EX-10.1



 





Exhibit 10.1




EXECUTION COPY



 





CREDIT AGREEMENT




Dated as of January 3, 2008




among




POLYONE CORPORATION,




THE
LENDERS PARTY HERETO,
CITICORP USA, INC.,

as Administrative Agent,




CITICORP USA, INC.,

as Issuing Bank,




and




THE BANK OF NEW YORK,

as Paying Agent




 




$40,000,000 REVOLVING AND LETTER OF CREDIT FACILITY




 












 






Table of Contents




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	SECTION 1.01. Defined Terms
	 	 	1	 
	SECTION 1.02. Terms Generally
	 	 	12	 
	SECTION 1.03. Accounting Terms; GAAP
	 	 	13	 
	 
	 	 	 	 
	ARTICLE II THE CREDITS
	 	 	13	 
	SECTION 2.01. Commitments
	 	 	13	 
	SECTION 2.02. Loans and Borrowings
	 	 	14	 
	SECTION 2.03. Requests for Borrowings
	 	 	14	 
	SECTION 2.04. The Letter of Credit
	 	 	15	 
	SECTION 2.05. Funding of Borrowings
	 	 	18	 
	SECTION 2.06. Interest Elections
	 	 	18	 
	SECTION 2.07. Termination of Commitments; Reduction of Commitments
	 	 	20	 
	SECTION 2.08. Repayment of Loans; Evidence of Debt; Obligations Absolute
	 	 	20	 
	SECTION 2.09. Prepayment of Loans
	 	 	21	 
	SECTION 2.10. Fees
	 	 	22	 
	SECTION 2.11. Interest
	 	 	22	 
	SECTION 2.12. Alternate Rate of Interest
	 	 	23	 
	SECTION 2.13. Increased Costs
	 	 	23	 
	SECTION 2.14. Break Funding Payments
	 	 	25	 
	SECTION 2.15. Taxes
	 	 	25	 
	SECTION 2.16. Payments Generally; Pro Rata Treatment
	 	 	27	 
	SECTION 2.17. Mitigation Obligations; Replacement of Lenders
	 	 	28	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	29	 
	SECTION 3.01. Organization; Powers
	 	 	29	 
	SECTION 3.02. Authorization
	 	 	29	 
	SECTION 3.03. Governmental Approvals; No Conflicts
	 	 	30	 
	SECTION 3.04. Binding Obligation; Enforceability
	 	 	30	 
	SECTION 3.05. Financial Condition
	 	 	30	 
	SECTION 3.06. Litigation
	 	 	30	 
	SECTION 3.07. Investment Company Act
	 	 	31	 
	SECTION 3.08. Federal Reserve Regulations
	 	 	31	 
	SECTION 3.09. Disclosure.
	 	 	31	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS
	 	 	31	 
	SECTION 4.01. Conditions to Effective Date
	 	 	31	 
	SECTION 4.02. Condition to Each Credit Event
	 	 	32	 
	 
	 	 	 	 
	ARTICLE V COVENANTS
	 	 	32	 
	SECTION 5.01. Securities Act
	 	 	32	 
	SECTION 5.02. Payment of Obligations under the Loan Documents
	 	 	33	 
	SECTION 5.03. Taxes
	 	 	33	 





i









 





	 	 	 	 	 
	 	 	Page	 
	SECTION 5.04. Corporate Existence
	 	 	33	 
	SECTION 5.05. Limitation on Liens
	 	 	33	 
	 
	 	 	 	 
	ARTICLE VI EVENTS OF DEFAULT
	 	 	35	 
	SECTION 6.01. Events of Default
	 	 	35	 
	SECTION 6.02. Notice of Defaults
	 	 	37	 
	 
	 	 	 	 
	ARTICLE VII THE ADMINISTRATIVE AGENT AND THE PAYING AGENT
	 	 	37	 
	 
	 	 	 	 
	ARTICLE VIII MISCELLANEOUS
	 	 	39	 
	SECTION 8.01. Notices
	 	 	39	 
	SECTION 8.02. Waivers; Amendments
	 	 	41	 
	SECTION 8.03. Expenses; Indemnity; Damage Waiver
	 	 	43	 
	SECTION 8.04. Successors and Assigns
	 	 	44	 
	SECTION 8.05. Survival
	 	 	47	 
	SECTION 8.06. USA Patriot Act
	 	 	47	 
	SECTION 8.07. Counterparts; Integration; Effectiveness
	 	 	47	 
	SECTION 8.08. Severability
	 	 	48	 
	SECTION 8.09. Waiver of Right of Setoff
	 	 	48	 
	SECTION 8.10. Governing Law; Jurisdiction; Consent to Service of Process; Process
Agent; Waiver of Immunity
	 	 	48	 
	SECTION 8.11. WAIVER OF JURY TRIAL
	 	 	49	 
	SECTION 8.12. Headings
	 	 	49	 
	SECTION 8.13. Confidentiality
	 	 	49	 
	SECTION 8.14. Interest Rate Limitation
	 	 	50	 
	 
	 	 	 	 
	SCHEDULES:
	 	 	 	 






	 	 	 
	Schedule 2.01

	 	Commitments
	 
	 	 
	EXHIBITS:
	 	 
	 
	 	 
	Exhibit A

	 	Form of Assignment and Acceptance
	Exhibit B

	 	Form of Notes
	Exhibit C-1

	 	Form of Notice of Borrowing Request
	Exhibit C-2

	 	Form of Notice of LC Request
	Exhibit D

	 	Form of Letter of Credit












 



 



CREDIT AGREEMENT, dated as of January 3, 2008 (this
“Agreement”), among POLYONE CORPORATION, an Ohio corporation
(the “Company”), the LENDERS party hereto (the “Lenders”),
CITICORP USA, INC. (“CUSA”), as Administrative Agent (in
such capacity the “Administrative Agent”), CUSA, as Issuing
Bank (in such capacity, the “Issuing Bank”), and THE BANK OF
NEW YORK, as Paying Agent (the “Paying Agent”).



     The Company has requested the Lenders to extend credit to enable it to borrow on a revolving
credit basis on and after the date hereof and at any time and from time to time during the
Availability Period (such term and each other capitalized term used and not otherwise defined
herein having the meaning assigned to it in Article I) a
principal amount not in excess of $40,000,000 at any time outstanding. The Company has further requested the
Issuing Bank to issue the Letter of Credit to support other payment obligations of the Company.
The proceeds of borrowings hereunder are to be used for general corporate purposes of the Company
and its Subsidiaries and other purposes not inconsistent with this Agreement.



     The Lenders and the Issuing Bank are willing to extend such credit to the Company on the terms
and subject to the conditions herein set forth.



     Accordingly, the parties hereto agree as follows:



ARTICLE I

DEFINITIONS




     SECTION 1.01. Defined Terms.



     As used in this Agreement, the following terms have the meanings specified below:




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




     “Accounts Receivable Subsidiary” means a wholly owned Subsidiary that is formed solely
for the purpose of, and that engages in no activities other than in connection with the
financing of accounts receivable and that is designated by the Board of Directors (as
provided below) as an Accounts Receivable Subsidiary and:




     (a) no portion of the Debt or any other obligations (contingent or otherwise) of which:




     (1) is guaranteed by the Company or any Subsidiary other than pursuant to Standard
Securitization Undertakings;




     (2) is recourse to or obligates the Company or any Subsidiary in any way other than
pursuant to Standard Securitization Undertakings; or



 












 



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     (3) subjects any property of the Company or any Subsidiary, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings;




     (b) with which neither the Company nor any Subsidiary has any material contract,
agreement, arrangement or understanding other than on terms no less favorable to the Company
or such Subsidiary than those that might be obtained at the time from Persons that are not
Affiliates of the Company, other than fees payable in the ordinary course of business in
connection with servicing accounts receivable of such entity; and




     (c) to which neither the Company nor any Subsidiary has any obligation to maintain or
preserve such entity’s financial condition or cause such entity to achieve certain levels of
operating results other than pursuant to Standard Securitization Undertakings.




     Any designation of a Subsidiary as an Accounts Receivable Subsidiary shall be evidenced
to the Administrative Agent by filing with the Administrative Agent a certified copy of the
resolution of the Board of Directors giving effect to the designation and an Officers’
Certificate certifying that the designation complied with the preceding conditions and was
permitted by this Agreement; provided that no such filing shall be required to give effect
to the designation of PolyOne Funding Corporation as an Accounts Receivable Subsidiary.




     “Act” means the Securities Act of 1933, as amended from time to time, and any statute
successor thereto.




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




     “Administrative Agent” has the meaning ascribed to it in the preamble to this
Agreement.




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




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




     “Agents” means the Administrative Agent and the Paying Agent.




     “Agent-Related Persons” means the Administrative Agent, together with its Affiliates,
and the officers, directors, employees, agents and attorneys-in-fact of the Administrative
Agent and such Affiliates.




     “Agreement” has the meaning ascribed to it in the preamble to this agreement.









 



3



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




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




     “Approved Fund” has the meaning specified in Section 8.04.




     “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender
and an assignee (with the consent of any party whose consent is required by Section 8.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any other form
approved by the Administrative Agent.




     “Assignment Date” means the date, if any, on which the Lenders assign their rights and
obligations under this Agreement pursuant to any swap or derivatives transaction relating to
the Company and its obligations.




     “Attributable Value” means, as to any particular lease under which any Person is at the
time liable and at any date as of which the amount thereof is to be determined, the total
net amount of rent required to be paid by such Person under such lease during the initial
term thereof as determined in accordance with GAAP, discounted from such initial term date
to the date of determination at a rate per annum equal to the discount rate which would be
applicable to a Capital Lease Obligation with a like term in accordance with GAAP. The net
amount of rent required to be paid under any such lease for any such period shall be the
lesser of: (1) the aggregate amount of rent payable by the lessee with respect to such
period after excluding amounts required to be paid on account of insurance, taxes,
assessments, utility, operating and labor costs and similar charges and (2) in the case of
any lease which is terminable by the lessee upon the payment of a penalty, the net amount
calculated pursuant to (1) but adjusted to also include the amount of such penalty and to
exclude any rent which would otherwise be required to be paid under such lease subsequent to
the first date upon which it may be so terminated.




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




     “Base Rate” means the rate of interest per annum publicly announced from time to time
by Citibank, as its “base” rate; each change in the Base Rate shall be effective from and
including the date such change is publicly announced as being effective.




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









 



4



     “Board of Directors” means the Board of Directors of the Company.




     “Borrowing” means Loans of the same Type, made, converted or continued on the same date
and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.




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




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




     “Capital Lease Obligations” of any Person means the obligations to pay rent or other
amounts under a lease of (or other Debt arrangements conveying the right to use) real or
personal property of such Person which are required to be classified and accounted for as a
capital lease or a liability on the face of a balance sheet of such Person in accordance
with GAAP, and the amount of such obligations shall be the capitalized amount thereof in
accordance with GAAP and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon which such
lease may be terminated by the lessee without payment of a penalty.




     “Capital Markets Debt” means any Debt that is a security (other than syndicated
commercial loans) that is eligible for resale in the United States pursuant to Rule 144A or
outside the United States pursuant to Regulation S or a security (other than syndicated
commercial loans) that is sold or subject to resale pursuant to a registration statement
under the Act. As of the Effective Date, the Company’s Capital Markets Debt includes its
7.5% Debentures, issued under the indenture dated as of December 1, 1995, among NBD Bank, as
trustee, and The Geon Company, 8 7/8 % Senior Notes, issued under the
indenture dated as of April 23, 2002 among The Bank of New York, as trustee, and the
Company, 10 5/8% Senior Notes, issued under the indenture dated as of
May 6, 2003, among The Bank of New York, as trustee, and the Company and medium term notes,
issued under the indenture dated as of November 9, 1996, among NBD Bank, as trustee, and
M.A. Hanna Company.




     “Change in Law” means (a) the adoption of any law, rule or regulation after the date of
this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.13(b), by any
lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if
any) with any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement.









 



5



     “Citibank” means Citibank, N.A.




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




     “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Loans and acquire participations in the Letter of Credit, as such commitment may be reduced
or increased from time to time pursuant to assignments by or to such Lender pursuant to
Section 8.04. The initial amount of each Lender’s Commitment is set forth on Schedule 2.01,
or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable.




