
basis prior to disclosure by the Borrower or any Subsidiary, provided
that, in the case of information received from the Borrower or any Subsidiary
after the date hereof, such information is clearly identified at the time of
delivery as confidential.  Any Person
required to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.


 


Each of the
Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the
Information may include material non-public information concerning the Borrower
or a Subsidiary, as the case may be, (b) it has developed compliance
procedures regarding the use of material non-public information and (c) it
will handle such material non-public information in accordance with applicable
Law, including Federal and state securities Laws.


 


10.08                     Right of Setoff. 
If an Event of Default shall have occurred and be continuing,
each Lender, the L/C Issuer and each of their respective Affiliates is hereby
authorized at any time and from time to time, after obtaining the prior written
consent of the Administrative Agent, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general


 


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or special, time or demand, provisional or
final, in whatever currency) at any time held and other obligations (in
whatever currency) at any time owing by such Lender, the L/C Issuer or any such
Affiliate to or for the credit or the account of the Borrower or any other Loan
Party against any and all of the obligations of the Borrower or such Loan Party
now or hereafter existing under this Agreement or any other Loan Document to
such Lender or the L/C Issuer, irrespective of whether or not such Lender or
the L/C Issuer shall have made any demand under this Agreement or any other
Loan Document and although such obligations of the Borrower or such Loan Party
may be contingent or unmatured or are owed to a branch or office of such Lender
or the L/C Issuer different from the branch or office holding such deposit or
obligated on such indebtedness.  The
rights of each Lender, the L/C Issuer and their respective Affiliates under
this Section are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the L/C Issuer or their respective
Affiliates may have.  Each Lender and the
L/C Issuer agrees to notify the Borrower and the Administrative Agent promptly
after any such setoff and application, provided that the failure to give
such notice shall not affect the validity of such setoff and application.


 


10.09                     Interest Rate Limitation.  Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the Highest Lawful Rate.  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Highest Lawful Rate, the
excess interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest
contracted for, charged, or received by the Administrative Agent or a Lender
exceeds the Highest Lawful Rate, such Person may, to the extent permitted by
Applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate,
and spread in equal or unequal parts the total amount of interest throughout
the contemplated term of the Obligations hereunder.


 


10.10                     Counterparts; Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement and the other Loan Documents constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof.  Except as
provided in Section 4.01, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken
together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as
delivery of a manually executed counterpart of this Agreement.


 


10.11                     Survival of Representations and Warranties.  All representations and warranties
made hereunder and in any other Loan Document or other document delivered
pursuant hereto or thereto or in connection herewith or therewith shall survive
the execution and delivery hereof and thereof. 
Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and
notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the


 


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time of any Credit Extension, and shall
continue in full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall
remain outstanding.


 


10.12                     Severability.  If
any provision of this Agreement or the other Loan Documents is held to be
illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties
shall endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions.  The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.


 


10.13                     Replacement of Lenders.  If any Lender requests
compensation under Section 3.04, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01, if any Lender is a
Defaulting Lender or if any other circumstance exists hereunder that gives the
Borrower the right to replace a Lender as a party hereto, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.06), all of its interests, rights
and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:


 


(a)                                  the
Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 10.06(b);


 


(b)                                 such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and L/C Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 3.05) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts);


 


(c)                                  in
the case of any such assignment resulting from a claim for compensation under Section 3.04
or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments
thereafter; and


 


(d)                                 such
assignment does not conflict with applicable Laws.


 


A Lender shall
not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Borrower to require such assignment and delegation cease to apply.


 


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10.14                     Governing Law; Jurisdiction; Etc.


 


(a)                                  GOVERNING
LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED
THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING
UNDER FEDERAL LAW.


 


(b)                                 The
parties hereto agree that Chapter 346 (other than 346.004) of the Texas
Finance Code (which regulates certain revolving credit accounts and revolving
tri-party accounts) shall not apply to Loans under this Agreement.


 


(c)                                  SUBMISSION
TO JURISDICTION.  THE BORROWER AND
EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
TEXAS SITTING IN DALLAS COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
NORTHERN DISTRICT OF TEXAS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH TEXAS STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
IN SUCH FEDERAL COURT.  EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER
LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER
OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR
ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.


 


(d)                                 WAIVER
OF VENUE.  THE BORROWER AND EACH OTHER
LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO
IN PARAGRAPH (B) OF THIS SECTION. 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.


 


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(e)                                  SERVICE
OF PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES
IN SECTION 10.02.  NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.


 


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


 


10.16                     USA PATRIOT Act Notice.  Each Lender that is subject to the
Act (as hereinafter defined) and the Administrative Agent (for itself and not
on behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Act.


 


10.17                     ENTIRE AGREEMENT. 
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES.


 


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


 


	
   

  	
  CARRIAGE SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph Saporito

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Joseph Saporito

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President and CFO

  	
   

  
						



 


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  BANK OF AMERICA, N.A.,
  as

  	
   

  
	
   

  	
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Johanson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  David Johanson

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
						



 


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  BANK OF AMERICA, N.A.,
  as a Lender, L/C

  Issuer and Swing Line Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gary Mingle

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Gary Mingle

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice President

  	
   

  
						



 


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  WELLS FARGO BANK, NATIONAL

  ASSOCIATION, as a Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Warren Ross

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Warren Ross

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
						



 


116