     “Commitment Termination Date” means the earlier to occur of (a) the 3rd
Business Day prior to the date specified in clause (a) of the definition of Maturity Date
and (b) the date of acceleration of the Loans pursuant to Section 6.01.




     “Company” means PolyOne Corporation, an Ohio corporation.




     “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.




     “Credit Event” means each Borrowing and each issuance, renewal, extension or increase
of the Letter of Credit.




     “CUSA” has the meaning set forth in the preamble to this Agreement.




     “Debt” means any obligation created or assumed by any Person for the repayment of money
borrowed and any purchase money obligation created or assumed by such Person.




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




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




     “Effective Date” means the date on which the conditions set forth in Section 4.01 are
satisfied or waived in accordance with Section 8.02.




     “Environmental Action” means any administrative, regulatory or judicial action, suit,
demand, demand letter, claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent agreement arising
under any Environmental Law or environmental permit or relating to Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or









 



6



damages and (b) by any governmental or regulatory authority or any third party for
damages, contribution, indemnification, cost recovery, compensation or injunctive relief.




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




     “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities),
of the Company or any of its Subsidiaries 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.




     “Eurodollar”, when used in reference to any Loan or Borrowing, means that such Loan, or
the Loans comprising such Borrowing, are bearing interest at a rate determined by reference
to the Adjusted LIBO Rate.




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




     “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
and any statute successor thereto.




     “Excluded Taxes” means, with respect to any Agent, any Lender, the Issuing Bank, or any
other recipient of any payment to be made by or on account of any obligation of the Company
hereunder, (a) income, franchise, branch profits or similar taxes imposed on (or measured
by) its net income by the United States of America, or by the jurisdiction under the laws of
which such recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, and (b) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the Company under
Section 2.17(b)), any withholding tax that is imposed on amounts payable to such Foreign
Lender (i) at the time such Foreign Lender becomes a party to this Agreement (or designates
a new lending office), 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 Company with respect to such withholding tax pursuant to
Section 2.15(a) or (ii) that is attributable to such Foreign Lender’s failure to comply with
Section 2.15(e).




     “Facility Fee” has the meaning ascribed to it in Section 2.10.




     “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by









 



7



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




     “Fee Letter” means the fee letter, dated as of the date hereof, between the Company and
CUSA.




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




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




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




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




     “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, in each
case above to the extent regulated pursuant to any Environmental Law.




     “Indemnified Taxes” means Taxes (other than Excluded Taxes) and Other Taxes.




     “Indemnitee” has the meaning ascribed to it in Section 8.03(b).




     “Information” has the meaning ascribed to it in Section 8.13.




     “Interest Election Request” means a request by the Company to convert or continue a
Borrowing in accordance with Section 2.06.




     “Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each
March, June, September and December, and (b) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in
the case of a Eurodollar Borrowing with an Interest Period of more than three months’
duration, each day prior to the last day of such Interest Period that occurs at intervals of
three months’ duration after the first day of such Interest Period.









 



8



     “Interest Period” means with respect to any Eurodollar Borrowing, the period commencing
on the date of such Borrowing or on the last day of the immediately preceding Interest
Period therefor, as applicable, and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as the Company may elect;
provided, that (a) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (b) any Interest Period of one
month or more that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such Interest
Period. For purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.




     “Issuing Bank” has the meaning ascribed to it in the preamble to this Agreement.




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




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




     “Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall
have become a party hereto pursuant to an Assignment and Acceptance, other than any such
Person that ceases to be a party hereto pursuant to an Assignment and Acceptance.




     “Letter of Credit” has the meaning assigned to that term in Section 2.04(a).




     “LIBO Rate” means, with respect to each Interest Period, the rate per annum determined
by the Administrative Agent to be the offered rate for deposits in dollars with a term
comparable to such Interest Period that appears on the Reuters Screen LIBOR01 Page at
approximately 11:00 a.m., London time, two Business Days prior to the beginning of such
Interest Period; provided, however, that if at any time for any reason such offered rate
does not appear on the Reuters Screen LIBOR01 Page, “LIBO Rate” shall mean, with respect to
each day during each Interest Period, the rate per annum (rounded upward to the nearest
1/100 of 1%) at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of Citibank or any of its
Affiliates in immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the beginning of such Interest Period.
In the event the LIBO Rate is determined as set forth in the next preceding sentence, the
LIBO Rate shall be determined by the









 



9



Administrative Agent on the basis of the applicable rates furnished to and received by
the Administrative Agent from Citibank or any of its Affiliates on the second Business Day
prior to the commencement of such Interest Period.




     “Lien” means any mortgage, pledge, security interest, charge, lien or other encumbrance
of any kind, whether or not filed, recorded or perfected under applicable law.




     “Loan Documents” means this Agreement and the Fee Letter.




     “Loans” means the loans made by the Lenders to the Company pursuant to Sections 2.03
and 2.04(e).




     “Margin Stock” has the meaning provided in Regulation U of the Board.




     “Material Adverse Change” means any material adverse change in the business condition
(financial or otherwise), operations, performance, prospects, material obligations or
properties of the Company or the Company and its Subsidiaries taken as a whole.




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




     “Maturity Date” means the earlier to occur of March 20, 2011, and the date of
acceleration of the Loans pursuant to Section 6.01.




     “Note” has the meaning ascribed to it in Section 2.08(e).




     “Notice of Borrowing Request” means a notice substantially in the form of Exhibit C-1
hereto delivered by the Company to the Administrative Agent pursuant to Section 2.03 with
respect to a Borrowing Request.




     “Notice of LC Request” means a notice substantially in the form of Exhibit C-2 hereto
delivered by the Company to the Issuing Bank and the Administrative Agent pursuant to
Section 2.04(b) with respect to the Letter of Credit.




     “Obligations” means all obligations that the Company has from time to time incurred or
may hereafter incur to the Agents, the Lenders and the Issuing Bank (or, in each case, any
of them) under, in connection with or with respect to the Credit Agreement or the other Loan
Documents.




     “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising (but excluding any tax,
charge or levy that constitutes an Excluded Tax) from any payment made hereunder









 



10



or from the execution, delivery or enforcement of, or otherwise with respect to, this
Agreement.




     “Participant” has the meaning ascribed to it in Section 8.04(e).




     “Paying Agent” has the meaning ascribed to it in the preamble to this Agreement.




     “Paying Agent’s Account” means the account of the Paying Agent maintained by the Paying
Agent at its office at 4 New York Plaza, 15th Floor, New York, New York
10004-2413, or such other account of the Paying Agent as is designated in writing from time
to time by the Paying Agent to the Company, the Administrative Agent, the Issuing Bank and
the Lenders for such purpose.




     “Payment Default” means, with respect to any Debt, a failure to pay the principal of
such Debt at its scheduled maturity after giving effect to any applicable grace period
provided in the instrument(s) governing such Debt.




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




     “Receivables Facility” means one or more receivables financing facilities or
arrangements, as amended or modified from time to time, pursuant to which the Company or any
Subsidiary sells (including a sale in exchange for a promissory note or capital stock of an
Accounts Receivable Subsidiary) its accounts receivable to an Accounts Receivable
Subsidiary.




     “Register” has the meaning ascribed to it in Section 8.04(c).




     “Regulation S” means Regulation S promulgated under the Act, as the same is from time
to time in effect, and all official rulings and interpretations thereunder or thereof.




     “Regulation T” means Regulation T of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or thereof.




     “Regulation U” means Regulation U of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or thereof.




     “Regulation X” means Regulation X of the Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder or thereof.




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




     “Required Lenders” means, (a) at any time prior to the termination of the Commitments
pursuant to Article VI, Lenders having Total Exposures and unused Commitments representing
more than 50% of the aggregate Total Exposures and unused









 



11



Commitments at such time, and (b) for all purposes after the termination of the
Commitments pursuant to Article VI, Lenders having outstanding Total Exposures representing
more than 50% of the aggregate Exposures.




     “Reuters Screen LIBOR01 Page” means the Reuters Screen LIBOR01 Page (or such other page
as may replace such page on such service for the purpose of displaying the rates at which
dollar deposits are offered by leading banks in the London interbank deposit market).




     “Sale and Leaseback Transaction” means with respect to any Person an arrangement with
any bank, insurance company or other lender or investor (or pool thereof) or to which such
lender or investor (or pool thereof) is a party, providing for the leasing by such Person or
any of its subsidiaries of any property or asset of such Person or any of its subsidiaries
which has been or is being sold or transferred by such Person or such subsidiary more than
270 days after the acquisition thereof or the completion of construction or commencement of
operation thereof to such lender or investor or to any Person to whom funds have been or are
to be advanced by such lender or investor on the security of such property or asset.




     “SEC” means the United States Securities and Exchange Commission.




     “Standard Securitization Undertakings” means (a) for the purposes of the Receivables
Facility entered into on or before the Effective Date, the representations, warranties,
covenants, undertakings and indemnities contained in the documentation related thereto, and
(b) for all other purposes, representations, warranties, covenants and indemnities entered
into by the Company or any Subsidiary that are reasonably customary in receivables financing
facilities, including, without limitation, servicing of the obligations thereunder.




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




     “subsidiary” means, in respect of any Person, any corporation, company (including any
limited liability company), association, partnership, joint venture or other business entity
of which a majority of the total voting power of the voting stock or other interests
(including partnership interests) is at the time owned or controlled, directly or
indirectly, by:




 











 





     12





     (a) such Person;




     (b) such Person and one or more subsidiaries of such Person; or




     (c) one or more subsidiaries of such Person;




     provided, however, that notwithstanding the foregoing, such entity is not a subsidiary
of such Person if (i) such entity’s financial results are not consolidated with the
financial results of such Person in accordance with GAAP and (ii) any other Person (or such
other Person and one or more of such other Person’s subsidiaries, or one or more of such
other Person’s subsidiaries) has the power to control by contract or otherwise the board of
directors or equivalent governing body of, or otherwise controls, such entity.




     “Subsidiary” means any subsidiary of the Company.




     “SunBelt Guarantee” means the guarantee by the Company of obligations under the
Guaranteed Secured Senior Notes due 2017, Series G of SunBelt Chlor Alkali Partnership
pursuant to a Guarantee dated December 22, 1997 by the Company, as in effect on the date
hereof, terminating on December 22, 2017 or satisfaction of such obligations, whichever is
earlier.




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




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




     “Transactions” means each of the execution, delivery and performance by the Company of
this Agreement, the borrowing of Loans hereunder and the issuance and modification of the
Letter of Credit for the account of the Company hereunder.




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




     “USA Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended, supplemented,
amended and restated or otherwise modified from time to time.



     SECTION 1.02. Terms Generally.



     The definitions of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to
have the same meaning and effect as the word “shall”. Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other document herein shall be









 



13



construed as referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified, (b) any reference herein to any Person shall be
construed to include such Person’s permitted successors and assigns, (c) any reference herein to
any applicable law means such applicable law as amended, modified, codified, replaced, or
reenacted, in whole or in part, and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other provision of any applicable law means
that section or provision of such applicable law from time to time in effect and any amendment,
modification, codification, replacement, or reenactment of such section or other provision, (d) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer
to this Agreement in its entirety and not to any particular provision hereof, (e) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (f) the words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and contract rights.



     SECTION 1.03. Accounting Terms; GAAP.



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



ARTICLE II

THE CREDITS




     SECTION 2.01. Commitments.



     Subject to the terms and conditions set forth herein and without limiting each Lender’s
obligation to make Loans pursuant to Section 2.04(e), each Lender agrees to make Loans to the
Company from time to time during the Availability Period and to participate in the Letter of Credit
in an aggregate principal amount not exceeding the amount of such Lender’s Commitment; provided,
that after giving effect to each Credit Event (a) no Lender’s Total Exposure shall exceed such
Lender’s Commitment, and (b) the sum of the Total Exposures of all the Lenders shall not exceed the
sum of the Commitments of all Lenders. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Company may borrow, prepay and reborrow Loans and request the
issuance, renewal, amendment, extension, decrease and increase of the Letter of Credit.









 



14


     SECTION 2.02. Loans and Borrowings.




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




     (b) Subject to Sections 2.04(e) and 2.12, each Borrowing shall be comprised entirely of ABR
Loans or Eurodollar Loans as the Company may request in accordance herewith and shall be in
dollars. Each Lender at its option may make any Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall
not affect the obligation of the Company to repay such Loan in accordance with the terms of this
Agreement and shall not be inconsistent with the duty of such Lender under Section 2.17(a) to
minimize the amounts payable by the Company under Section 2.13 or 2.15.




     (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not
less than $5,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in
an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000;
provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e). Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time be more than a total of
six outstanding Eurodollar Borrowings.



     SECTION 2.03. Requests for Borrowings.



     To request a Borrowing, except as otherwise provided with respect to Loans to be made pursuant
to Section 2.04(e), the Company shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than noon, New York City time, three Business
Days before the date of the proposed Borrowing, (b) in the case of any ABR Borrowing, not later
than 11:00 a.m., New York City time, on the Business Day of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery
or telecopy to the Administrative Agent at its office set forth in Section 8.01 of a Notice of
Borrowing Request signed by the Company. Each such telephonic Borrowing Request shall specify the
following information in compliance with Section 2.02:




     (i) the aggregate amount of the requested Borrowing;




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




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









 



15



     (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the term
“Interest Period”; and




     (v) the location and number of the Company’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.


If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Company shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.




     SECTION 2.04. The Letter of Credit.




     (a) General. Subject to the terms and conditions set forth herein, the Issuing Bank agrees
to issue and amend (including, without limitation, to increase or decrease the stated amount of
or extension of the expiry of the Letter of Credit) at the request and for the account of the
Company, a standby letter of credit substantially in the form of Exhibit D or in such other form
as may be reasonably acceptable to the Issuing Bank and the Company (the “Letter of Credit”), at
any time and from time to time during the Availability Period. The Issuing Bank shall not be
under any obligation to issue the Letter of Credit if any order, judgment or decree of any
Governmental Authority or arbitrator binding upon the Issuing Bank shall by its terms purport to
enjoin or restrain the Issuing Bank from issuing the Letter of Credit, or any law, rule,
regulation or orders of any Governmental Authority applicable to the Issuing Bank or any request
or directive (whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain
from, the issuance of letters of credit generally or the Letter of Credit in particular or shall
impose upon the Issuing Bank with respect to the Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in
effect on the date hereof, or shall impose upon the Issuing Bank any unreimbursed loss, cost or
expense that was not applicable on the date hereof and that the Issuing Bank in good faith deems
material to it.




     (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request the
issuance of the Letter of Credit (or the amendment, renewal or extension of the Letter of
Credit), the Company shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (at or before 2:00 p.m., New York time on the Business Day of the requested
date of issuance, amendment, renewal or extension) a Notice of LC Request requesting the
issuance of the Letter of Credit and specifying the requested date of issuance of the Letter of
Credit (which shall be a Business Day) and, as applicable, specifying the date of amendment,
renewal or extension (which shall be a Business Day), the date on which the Letter of Credit is
to expire (which shall comply with subsection (c) of this Section), the amount of the Letter of
Credit, the name and address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend the









 



16



Letter of Credit. The Letter of Credit shall be issued, amended, renewed or extended only
if (and upon issuance, amendment, renewal or extension of the Letter of Credit the Company shall
be deemed to represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the aggregate LC Exposure shall not exceed the aggregate Commitments,
and (ii) the Total Exposures shall not exceed the total Commitments. The Issuing Bank shall
promptly (and in any event within one Business Day) notify the Administrative Agent of each
issuance, amendment, renewal, extension or expiry of the Letter of Credit, and shall provide to
the Administrative Agent such other information as the Administrative Agent shall reasonably
request as to the Letter of Credit.




     (c) Expiration Date. The Letter of Credit shall expire at or prior to the date that is
three (3) Business Days prior to the date specified in clause (a) of the definition of Maturity
Date.




     (d) Participations. By the issuance of the Letter of Credit (or an amendment to the Letter
of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender
hereby acquires from the Issuing Bank, a participation in the Letter of Credit equal to such
Lender’s Applicable Percentage of the aggregate amount available to be drawn under the Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Company on the date due as provided in subsection (e) of this Section, or of
any reimbursement payment required to be refunded to the Company for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant to this
subsection in respect of the Letter of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or extension of the
Letter of Credit or the occurrence and continuance of a Default or reduction or termination of
the Commitments, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.




     (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement, the Issuing Bank
shall promptly notify the Company by telephone, telecopy or other telecommunication of the date
and amount of such LC Disbursement. The Company shall reimburse such LC Disbursement on demand;
provided that unless the Company shall have notified the Administrative Agent otherwise, the
Company’s obligations shall be financed with an ABR Borrowing made under this subsection (e) in
an equivalent amount and, to the extent so financed, the Company’s obligation to reimburse such
LC Disbursement shall be discharged and replaced by the resulting ABR Borrowing, which ABR
Borrowing shall not be subject to the conditions precedent in Sections 4.01 and 4.02. If the
Company fails to make such payment when due, the Administrative Agent shall notify each Lender
of the applicable LC Disbursement, the payment then due from the Company in respect thereof and
such Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each
Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due
from the Company, and the Administrative Agent shall promptly pay to the Issuing Bank the
amounts so received by it from the Lenders. Each Lender agrees to fund its Applicable
Percentage of such payment due from the Company on (i) the Business Day on









 



17



which demand therefore is made by the Issuing Bank, provided that notice of such demand is
given not later than 11:00 a.m. (New York time) on such Business Day, or (ii) the first Business
Day next succeeding such demand if notice of such demand is given after such time. If and to
the extent that any Lender shall not have made such amount available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the Issuing Bank until
the date such amount is paid to the Administrative Agent, at the Federal Funds Rate for its
account or the account of the Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of the Issuing Bank on any Business Day, such
amount so paid in respect of principal shall constitute an ABR Loan made by such Lender on such
Business Day for purposes of this Agreement.




     (f) Certain Liabilities Relating to the Letter of Credit. None of the Administrative
Agent, the Lenders or the Issuing Bank, nor any of their Related Parties, shall have any
liability or responsibility by reason of or in connection with the issuance or transfer of the
Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any
of the circumstances referred to in Section 2.08(f)), or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication under or
relating to the Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from causes beyond the
control of the Issuing Bank; provided that, without limiting Section 2.08(f), the foregoing
shall not be construed to excuse the Issuing Bank from liability to the Company to the extent of
any direct damages (as opposed to consequential damages, claims in respect of which are hereby
waived by the Company to the extent permitted by applicable law) suffered by the Company that
are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and
other documents presented under the Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that, in the absence of gross negligence or willful misconduct on the
part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance
of the foregoing and without limiting the generality thereof, the parties agree that, with
respect to documents presented that appear on their face to be in substantial compliance with
the terms of the Letter of Credit, the Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary (other than a valid injunction issued by
a court of competent jurisdiction), or refuse to accept and make payment upon such documents if
such documents are not in strict compliance with the terms of the Letter of Credit.




     (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under the Letter of
Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Company by
telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has
made or will make an LC Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Company of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such LC Disbursement.









 



18



     (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then, unless the
Company shall reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the Company reimburses such LC Disbursement
(whether through a Borrowing pursuant to Section 2.04(e) or otherwise), at the rate per annum
then applicable to ABR Loans. Interest accrued pursuant to this subsection shall be for the
account of the Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to subsection (e) of this Section to reimburse the Issuing Bank shall be for
the account of such Lender to the extent of such payment.



     SECTION 2.05. Funding of Borrowings.




     (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders; except as
provided otherwise with respect to ABR Loans made pursuant to Section 2.04(e), such transfers
shall be made by (x) 12:00 Noon, New York City time in the case of Borrowings other than ABR
Borrowings and (y) 2:00 p.m., New York City time in the case of ABR Borrowings on the date such
Loan is made. The Administrative Agent will make such amounts available to the Company by
promptly crediting the amounts so received, in like funds, to an account of the Company
designated by the Company in the applicable Borrowing Request; provided that ABR Loans made to
refinance the reimbursement of an LC Disbursement as provided in Section 2.04(e) shall be
remitted by the Administrative Agent to the Issuing Bank.




     (b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed time of any Borrowing that such Lender will not make available to the Administrative
Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with subsection (a) of this
Section and may, in reliance upon such assumption, make available to the Company 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 Company severally
agree to pay to the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made available to the
Company to but excluding the date of payment to the Administrative Agent, at (i) in the case of
such Lender, the Federal Funds Effective Rate or (ii) in the case of the Company, the interest
rate applicable to such Loan. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing.



     SECTION 2.06. Interest Elections.




     (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Company may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of









 



19



a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this
Section. The Company may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.




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




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




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




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




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




     (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”.


If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an
Interest Period, then the Company shall be deemed to have selected an Interest Period of one
month’s duration.





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




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









 



20



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



     SECTION 2.07. Termination of Commitments; Reduction of Commitments.




     (a) The Commitments shall terminate on the Maturity Date.




     (b) The Company may at any time terminate, or from time to time reduce, the aggregate
amount of the Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000, (ii) the Company
shall not terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.09 and any concurrent reduction in the
stated amount of the Letter of Credit pursuant to Section 2.04(b), the sum of the Total
Exposures of all the Lenders would exceed the total Commitments and (iii) the Company shall
satisfy all its obligations in respect under Sections 2.14 and 8.03(d) in respect of such
termination or reduction and any concurrent repayment.




     (c) The Company shall notify the Administrative Agent of any election to terminate or
reduce the Commitments under subsection (b) of this Section at least three Business Days prior
to the effective date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each reduction of the Commitments shall be
made ratably among the Lenders based on their respective Commitments.



     SECTION 2.08. Repayment of Loans; Evidence of Debt; Obligations Absolute.




     (a) The Company hereby unconditionally promises to pay to the Paying Agent for application
in accordance with Section 2.16 the outstanding principal amount of each Loan on the Maturity
Date.




     (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Company to such Lender resulting from each Loan made by such
Lender to the Company, including the amounts of principal and interest payable and paid to such
Lender by the Company from time to time hereunder.




     (c) The Administrative Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due and payable from
the Company to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.




     (d) The entries made in the accounts maintained pursuant to subsection (b) or (c) of this
Section shall, absent manifest error, be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of any Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner









 



21



affect the obligation of the Company to repay the Loans in accordance with the terms of
this Agreement.




     (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In
such event, the Company shall prepare, execute and deliver to such Lender a nonnegotiable
promissory note substantially in the form attached as Exhibit B (a “Note”) payable to the order
of such Lender (or, if requested by such Lender, to such Lender and its permitted registered
assigns). Thereafter, the Loans evidenced by such Note and interest thereon shall at all times
(including after assignment pursuant to Section 8.04) be represented by one or more Notes
payable to the order of the payee named therein (or, if such Note is a registered Note, to such
payee and its permitted registered assigns).




     (f) The Company’s obligation to repay the Loans, to reimburse LC Disbursements and to make
the other payments provided herein shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of the
Letter of Credit or this Agreement, or any term or provision therein, (ii) the existence of any
claim, set-off, defense or other right that the Company, or any Affiliate of the Company may
have at any time against the beneficiary or any transferee of the Letter of Credit (or any
Persons or entities for whom such beneficiary or transferee may be acting), the Issuing Bank or
any other Person, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction; (iii) without limiting Section 2.04(f), any draft, demand
certificate or any other document presented under the Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any
respect, (iv) payment by the Issuing Bank under the Letter of Credit against presentation of a
draft or other document that does not comply with the terms of the Letter of Credit, (v) the
surrender or impairment of any security for the performance or observance of any of the terms of
any of the Loan Documents; (vi) any non-application or misapplication by the beneficiary the
Letter of Credit of the proceeds of any drawing under the Letter of Credit; (vii) the fact that
a Default shall have occurred and be continuing; or (viii) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions
of this Section, constitute a legal or equitable discharge of, or provide a right of setoff
against, the Company’s obligations hereunder; provided, that none of the foregoing shall be
deemed a waiver by the Company of any claim or cause of action that the Company may have against
any Lender, the Administrative Agent or the Issuing Bank under this Agreement or applicable law,
except to the extent limited by this Agreement.



     SECTION 2.09. Prepayment of Loans.




     (a) The Company shall have the right at any time and from time to time to prepay any
Borrowing made by it in whole or in part, subject to prior notice in accordance with
subsection (b) of this Section.




     (b) The Company shall notify the Administrative Agent by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than noon, New York City time, two Business Days before the date of









 



22



prepayment and (ii) in the case of prepayment of an ABR Borrowing, not later than noon,
New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or portion thereof to be
prepaid. Promptly following receipt of any such notice relating to a Borrowing, the
Administrative Agent shall advise the Lenders and the Paying Agent of the contents thereof.
Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the
case of an advance of a Borrowing of the same Type as provided in Section 2.02. Each prepayment
of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.
Prepayments shall be accompanied by accrued interest to the extent required by Section 2.11.



     SECTION 2.10. Fees.




          The Company agrees to pay to the Paying Agent for application in accordance with Section
2.16 a facility fee (the “Facility Fee”), payable in such amounts and at the times specified in
the Fee Letter. The Facility Fee shall be paid on the dates due in immediately available funds.
Absent manifest error, once paid, the Facility Fee shall not be refundable under any
circumstances.



     SECTION 2.11. Interest.




     (a) The Loans comprising each ABR Borrowing shall bear interest at a rate per annum equal
to the Alternate Base Rate.




     (b) The Loans comprising each Eurodollar Borrowing shall bear interest at a rate per annum
equal to the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing.




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




     (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan; provided that (i) interest accrued pursuant to subsection (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than a prepayment of an ABR Loan prior to the Maturity Date), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or prepayment, (iii) in
the event of any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective date of such
conversion and (iv) all accrued interest shall be payable upon termination of the Commitments.




     (e) All computations of interest for Alternate Base Loans when the Alternate Base Rate is
based on the Base 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 computations of the Facility Fee under Section 2.10(a) shall
be made on the basis of a 360-day year and actual days elapsed. All other









 



23



computations of fees and interest shall be made on the basis of a 360-day year and actual
days 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 such
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which such
Loan or such portion is paid. The applicable Alternate Base Rate or Adjusted LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be conclusive absent
manifest error.



     SECTION 2.12. Alternate Rate of Interest.



     If prior to the commencement of any Interest Period for a Eurodollar Borrowing:




     (a) the Administrative Agent determines in good faith (which determination shall be
conclusive absent manifest error) that, by reason of circumstances generally affecting the
London interbank Eurodollar market, adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate for such Interest Period; or




     (b) the Administrative Agent is advised by the Required Lenders that because of a change in
circumstances affecting the eurodollar market generally the Adjusted LIBO Rate for such Interest
Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining
their Loans included in such Borrowing for such Interest Period;


then the Administrative Agent shall give notice thereof to the Company and the Lenders by telephone
or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the
Company and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.




     SECTION 2.13. Increased Costs. Subject to Section 2.17,




     (a) If any Change in Law shall:




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




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


and the result of any of the foregoing shall be to increase the cost to such Lender or the Issuing
Bank in an amount that such Lender or the Issuing Bank reasonably deems to be material of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost of such Lender or the Issuing Bank in an amount that such Lender or the Issuing
Bank reasonably deems to be material of participating in, issuing or maintaining








 



24


the Letter of Credit or reduce the amount of any sum received or receivable by such Lender or the
Issuing bank hereunder (whether of principal, interest or otherwise), then the Company will pay to
the Paying Agent for distribution to the Administrative Agent, other than any increase in costs
resulting from (A) Excluded Taxes or (B) Indemnified Taxes or Other Taxes to which Section 2.15 is
applicable, which the Company will pay to such Lender or the Issuing Bank, as the case may be, for
the account of such Lender or the Issuing Bank in accordance with Section 2.15, such additional
amount or amounts necessary to compensate such Lender or the Issuing Bank for such additional costs
incurred or reduction suffered.





     (b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company,
if any, as a consequence of this Agreement or the Loans made or the Letter of Credit to a level
below that which such Lender or the Issuing Bank or such Lender’s the Issuing Bank’s holding
company could have achieved but for such Change in Law by an amount reasonably deemed to be
material by such Lender or the Issuing Bank or the Issuing Bank’s holding company, then from
time to time the Company will pay to the Paying Agent for distribution to the Administrative
Agent for the account of such Lender or the Issuing Bank in accordance with Section 2.16 such
additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s
or the Issuing Bank’s holding company for any such reduction suffered.




     (c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may
be, as specified in subsection (a) or (b) of this Section, and explaining in reasonable detail
the method by which such amount or amounts shall have been determined, shall be delivered to the
Company and shall be conclusive absent manifest error; provided that no Lender nor the Issuing
Bank shall be required to deliver information pursuant to this Section relating to its business,
other than any such information that is available to the Company on a nonconfidential basis
prior to the date of such certificate. The Company shall pay to the Paying Agent the amount
shown as due on any such certificate within 30 days after receipt thereof.




     (d) Failure or delay on the part of any Lender or Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or Issuing Bank’s right
to demand such compensation; provided that the Company shall not be required to compensate a
Lender or Issuing Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be,
notifies the Company of the Change in Law giving rise to such increased costs or reductions and
of such Lender’s or the Issuing Bank’s intention to claim compensation therefor in accordance
with this Section; provided further, that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 180-day period referred to above shall be extended
to include the period of retroactive effect thereof.









 



25


     SECTION 2.14. Break Funding Payments.



     In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on
the date specified in any notice delivered pursuant hereto, or (d)  the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of
a request by the Company pursuant to Section 2.17, then, in any such event, the Company shall
compensate each Lender for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the amount so prepaid or converted, or not so borrowed, continued, converted or prepaid,
at the Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan, for the period
from the date of such event to the last day of the then current Interest Period therefor (or, in
the case of a failure to borrow, convert or continue, for the Interest Period that would have
commenced on the date of such failure for such Loan), over (ii) the amount of interest that would
have accrued to such Lender on such principal amount for such period at the interest rate which
such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the interbank eurodollar market. A certificate of
any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Company and shall be conclusive absent manifest error. Each
affected Lender requesting payment under this Section shall submit written demand specifying in
reasonable detail the events and circumstances resulting in such payment obligation, together with
a certificate as to any amounts payable pursuant to this Section, to the Company. The Company shall
pay such Lender the amount shown as due on any such certificate within 30 days after receipt
thereof.



     SECTION 2.15. Taxes.




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




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




     (c) The Company shall indemnify the Administrative Agent, the Paying Agent, each Lender and
the Issuing Bank, within 30 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other









 



26



Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by
the Administrative Agent, the Paying Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or an account of any obligation of the Company hereunder
and any penalties, interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Company by a Lender or the Issuing Bank, or by the Administrative
Agent or the Paying Agent, on its own behalf or on behalf of a Lender or the Issuing Bank, shall
be conclusive absent manifest error. Notwithstanding the foregoing, the Company shall have no
obligation to indemnify the Administrative Agent, the Paying Agent, any Lender or the Issuing
Bank for any interest, penalties or expenses described above arising from the gross negligence
or willful misconduct of the Administrative Agent, the Paying Agent, such Lender or the Issuing
Bank, as the case may be, in taking any action it was required by applicable law to take
including, but not limited to, filing any tax return or report in a timely manner.




     (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Company to a Governmental Authority, the Company shall deliver to the Administrative Agent (with
a copy to the Paying 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) Any Foreign Lender that is entitled to an exemption from or reduction of withholding
tax under the law of the jurisdiction in which the Company is located for tax residence
purposes, or any treaty to which such jurisdiction is a party, with respect to payments under
this Agreement shall, upon request of the Company, deliver to the Company (with a copy to the
Administrative Agent and the Paying Agent), at the time or times prescribed by applicable law or
reasonably requested by the Company, 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.




     (f) If the Administrative Agent, Paying Agent, the Issuing Bank or any Lender determines
that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by
the Company or with respect to which the Company has paid additional amounts pursuant to this
Section 2.15, it shall pay over such refund to the Company (but only to the extent of indemnity
payments made, or additional amounts paid, by the Company under this Section 2.15 with respect
to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of
the Administrative Agent, Paying Agent, The Issuing Bank or such Lender and without interest
(other than any interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Company, upon the request of the Administrative Agent, the Paying
Agent, the Issuing Bank or such Lender, agrees to repay the amount paid over to the Company
(plus any penalties, interest or other charges imposed by the relevant Governmental Authority)
to the Administrative Agent, the Paying Agent, the Issuing Bank or such Lender in the event the
Administrative Agent, the Paying Agent, the Issuing Bank or such Lender is required to repay
such refund to such Governmental Authority. This Section shall not be construed to require the
Administrative









 



27



Agent, the Paying Agent, the Issuing Bank or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to the Company or
any other Person.



     SECTION 2.16. Payments Generally; Pro Rata Treatment.




     (a) The Company shall make each payment required to be made by it hereunder (whether of
principal, interest, fees, reimbursement of LC Disbursements or of any amounts under
Section 2.13, 2.14 or 2.15, or otherwise) prior to 12:00 Noon, New York City time, on the date
when due in immediately available funds, without set-off or counterclaim. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent, be deemed to
have been received on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Paying Agent to be credited to the Paying
Agent’s Account. All payments made by the Company to the Paying Agent as provided herein or in
any Note shall be deemed received by the Lenders or the Issuing Bank for all purposes as between
the Lenders or the Issuing Bank and the Company. The Administrative Agent shall notify the
Paying Agent in advance of each such expected payment. The Paying Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal, interest or Facility
Fees to the Administrative Agent or, with respect to payments to be made to the Issuing Bank,
the Issuing Bank, and the Administrative Agent or the Issuing Bank (as the case may be) will
promptly after any such payment cause to be distributed like funds relating to the payment of
principal or interest or Facility Fees (other than amounts payable pursuant to Section 2.04(f),
2.13, 2.14, 2.15 or 8.03(a), (b) or (c)) (according to the Lenders’ respective Commitments) to
the Lenders for the account of their respective lending offices, and like funds relating to the
payment of any other amount payable to any Lender to the Administrative Agent, and the
Administrative Agent then shall cause like funds to be distributed to such Lender for the
account of its applicable lending office, in each case to be applied in accordance with the
terms of this Agreement or any Note. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment hereunder shall be due on a day that is not
a Business Day, the date for payment shall be extended to the next succeeding Business Day, and,
in the case of any payment accruing interest, interest thereon shall be payable for the period
of such extension. All payments hereunder shall be made in dollars.




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




     (c) If any Lender shall obtain payment in respect of any principal of or interest on any of
its Loans or participations in unreimbursed LC Disbursements resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Loans or









 



28



participations in unreimbursed LC Disbursements and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Loans or participations in unreimbursed
LC Disbursements of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans or participations in unreimbursed LC
Disbursements; provided that (i) if any such participations are purchased and all or any portion
of the payment giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and (ii) the
provisions of this subsection shall not be construed to apply to any payment made by the Company
pursuant to and in accordance with the express terms of this Agreement or any payment obtained
by a Lender as consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Company or any Subsidiary or Affiliate
thereof (as to which the provisions of this subsection shall apply).




     (d) Unless the Paying Agent shall have received notice from the Company prior to the date
on which any payment is due to the Paying Agent for the account of the Lenders or the Issuing
Bank that the Company will not make such payment, the Paying Agent may assume that the Company
has made such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Administrative Agent, whereupon the Administrative Agent shall
distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such
event, if the Company has not in fact made such payment, then each of the Lenders or the Issuing
Bank, as the case may be, severally agrees to repay to the Paying Agent forthwith on demand the
amount so distributed to such Lender or the Issuing Bank with interest thereon, for each day
from and including the date such amount is distributed to it to but excluding the date of
payment to the Paying Agent, at the Federal Funds Effective Rate.




     (e) If any Lender or the Issuing Bank shall fail to make any payment required to be made by
it pursuant to Section 2.04(d), 2.05(b) or 2.16(d), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender or the Issuing Bank to
satisfy such Lender’s or the Issuing Bank’s obligations under such Sections until all such
unsatisfied obligations are fully paid.



     SECTION 2.17. Mitigation Obligations; Replacement of Lenders.




     (a) If any Lender requests compensation under Section 2.13, or if the Company is required
to pay any additional amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of
such Lender, such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender. The Company hereby agrees to pay all









 



29



reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.




     (b) If any Lender requests compensation under Section 2.13, or if the Company is required
to pay any additional amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.15, or if any Lender defaults in its obligation to fund Loans
hereunder, or if in connection with any proposed amendment, modification, waiver or consent, the
consent of the Required Lenders has been obtained but the consent of a Lender the consent of
which is required shall not have been obtained, then the Company may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign
and delegate, without recourse (in accordance with and subject to the restrictions contained in
Section 8.04), all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Lender, if a Lender accepts
such assignment); provided that (i) the Company shall have received the prior written consent of
the Administrative Agent (and if a Commitment is being assigned, the Issuing Bank), which
consent shall not unreasonably be withheld or delayed, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and accrued interest
and fees) or the Company (in the case of all other amounts) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 2.13 or payments required to be
made pursuant to Section 2.15, such assignment will result in a reduction in such compensation
or payments. A Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling
the Company to require such assignment and delegation cease to apply.



ARTICLE III

REPRESENTATIONS AND WARRANTIES




     The Company represents and warrants as of the date hereof to each of the Lenders and the
Issuing Bank as follows:



     SECTION 3.01. Organization; Powers.



     The Company is a corporation duly incorporated, validly existing and in good standing under
the laws of the State of Ohio, and is duly qualified to do business, and is in good standing, in
every jurisdiction where the nature of its business requires it to be so qualified, except to the
extent that any failure to be so qualified or in good standing as a foreign entity could not
reasonably be expected to have a Material Adverse Effect.



     SECTION 3.02. Authorization.



     The execution, delivery and performance by the Company of this Agreement and the other Loan
Documents, and the consummation of the transactions contemplated hereby are within the Company’s
corporate powers, have been duly authorized by all necessary corporate action, do not (i)
contravene the Company’s charter or code of regulations, (ii) violate any









 



30



applicable law, rule, regulation, order, writ, judgment, injunction, decree, determination or
award, or (iii) breach or result in a default under, or result in the acceleration of (or entitle
any party to accelerate) the maturity of any obligation of the Company under, or result in or
require the creation of any lien upon or security interest in any property of the Company pursuant
to the terms of, any agreement or instrument (other than any Loan Document) binding on or affecting
the Company or any of its properties.



     SECTION 3.03. Governmental Approvals; No Conflicts.



     No authorization or approval or other action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery and performance by the Company
of the Agreement or any other Loan Documents.



     SECTION 3.04. Binding Obligation; Enforceability.



     This Agreement has been, and each of the other Loan Documents when delivered hereunder will
have been, duly executed and delivered by the Company. This Agreement is, and each of the other
Loan Documents when delivered hereunder will be, the legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and to general equitable principles.



     SECTION 3.05. Financial Condition.




     (a) The consolidated balance sheet of the Company and its consolidated Subsidiaries as of
December 31, 2006, and the related consolidated statements of income and cash flows of the
Company and its consolidated Subsidiaries for the fiscal year then ended, accompanied by an
opinion of Ernst & Young, LLP, independent public accountants, copies of which have been
furnished to each Lender, fairly present the consolidated financial condition of the Company and
its consolidated Subsidiaries as at such date and the consolidated results of the operations of
the Company and its consolidated Subsidiaries for the period ended on such date, all in
accordance with GAAP consistently applied.




     (b) Since December 31, 2006, there has been no Material Adverse Change and there have been
no events or developments that, in the aggregate, have had a Material Adverse Effect.



     SECTION 3.06. Litigation.


To the best of the Company’s knowledge, there is no pending or threatened action, suit,
investigation, litigation or proceeding, including, without limitation, any Environmental Action,
affecting the Company or any of its Subsidiaries before any court, governmental agency, or
arbitrator that (i) could be reasonably likely to have a Material Adverse Effect or (ii) purports
to affect the legality, validity or enforceability of this Agreement or any other Loan Document or
the consummation of the transactions contemplated hereby.










 



31




     SECTION 3.07. Investment Company Act.



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



     SECTION 3.08. Federal Reserve Regulations.



     The Borrowings under this Agreement and the application of the proceeds thereof as provided
herein will not violate Regulation T, U or X of the Board.



     SECTION 3.09. Disclosure.



     Each of the annual and quarterly reports required to be filed by the Company under Section
13(a) of the Exchange Act since December 31, 2006 has been filed and, as of the respective dates
thereof and as of the date hereof, such reports (as each such report may have been supplemented or
revised by any subsequent report filed by the Company) did not contain and do not contain an untrue
statement of a material fact and did not omit and do not omit to state a material fact necessary in
order to make the statements therein, taken as a whole, in light of the circumstances under which
they were made, not misleading.



ARTICLE IV

CONDITIONS




     SECTION 4.01. Conditions to Effective Date.



     The obligations of the Lenders to make Loans to the Company and of the Issuing Bank to issue
the Letter of Credit for the account of the Company shall not become effective until the date on
which each of the following conditions are satisfied (or waived in accordance with Section 8.02):




     (a) The Administrative Agent shall have received at least one executed counterpart of this
Agreement from the Company, each Agent, the Issuing Bank and each Lender, and arrangements
satisfactory to the Administrative Agent shall have been made for the delivery of additional
executed counterparts, sufficient in number for distribution to the Agents, the Issuing Bank,
the Lenders and the Company, together with all Exhibits thereto;




     (b) The Administrative Agent shall have received a favorable written opinion (addressed to
the Administrative Agent, the Issuing Bank and the Lenders and dated the Effective Date) of
Thompson Hine LLP, counsel to the Company, in a form reasonably satisfactory to the
Administrative Agent;




     (c) The Administrative Agent shall have received documents and certificates relating to the
organization, existence and good standing of the Company, the authorization of the Transactions,
the incumbency of the persons executing this Agreement on behalf of the Company, all in form and
substance satisfactory to the Administrative Agent;









 



32



     (d) The Administrative Agent shall have received a certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer of the Company, confirming
as of the Effective Date, that (i) the representations and warranties of the Company set forth
in Article III of this Agreement are true and correct in all material respects on and as of such
date, except to the extent any such representation or warranty expressly refers to another date
and (ii) no Default has occurred and is continuing; and




     (e) The Administrative Agent and each Lender (and its Affiliates) shall have received all
fees and other amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be
reimbursed or paid by the Company hereunder.



     SECTION 4.02. Condition to Each Credit Event.



     The obligation of each Lender to make a Loan to the Company on the occasion of any Borrowing
(other than a Borrowing made to reimburse the Issuing Bank for any LC Disbursement as provided in
Sections 2.04(d) and (e)), and the obligation of the Issuing Bank to issue, renew, extend or
increase the amount of the Letter of Credit, is subject to the satisfaction of the condition that,
at the time of and immediately after giving effect to such Credit Event, no Event of Default shall
have occurred and be continuing.



     Each Credit Event shall be deemed to constitute a representation and warranty by the Company on the
date thereof as to the satisfaction of the condition described in this Section.



ARTICLE V

COVENANTS





     (a) Until the Commitments have expired or been terminated, the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full, and the Letter of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed, the
Company covenants and agrees with the Lenders that:



     SECTION 5.01. Securities Act.



     The Company shall furnish to each Lender:




     (a) within 15 days after the Company is required to file the same with the SEC, copies of
the annual reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may from time to time by rules and regulations
prescribe) that the Company may be required to file with the SEC pursuant to Section 13 or
Section 15(d) of the Exchange Act;




     (b) on or before March 31, a certificate of a Financial Officer, stating whether to the
best knowledge of the signer thereof a Default has occurred or if the Company has failed in the
performance and observance of any of the terms, provisions and conditions of this Agreement
(without regard to any period of grace or requirement of notice provided hereunder) and, if any
such Default or failure shall have occurred, specifying all such









 



33



Defaults or failures and the nature and status thereof of which the signer may have
knowledge; and




     (c) within 30 days of the date the Company knew or reasonably should have known of the
occurrence of any Event of Default, written notice thereof to the Administrative Agent.



     SECTION 5.02. Payment of Obligations under the Loan Documents.



     The Company shall pay or cause to be paid the principal of, premium, if any, and interest on
the Loans on the dates and in the manner provided in this Agreement and the Loan Documents.



     SECTION 5.03. Taxes.



     The Company shall pay or discharge or cause to be paid or discharged, and shall cause each of
its Subsidiaries (other than any Accounts Receivable Subsidiary) to pay or discharge or cause to be
paid or discharged, prior to delinquency, all material taxes, assessments, and governmental levies;
provided that neither the Company nor any such Subsidiary shall be required to pay or discharge, or
cause to be paid or discharged, any such tax, assessment, charge or claim the amount, applicability
or validity of which is being contested in good faith by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to the Lenders.



     SECTION 5.04. Corporate Existence.



     The Company shall do or cause to be done all things necessary to preserve and keep in full
force and effect (i) its corporate existence, and the corporate, partnership or other existence of
each of its Subsidiaries (other than any Accounts Receivable Subsidiary), in accordance with the
respective organizational documents (as the same may be amended from time to time) of the Company
or any such Subsidiary (other than any Accounts Receivable Subsidiary) and (ii) the rights (charter
and statutory), licenses and franchises of the Company and its Subsidiaries (other than any
Accounts Receivable Subsidiary); provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or other existence of
the Company or any of its Subsidiaries (other than any Accounts Receivable Subsidiary), if the
Board of Directors shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries (other than any Accounts Receivable
Subsidiary), taken as a whole, and that the loss thereof is not adverse in any material respect to
the Lenders.



     SECTION 5.05. Limitation on Liens.



     The Company will not, and will not permit any of its Subsidiaries (other than any Accounts
Receivable Subsidiary) to, incur or suffer to exist any Lien (other than any Permitted Lien) on
property now owned or hereafter acquired to secure Debt without making, or causing such Subsidiary
(other than any Accounts Receivable Subsidiary) to make, effective provision for securing the
Obligations (and, if the Company so determines, any other Debt of the Company which is not
subordinate to the Obligations or of such Subsidiary (other than any Accounts












 





34



Receivable Subsidiary)) equally and ratably with such Debt as to such property so long as such
Debt is so secured.




               “Permitted Liens” means:




     (a) Liens in respect of Debt existing on the date hereof;




     (b) Liens on property existing at the time of acquisition thereof;




     (c) Liens on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary (other than any Accounts Receivable Subsidiary);




     (d) Liens on property of the Company or any Subsidiary (other than any Accounts Receivable
Subsidiary) in favor of the United States of America, any state thereof or any instrumentality
of either to secure certain payments pursuant to any contract or statute;




     (e) Liens to secure Debt incurred for the purpose of financing all or any part of the
purchase price or the cost of construction or improvement of the property subject to such Liens,
and securing only the property so purchased, constructed or improved and proceeds thereof;




     (f) Liens for taxes or assessments or other governmental charges or levies, Liens imposed
by law, such as mechanics’ and materialmen’s Liens, for sums not due or sums being contested in
good faith and with respect to which adequate reserves are being maintained, to the extent
required by GAAP, and Liens securing reimbursement obligations with respect to trade letters of
credit, bankers’ acceptances and sight drafts Incurred in the ordinary course of business which
encumber documents and other property relating to such trade letters of credit, bankers’
acceptances and sight drafts;




     (g) Liens to secure obligations under workers’ compensation laws or similar legislation,
including Liens with respect to judgments which are not currently dischargeable;




     (h) Liens created by or resulting from any litigation or other proceedings which are being
contested in good faith by appropriate proceedings, including Liens arising out of judgments or
awards against the Company or any Subsidiary (other than any Accounts Receivable Subsidiary)
with respect to which the Company or such Subsidiary (other than any Accounts Receivable
Subsidiary) is in good faith prosecuting an appeal or proceedings for review or for which the
time to make an appeal has not yet expired; or final unappealable judgment Liens which are
satisfied within 30 days of the date of judgment; or Liens incurred by the Company or any
Subsidiary (other than any Accounts Receivable Subsidiary) for the purpose of obtaining a stay
or discharge in the course of any litigation or other proceeding to which the Company or such
Subsidiary (other than any Accounts Receivable Subsidiary) is a party;




     (i) Liens not otherwise permitted by clauses (a) through (h) securing Debt or other
obligations permitted under this Agreement at any time outstanding not to exceed $10.0 million;
and









 



35



     (j) Liens to secure any extension, renewal or refinancing (or successive extensions,
renewals or refinancings), in whole or in part, of any Debt secured by Liens referred to in the
foregoing clauses (a) to (j) so long as such Liens do not extend to any other property and the
Debt so secured is not increased.



               In addition to the foregoing, the Company or any Subsidiary (other than any Accounts
Receivable Subsidiary) may incur a Lien to secure Debt or enter into a Sale and Leaseback
Transaction, without equally and ratably securing the Obligations, if after giving pro forma effect
to the incurrence of such Debt (and the receipt and application of proceeds thereof) or the
securing of outstanding Debt the sum (without duplication) of (a) the amount of Debt of the Company
and its Subsidiaries subject to a Lien (other than Permitted Liens), and (b) the Attributable Value
of the Sale and Leaseback Transactions entered into does not exceed 10% of Consolidated Net
Tangible Assets of the Company at the time of such determination.



               In addition, if on and after the Effective Date any Capital Markets Debt of the Company or any
Subsidiary or the SunBelt Guarantee becomes secured by a Lien, then the Company will cause the
Obligations to be secured equally and ratably by a Lien on the same property as such Lien for so
long as such Capital Markets Debt or the SunBelt Guarantee remains secured.



ARTICLE VI

EVENTS OF DEFAULT




     SECTION 6.01. Events of Default.



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




     (a) the Company shall fail to pay any principal of any Loan or any reimbursement obligation
in respect of any LC Disbursement (that is not otherwise reimbursed by an ABR Borrowing pursuant
to Section 2.04(e)) when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;




     (b) default in the payment of any interest on any Loan, the Facility Fee, or any other
amount (other than principal of any Loan or any LC Disbursement) payable hereunder when due and
such default continues until the earlier of 30 days after the date such payment was due and the
Maturity Date;




     (c) any representation or warranty made by or on behalf of the Company in or in connection
with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any
report, certificate, financial statement or other document furnished pursuant to or in
connection with any Loan Document or any amendment or modification hereof or waiver thereunder,
shall prove to have been incorrect in any material respect when made;




     (d) the occurrence of a default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any Debt by the









 



36



Company or any of its Subsidiaries (or any Debt guaranteed by the Company or any of its
Subsidiaries if the Company or a Subsidiary does not perform its payment obligations under such
guarantee within any grace period provided for in the documentation governing such guarantee),
whether such Debt or guarantee exists on the date hereof or is thereafter created, which default
(i) constitutes a Payment Default or (ii) results in acceleration of such Debt prior to its
scheduled maturity, and in each case, the principal amount of any other such Debt under which
there has been a Payment Default or that has been so accelerated, aggregates $25,000,000 or more
without such Debt or guarantee having been discharged or such acceleration having been rescinded
or annulled, as applicable, within a period of ten days of the date of such Payment Default or
acceleration, as applicable;




     (e) default in the performance, or breach, of any term, covenant or warranty of the Company
under any Loan Document (other than a term, covenant or warranty a default in whose performance
or whose breach is specifically dealt with in paragraph (a), (b) or (e) above), and such default
or breach continues for a period of 60 days after there has been given to the Company by the
Administrative Agent or to the Company and the Administrative Agent by the Required Lenders a
written notice specifying such default or breach and requiring it to be remedied and stating
that such notice is a “Notice of Default” hereunder; or




     (f) a Bankruptcy Event occurs. A “Bankruptcy Event” means (i) the Company pursuant to or
within the meaning of any Bankruptcy Law (A) commences a voluntary case, (B) consents to the
entry of any order for relief against it in an involuntary case, (C) consents to the appointment
of a custodian of it or for all or substantially all of its property or (D) makes a general
assignment for the benefit of its creditors or (ii) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that (A) is for relief against the Company in an
involuntary case, (B) appoints a custodian of the Company or for all or substantially all of its
property or (C) orders the liquidation of the Company and, in each case, such order or decree
remains unstayed and in effect for 90 days. “Bankruptcy Law” means Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors. “Bankruptcy Proceeding” means a
proceeding with respect to the Company described in the definition of “Bankruptcy Event”;


then, and in every such event (other than an event with respect to the Company described in clause
(f) this Section 6.01), and at any time thereafter during the continuance of such event, the Paying
Agent (in the case of an Event of Default described in clause (a) or (b) above) shall promptly
provide notice of such Event of Default to the Administrative Agent, and the Administrative Agent,
upon receipt of such notice from the Paying Agent, and in the case of any other Event of Default,
shall, at the request of the Required Lenders, by notice to the Company, take either or both of the
following actions, at the same or different times: (i) terminate the obligation of the Lenders to
make Loans (other than pursuant to Section 2.04(e)) and of the Issuing Bank to issue or amend the
Letter of Credit, and thereupon such obligations shall terminate immediately, and (ii) declare the
Loans then outstanding to be due and payable, and thereupon the principal of the Loans, together
with accrued interest thereon and all fees and other obligations of the Company hereunder, shall
become due and payable immediately, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company; and in case of any event with respect to the
Company described in clause (g) of this








 



37


Article, the obligation of the Lenders to make Loans (other than pursuant to Section 2.04(e)) and
of the Issuing Bank to issue or amend the Letter of Credit shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Company hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are hereby waived by the
Company; provided, that, at any time after a declaration of acceleration described in
clause (ii) above has occurred and before a judgment for payment of the money due has been obtained
by the Administrative Agent, the Issuing Bank or any Lender, the Required Lenders, by written
notice to the Company and the Administrative Agent, may rescind and annul such declaration and its
consequences if such rescission and annulment would not conflict with any judgment or decree of a
court of competent jurisdiction, all existing Events of Default (other than the nonpayment of
principal of and interest on any Loan that has become due solely by reason of the declaration of
acceleration described in clause (a) above) have been cured or waived, and no such rescission or
annulment shall affect any subsequent Default or impair any right consequent thereon.




     SECTION 6.02. Notice of Defaults.



     The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of
a Default unless the Administrative Agent has received notice from the Paying Agent (of a failure
to make a payment of principal of or interest on the Loans), a Lender or the Company specifying
such Default and stating that such notice is a “Notice of Default”. In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the Administrative
Agent shall give prompt notice thereof to the Paying Agent, the Lenders and the Issuing Bank. The
Administrative Agent shall (subject to Article VII) take such action with respect to such Default
as shall be directed by the Required Lenders, provided that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such Default as it shall
deem advisable in the best interest of the Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all of the Lenders.



ARTICLE VII

THE ADMINISTRATIVE AGENT AND THE PAYING AGENT




     Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent
and the Paying Agent as its agent and authorizes the Administrative Agent and the Paying Agent to
take such actions on its behalf and to exercise such powers as are delegated to the Administrative
Agent or the Paying Agent, as applicable, by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.



     Any bank serving as the Administrative Agent or the Paying Agent hereunder shall have the same
rights and powers in its capacity as a Lender or the Issuing Bank as any other Lender and may
exercise the same as though it were not the Administrative Agent or the Paying Agent, as
applicable, and such bank and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any of its Subsidiaries thereof or









 



38

other Affiliate thereof as if it were not the Administrative Agent or the Paying Agent, as
applicable, hereunder.




     Neither Agent shall have any duties or obligations except those expressly set forth for such
Agent herein. Without limiting the generality of the foregoing, (a) neither Agent shall be subject
to any fiduciary or other implied duties, regardless of whether a Default has occurred and is
continuing, (b) neither Agent shall have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated hereby that
such Agent is required to exercise in writing as directed by the Required Lenders, and (c) except
as expressly set forth herein, neither Agent shall have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Company or any of its
Subsidiaries that is communicated to or obtained by the bank serving as such Agent or any of its
Affiliates in any capacity. Neither Agent shall be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section 8.02) to the
extent required by Section 8.02 or in the absence of its own gross negligence or willful
misconduct. Neither Agent shall 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, (ii)
the contents of any certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than, in the case of the
Administrative Agent, to confirm receipt of items expressly required to be delivered to the
Administrative Agent.



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



     The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more subagents appointed by the Administrative Agent. The Administrative
Agent and any such subagent may perform any and all its duties and exercise its rights and powers
through its Related Parties. The exculpatory provisions of the preceding subsections shall apply
to any such subagent and to the Related Parties of the Administrative Agent and any such subagent,
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.



     Subject to the appointment and acceptance of an appropriate successor Agent as provided in
this subsection, each Agent may resign at any time by notifying the Lenders, the Issuing Bank and
the Company. Upon any such resignation, the Required Lenders shall have the right, with









 



39

the consent of the Company (not to be unreasonably withheld or delayed), to appoint a
successor, which must be a bank or trust company with an office in New York, New York, or an
Affiliate of any such bank. 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 Agent gives
notice of its resignation, then the retiring Agent may, on behalf of the Lenders and in
consultation with the Company, appoint a successor Agent, which shall be a bank with an office in
New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as an
Agent hereunder by a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the Company to a
successor Agent shall be the same as those, if any, payable to its predecessor unless otherwise
agreed between the Company and such successor. After any Agent’s resignation hereunder, the
provisions of this Article and Section 8.03 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was acting as such Agent.




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



ARTICLE VIII

MISCELLANEOUS




     SECTION 8.01. Notices.




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




     (i) if to the Company, to 33587 Walker Road, Avon Lake, Ohio 44012, Telecopy: (440)
930-1839, Attention: Treasurer;




     (ii) if to the Administrative Agent, to Two Penns Way, Suite 110, New Castle, Delaware
19720, Telecopy: (212) 994-0847, Attention:                                         ;




     (iii) if to the Paying Agent, to 4 New York Plaza, New York, NY 10004-2413, Attention:
[                    ], Telecopy: (212) 815-5570, with a copy to [                    ], Telecopy:
[                    ];




     (iv) if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire (a copy of which the Administrative Agent shall provide to the
Company, unless such notice or communication was delivered by the Company); and









 



40



     (v) if to the Issuing Bank, to Two Penns Way, Suite 110, New Castle, Delaware 19720,
Telecopy: [                    ], Attention: [                    ].


Any party hereto may change its address or telecopy number for notices and other communications
hereunder by notice to the other parties hereto. All notices and other communications given to any
party hereto in accordance with the provisions of this Agreement shall be deemed to have been given
on the date of receipt.





(b) Electronic Mail and Use of Platform.




     (i) The Company hereby agrees that it will provide to the Administrative Agent all
information, documents and other materials that it is obligated to furnish to the
Administrative Agent pursuant to this Agreement, including, without limitation, all notices,
requests, financial statements, financial and other reports, certificates and other
information materials, but excluding any such communication that (x) relates to the payment
of any LC Disbursement or any Loan or other amount due under this Agreement prior to the
scheduled date therefor, (y) provides notice of any Default or Event of Default under this
Agreement or (z) is required to be delivered to satisfy any condition precedent to the
occurrence of the Effective Date and/or any issuance of the Letter of Credit (all such
non-excluded communications being referred to herein collectively as “Communications”), by
transmitting the Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to oploanswebadmin@citigroup.com. In addition, Company agrees to
continue to provide the Communications to the Administrative Agent in the manner otherwise
specified in this Agreement but only to the extent requested by the Administrative Agent.




     (ii) The Company further agrees that, after the Assignment Date, the Administrative
Agent may make the Communications available to the Lenders by posting the Communications on
Intralinks or a substantially similar electronic transmission system (the “Platform”). THE
PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW) DO
NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE
PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO
WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN
CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE
AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS, ADVISORS OR REPRESENTATIVES (COLLECTIVELY, THE “AGENT PARTIES”) HAVE ANY LIABILITY
TO COMPANY, ANY LENDER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING,
WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES
OR EXPENSES (WHETHER IN TORT,









 



41



CONTRACT OR OTHERWISE) ARISING OUT OF COMPANY’S OR THE ADMINISTRATIVE AGENT’S
TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF
ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.




     (iii) The Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its e-mail address set forth above shall constitute effective
delivery of the Communications to the Administrative Agent for purposes of this Agreement.
Each Lender agrees that notice to it (as provided in the next sentence) specifying that the
Communications have been posted to the Platform shall constitute effective delivery of the
Communications to such Lender for purposes of this Agreement. Each Lender agrees (x) to
provide to the Administrative Agent in writing (including by electronic communication),
promptly after the date of this Agreement, an e-mail address to which the foregoing notice
may be sent by electronic transmission and (y) that the foregoing notice may be sent to such
e-mail address.




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



          (c) Reliance by Administrative Agent and Lenders. The Administrative Agent, the
Lenders and the Issuing Bank shall be entitled to rely and act upon any notices purportedly
given by or on behalf of the Company 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 Company shall indemnify each Agent-Related Person, the Issuing Bank
and each Lender 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 Company except to the extent
such losses, costs, expenses or liabilities resulted primarily from the gross negligence or
willful misconduct of such Agent-Related Person, the Issuing Bank or such Lender, as applicable.
All telephonic notices to and other communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby consents to such
recording.




     SECTION 8.02. Waivers; Amendments.



          (a) No failure or delay by any Agent, the Issuing Bank or any Lender in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Agents, the Issuing Bank and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any departure by the
Company therefrom shall in any event be effective unless the same shall be









 



42


permitted by this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of
whether any Agent, the Issuing Bank or any Lender may have had notice or knowledge of such
Default at the time.




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



          (c) In addition to any amendment otherwise authorized by this Agreement, the Company and
the Administrative Agent from time to time and at any time may enter into an amendment hereto,
without the consent of the Lenders or the Issuing Bank, for one or more of the following
purposes:




     (i) to cure any ambiguity, defect, or inconsistency in this Agreement or the Notes, or
to make such other provisions in regard to matters or questions arising under this Agreement
or under any amendment as the Company’s Board of Directors may deem necessary or desirable,
and which shall not in either case adversely affect the interests of the Lenders or the
Issuing Bank in any material respect;




     (ii) to evidence the succession of another Person to the Company, or successive
successions, and the assumption by the successor Person of the covenants, agreements and
obligations of the Company, as the case may be;




     (iii) to add to the covenants of the Company or to surrender any right or power herein
conferred upon the Company;









 



43



     (iv) to add any additional Events of Default; or




     (v) to secure the Loans or to provide that any of the Company’s obligations under this
Agreement shall be additionally guaranteed and the terms and conditions for the release or
substitution of such security or guarantee.


Upon the request of the Company, accompanied by resolutions of the Company’s Board of Directors
authorizing the execution of any such amendment, the Administrative Agent is hereby authorized join
with the Company in the execution of any such amendment, and to make any further appropriate
agreements and stipulations that may be therein contained, but the Administrative Agent shall not
be obligated to enter into any such amendment that affects the Administrative Agent’s own rights,
duties or immunities under this Agreement or otherwise. Any amendment authorized by the provisions
of this Section 8.02(c) may be executed by the Company and the Administrative Agent without the
consent of any of the Lenders or the Issuing Bank, notwithstanding any of the provisions of Section
8.02(b).




     SECTION 8.03. Expenses; Indemnity; Damage Waiver.



          (a) The Company agrees to 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 preparation and
administration of this Agreement or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and
(ii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing
Bank or any Lender, including the reasonable fees, charges and disbursements of any counsel for
the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights under this
Section, or in connection with the Loans made hereunder and the Letter of Credit, including in
connection with any workout, restructuring or negotiations in respect thereof.



          (b) The Company agrees to indemnify each Agent, the Issuing Bank and each Lender, 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 reasonable fees, charges and disbursements of
any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the Letter of Credit or the use of the
proceeds thereof (including any refusal by the Issuing Bank to honor a demand for payment under
the Letter of Credit if the documents presented in connection with such demand do not strictly
comply with the terms of the Letter of Credit), (iii) any actual or alleged presence or release
of Hazardous Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company 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









 



44



contract, tort or any other theory and regardless of whether any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the
extent that such losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have resulted from or to
have been attributable to the gross negligence or willful misconduct of such Indemnitee or its
Affiliates or from a breach of this Agreement by such Indemnitee.



          (c) To the extent that the Company fails to pay any amount required to be paid by it to the
Administrative Agent or the Issuing Bank under subsection (a) or (b) of this Section, each
Lender severally agrees to pay to the Administrative Agent or the Issuing Bank, 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 the Issuing Bank in
its capacity as such.



          (d) To the extent permitted by applicable law, the Company shall not, and each Indemnitee,
by its acceptance of any right to or benefit of indemnification under this Agreement and as a
condition to its rights to and benefits of indemnification provided for herein, agrees that it
shall not, assert, and hereby waives, any claim against any Indemnitee or the Company,
respectively, 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, any Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated thereby, any Loan or the Letter of Credit or the use of the proceeds
thereof.



          (e) All amounts due under this Section shall be payable not later than 30 days after the
delivery of written demand to the Company therefor.



     SECTION 8.04. Successors and Assigns.



          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby, except that (i) the
Company may not assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or transfer by the
Company without such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer rights or obligations hereunder except in accordance with this Section. 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 and, to the extent
expressly contemplated hereby, Participants and the Related Parties of the Agents, the Issuing
Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this
Agreement.



          (b) 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 Section 8.04(b), participations in LC
Disbursements) at the time owing to it); provided that (i) except in the case of (A) an









 



45



assignment of the entire remaining amount of the assigning Lender’s Commitment and the
Loans at the time owing to it, (B) an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund or a Participant or any owner of a beneficial interest in any of the foregoing
Persons (and further assignments by such Persons or subsequent assignees) or (C) any assignment
on or after the Assignment Date, the aggregate amount of the Commitment (which for this purpose
includes Loans outstanding thereunder) subject to each such assignment, determined as of the
date the Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and Acceptance, as of
the Trade Date, shall not be less than $5,000,000 unless each of the Administrative Agent and,
so long as no Event of Default has occurred and is continuing, the Company otherwise consents
(each such consent not to be unreasonably withheld or delayed); (ii) each partial assignment
shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under the Loan Documents with respect to the Loans or the Commitment assigned; (iii)
any assignment of a Commitment prior to the Assignment Date must be approved by the
Administrative Agent and the L/C Issuer 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); (iv) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with, in the case of each such assignment made
prior to the Assignment Date, a processing and recordation fee of $3,500 (which requirements the
Administrative Agent may waive in whole or in part in its sole discretion on a case by case
basis); and (v) any Lender may, without the approval of the Company and the Administrative
Agent, assign all or a portion of its rights to any of its Affiliates.



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



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



          (e) Any Lender may, without the consent of any of the Company, the Administrative Agent or
the Issuing Bank, sell participations to one or more banks or other entities (each a









 



46


“Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the 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 Company, the Administrative Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. 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, modification or
waiver described in the first proviso to Section 8.02(b) that affects such Participant. Subject
to subsection (f) of this Section, the Company agrees that each Participant shall be entitled to
the benefits of Sections 2.13, 2.14 and 2.15 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 8.09 as
though it were a Lender, provided such Participant agrees to be subject to Section 2.15(f) as
though it were a Lender.



          (f) A Participant shall not be entitled to receive any greater payment under Section 2.13
or 2.15 than the applicable Lender would have been entitled to receive with respect to the
participations sold to such Participant, unless the sale of the participations to such
Participant is made with the Company’s prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.15 unless
the Company is notified of the participations sold to such Participant and such Participant
agrees, for the benefit of the Company, to comply with Section 2.15(f) as though it were a
Lender.



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



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




     “Eligible Assignee” means (i) a Lender; (ii) an Affiliate of a Lender (including
Citibank), (iii) any counterparty to a swap or derivatives transaction relating to the
Company and its obligations, or (iv) any other Person, with the consent of the
Administrative Agent and, unless (A) an Event of Default has occurred and is continuing at
the time any assignment is effected in accordance with this Section 8.04 or (B) the
Assignment Date has occurred, the Company, which consent shall not be unreasonably withheld
or delayed; provided that neither the Company nor an Affiliate of the Company shall qualify
as an Eligible Assignee.









 



47



     “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.




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



     SECTION 8.05. Survival.



     All covenants, agreements, representations and warranties made by the Company herein and in
the certificates or other instruments delivered in connection with or pursuant to this Agreement
shall be considered to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding that any Agent or
any Lender may have had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force and effect as long
as the principal of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.13, 2.14, 2.15 and 8.03 shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitments or the termination of this
Agreement or any provision hereof.



     SECTION 8.06. USA Patriot Act.



     Each Lender hereby notifies the Company that pursuant to the requirements of the USA Patriot
Act, it is required to obtain, verify and record information that identifies the Company, which
information includes the name and address of the Company and other information that will allow such
Lender to identify the Company in accordance with its requirements.



     SECTION 8.07. Counterparts; Integration; Effectiveness.



     This Agreement may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement, the Fee Letter and any other separate letter
agreements with respect to fees payable to the Administrative Agent 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
which, when taken together, bear the signatures of each of the other parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement
by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.









 



48


     SECTION 8.08. Severability.



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



     SECTION 8.09. Waiver of Right of Setoff.



     Each Lender and each Agent hereby waives any right or setoff or recoupment it may have against
the Company under any contract, agreement or other instrument or applicable law.



     SECTION 8.10. Governing Law; Jurisdiction; Consent to Service of Process; Process Agent;
Waiver of Immunity.




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




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




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




     (d) The Company and each other party to this Agreement irrevocably consent to service of
process in the manner provided for notices to it in Section 8.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any other manner
permitted by law.









 



49


     SECTION 8.11. WAIVER OF JURY TRIAL.



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



     SECTION 8.12. Headings.



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



     SECTION 8.13. Confidentiality.



     Each of the Administrative Agent, the Paying Agent and the Lenders and the Issuing Bank agrees
to maintain the confidentiality of the Information (as defined below), except that Information may
be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisers (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) on a “need to know” basis solely in connection with the
Transactions, (b) to the extent requested by any regulatory authority (including any
self-regulatory authority, such as the National Association of Insurance Commissioners), provided,
however, that, to the extent legally permitted, the Company is promptly notified in order that it
may seek a protective order or take other appropriate action, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights hereunder, (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, (ii) any actual or prospective counterparty (or its advisors)
to any securitization, swap or derivatives transaction relating to the Company and its obligations,
(g) with the consent of the Company or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Paying Agent, any Lender or the Issuing Bank on a nonconfidential basis
from a source other than the Company. For the purposes of this Section, “Information” means all
information received from the Company in connection with this Agreement relating to the Company or
its business, other than any such information that is available to the Administrative Agent, any
Lender or the Issuing Bank on a









 



50

nonconfidential basis prior to disclosure by the Company; provided that, in the case of
information received from the Company after the date hereof, such information is clearly identified
as confidential at the time of delivery. 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.




     SECTION 8.14. Interest Rate Limitation.



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



[Remainder of page intentionally left blank]










 



 


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



	 	 	 	 	 
	 	POLYONE CORPORATION

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	CITICORP USA, INC.,

individually, as Administrative Agent, as

Issuing Bank and as Lender

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 	 	 
	 	THE BANK OF NEW YORK,

as Paying Agent

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



PolyOne — Credit Agreement
















 





EXHIBIT A

to Credit Agreement




FORM OF

ASSIGNMENT AND ACCEPTANCE




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



     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the Credit Agreement (including any letters of credit included in such facility) and
(ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of
action and any other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in
any way based on or related to any of the foregoing, including contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the
“Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Acceptance, without representation or warranty by the
Assignor.



	 	 	 	 	 	 	 
	1.

	 	Assignor:	 	 	 	 
	 

	 	 	 	 

	 	 
	2.

	 	Assignee:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	[an Affiliate of [Lender]]	 	 
	 
	 	 	 	 	 	 
	3.

	 	Company:
	 	POLYONE CORPORATION	 	 
	 
	 	 	 	 	 	 
	4.

	 	Administrative Agent:
	 	CITICORP USA, INC., as the
Administrative Agent under the
Credit Agreement	 	 






A-1









 






	 	 	 	 	 	 	 
	5.

	 	Credit Agreement:
	 	Credit Agreement, dated as of
January [                    ], 2008, among POLYONE
CORPORATION, the Lenders party
thereto, CITICORP USA, INC., as
Administrative Agent, and the
other agents and the issuing bank
parties thereto
	 
	 	 	 	 	 	 
	6.

	 	Assigned Interest:	 	 	 	 






	 	 	 	 	 
	 	 	Amount of	 	 
	Aggregate Amount of	 	Commitment/Loans/	 	Percentage Assigned
	Commitment/Loans/LC	 	LC Exposure	 	of Commitment/
	Exposure for all Lenders	 	Assigned	 	Loans/LC Exposure1
	$
	 	$
	 	%





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






 




			
	1	 	Set forth, to at least 9 decimals, as a percentage of
the Commitment/Loans/LC Exposure of all Lenders thereunder.




A-2









 









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




	 	 	 	 	 
	 	ASSIGNOR





[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	ASSIGNEE



[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 


Consented to and accepted:




CITICORP USA, INC.,

as Administrative Agent




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	CITICORP USA, INC.,	 	 
	as Issuing Bank	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






A-3









 






[Consented to:]2




POLYONE CORPORATION




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Name:
	 	 
	 

	 	Title:	 	 








 




			
	2	 	The Company’s consent will not be required if an Event
of Default has occurred and is continuing or the assignment is to an Affiliate
of the Assignor or to a counterparty to a swap or derivatives transaction
relating to the Company and its obligations.




A-4









 










ANNEX I




POLYONE CORPORATION

CREDIT AGREEMENT




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE




     1. Representations and Warranties.



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



     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and
Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement and the other Loan Documents as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement and the other Loan Documents, together with copies of the most recent financial
statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and
information as it has deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Lender organized under the laws of a jurisdiction outside the
United States, attached to this Assignment and Acceptance is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the
Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the Credit Agreement
and the other Loan Documents are required to be performed by it as a Lender.



     2. Payments. From and after the Effective Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of principal, interest, fees and
other amounts) to the Assignor for amounts which have accrued to but excluding the



A-5









 




Effective Date and to the Assignee for amounts which have accrued from and after the Effective
Date.




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




A-6












 





EXHIBIT B

to Credit Agreement




FORM OF NOTE




			
	$                     
	 	                                         ,                    





     FOR VALUE RECEIVED, the undersigned, POLYONE CORPORATION, an Ohio corporation (the “Company”),
unconditionally promises to pay to the order of                     (the “Lender”) the
principal sum of
                    DOLLARS
($                    ) or, if less, the aggregate unpaid
principal amount of all Loans made by the Lender pursuant to the Credit Agreement, dated as of
January [___], 2008 (as amended, supplemented, amended and restated or otherwise modified from time
to time, the “Credit Agreement”), among the Company, the financial institutions (including the
Lender) from time to time parties thereto, Citicorp USA, Inc., as the Administrative Agent, and
each of the other agents and the issuing bank party thereto, on such dates and in such amounts as
are set forth in the Credit Agreement. The amounts payable under the Credit Agreement may be
reduced only in accordance with the terms of the Credit Agreement. Unless otherwise defined,
capitalized terms used herein have the meanings provided in the Credit Agreement.



     The Company also promises to pay interest on the unpaid principal amount hereof from time to
time outstanding from and including the date hereof until maturity (whether by acceleration or
otherwise) and, after maturity, until paid, at the rates per annum and on the dates specified in
the Credit Agreement.



     Payments of both principal and interest are to be made without setoff or counterclaim in
lawful money of the United States of America in same day or immediately available funds to the
account designated by the Paying Agent.



     This Note is one of the Notes referred to in, and evidences the Loans made by the Lender
under, the Credit Agreement, to which reference is made for a statement of the terms and conditions
on which the Company is permitted and required to make prepayments and repayments of principal of
the indebtedness evidenced by this Note and on which such indebtedness may be declared to be or
shall automatically become immediately due and payable.



     THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.



	 	 	 	 	 	 	 
	 	 	POLYONE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 






B-1









 






LOAN AND PRINCIPAL PAYMENTS




	 	 	 	 	 	 	 	 	 
	 

	 	Amount
	 	Amount of
	 	Unpaid
	 	Notations
	Date

	 	of Loan
	 	Principal Repaid
	 	Principal Balance
	 	Made By
	 

	 	 
	 	 
	 	 
	 	 





B-2









 






EXHIBIT C-1

to Credit Agreement




[Letterhead of Company]




FORM OF

NOTICE OF BORROWING REQUEST




Date:                                         ,                    




Citicorp USA, Inc., as Administrative Agent

   party to the Credit Agreement referred to

   below

Two Penns Way, Suite 110

New Castle, Delaware 19720




Re:   POLYONE CORPORATION — NOTICE OF BORROWING REQUEST




Ladies and Gentlemen:




     This Notice of Borrowing Request is delivered to Citicorp USA, Inc., as the administrative
agent (the “Administrative Agent”), pursuant to Section 2.03 of the Credit Agreement, dated as of
January [___], 2008 (as amended, supplemented, amended and restated or otherwise modified from time
to time, the “Credit Agreement”), among POLYONE CORPORATION, an Ohio corporation (the “Company”),
the financial institutions from time to time parties thereto as lenders (the “Lenders”), and
Citicorp USA, Inc., as the Administrative Agent, and the Issuing Bank named therein. Unless
otherwise defined herein, capitalized terms used herein have the meanings provided in the Credit
Agreement. We hereby request a Borrowing as follows:




	 	(i)	 	the aggregate amount of the requested Borrowing is $                    ;
	 
	 	(ii)	 	the date of such Borrowing1 is                     ;





	 	(iii)

such Borrowing is to be [an ABR Borrowing][a Eurodollar Borrowing, and the
initial Interest Period to be applicable thereto is [one][two][three][six] months]; and







	 	(iv)	 	the location and number of the Company’s account to which funds are to be
disbursed is                     . 2











 




			
	1	 	Must be a Business Day.
	 
	2	 	Must comply with the requirements of Section 2.05.




C-1









 










     The Company has caused this Notice of Borrowing Request to be executed and delivered by a
Financial Officer of the Company this ___day of                     ,                     .



	 	 	 	 	 	 	 
	 	 	POLYONE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 







C-2












 





EXHIBIT C-2

to Credit Agreement




[Letterhead of Company]




FORM OF

NOTICE OF LC REQUEST




Date:
                                ,                     




	 	 	 
	Citicorp USA, Inc., as Administrative Agent

and the LC Issuer party
to the Credit

Agreement referred to below

	 	 
	Two Penns Way, Suite 110
	 	 
	New Castle, Delaware 19720
	 	 






Re:     POLYONE CORPORATION — NOTICE OF LC REQUEST




Ladies and Gentlemen:




     This Notice of LC Request is delivered to Citicorp USA, Inc., as the issuing bank (the
“Issuing Bank”), pursuant to Section 2.04(b) of the Credit Agreement, dated as of January [                    ],
2008 (as amended, supplemented, amended and restated or otherwise modified from time to time, the
“Credit Agreement”), among POLYONE CORPORATION, an Ohio corporation (the “Company”), the financial
institutions from time to time parties thereto as lenders (the “Lenders”), the Issuing Bank, and
Citicorp USA, Inc., as the Administrative Agent. Unless otherwise defined herein, capitalized
terms used herein have the meanings provided in the Credit Agreement.



     1. [We request that the Letter of Credit (the “Letter of Credit”) be issued as provided
herein. The amount of the Letter of Credit is $                    . After giving effect to the issuance
of the Letter of Credit, the Total Exposures of all Lenders will not exceed the aggregate
Commitments.] [We request that the [identify Letter of Credit] (the “Letter of Credit”) be
[amended] [renewed] [extended] as provided herein. After giving effect to the [amendment]
[renewal] [extension] of the Letter of Credit, the Total Exposures of all Lenders will not exceed
the aggregate Commitments.]



     2. The proposed date of the requested [issuance] [amendment] [renewal] [extension] of the
Letter of Credit is                     ,                      (which is a Business Day).



C-3









 





     3. The
expiration date of the Letter of Credit is                                          ,                     .3



     4. [Company to add any other description necessary to prepare, amend, renew or extend the
Letter of Credit (including amount of Letter of Credit, beneficiary thereof, drawing conditions,
etc.).]



     The undersigned Financial Officer of the Company certifies that each of the conditions
precedent to the proposed issuance set forth in Section 4.02 of the Credit Agreement has been
satisfied.



     The Company has caused this Notice of LC Request to be executed and delivered by a Financial
Officer of the Company this                      day of                     ,                     .



	 	 	 	 	 
	 	POLYONE CORPORATION

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





 




			
	3	 	Insert date that is at or prior to the                      Business Day
prior to the date specified in clause (a) of the definition of Maturity Date.




C-4









 










EXHIBIT D

to Credit Agreement




FORM OF STANDBY LETTER OF CREDIT




Date:                     , 20                    




Beneficiary:




Citibank, N.A.

c/o Citicorp North America, Inc.

3800 Citibank Center

Building B 3rd Floor

Tampa, FL 33610




Letter of Credit No. [•]




Ladies and Gentlemen:





     By order of POLYONE CORPORATION (the “Company”), we hereby open our irrevocable Standby Letter
of Credit No.                      (this “Credit”), in your favor for an amount of USD                      and No
Cents (                     U.S. Dollars and 00/100), which may adjust from time to time as provided in the
next paragraph, effective immediately and expiring at our office located at 399 Park Avenue, New
York, NY 10022-4614 (the “Office”) on                     ,                     .



     This Credit has been issued in your favor as security in support of the letters of credit
already issued by you or to be issued by you on or after the date hereof in the amounts notified to
us by you or to be issued by you from time to time hereafter for the account of the Company
pursuant to the Agreement for Letter of Credit, dated as of January [                    ], 2008, between the Company
and you (the “Reimbursement Agreement”) and any other written agreement between the Company and you
regarding the issuance of letters of credit for the account of the Company that specifies that such
letters of credit are to be considered Citibank LCs, as hereinafter defined (such letters of credit
being hereinafter referred to collectively as the “Citibank LCs”). The amount outstanding under
this Credit may adjust from time to time, without amendment, to account for (i) drawings hereunder
that we have honored (in the amount of such drawing), (ii) cancellation, increase, reduction or
expiration of Citibank LCs, upon receipt by us of your notice describing such cancellation,
increase, reduction or expiration (in the amount of the available amount of the Citibank LCs that
have been cancelled or expired or in the amount of such reduction, as applicable), and (iii)
issuance by you from time to time after the date hereof of any Citibank LC (in the amount of the
available amount of such Citibank LC), subject in the case of any increase described in clause (ii)
or any issuance described in clause (iii), to confirmation by us prior to such increase or issuance
of the available amount hereunder. In no event shall the amount available hereunder exceed
$[                    ].



     Funds hereunder are available to you against your sending to us by courier or facsimile either
of the following written certifications:



D-2









 






“We hereby demand payment in the amount of USD                      because,
in connection with our Irrevocable Standby Letter of Credit No.
                     (the “Credit”), the beneficiary has drawn a draft
under the Credit (the “Draft”), and we have not been reimbursed for
the amount of such Draft.”




“We hereby demand payment in the amount of USD                     (which amount
does not exceed the aggregate outstanding undrawn amounts under the
letters of credit issued under the Agreement for Letter of Credit,
dated as of                     ,                     , as amended (the “Reimbursement
Agreement”), between PolyOne Corporation and Citibank, N.A.) because
there has been an Event of Default (without regard to the proviso at
the end of Section 14 of the Reimbursement Agreement) under the
Reimbursement Agreement.



     Any number of multiple draws are permitted from time to time.



     Presentation of drawing document(s) may also be made by telecopy transmission to (212)
994-0847, or such other telecopy number identified by Citicorp USA, Inc. in a written notice to
you. To the extent a presentation is made by telecopy transmission, you must provide telephone
notification thereof to Citicorp USA, Inc. ((302) 994-6109, [                    ]), prior to or
simultaneously with the sending of such telecopy transmission, provided, however, that Citicorp
USA, Inc.’s receipt of such telephone notice shall not be a condition to payment hereunder.



     We hereby agree to honor your drawing documents as specified above, if presented in compliance
with the terms and conditions of this Standby Letter of Credit.



     Should you have occasion to communicate with us regarding this Standby Letter of Credit,
please direct your correspondence to our Office, making specific mention of the Letter of Credit
number indicated above.



[Remainder of page left intentionally blank.]




D-3









 








     Except as otherwise expressly stated herein, this Standby Letter of Credit is subject to the
International Standby Practices (“ISP98”), International Chamber of Commerce, Publication No. 590,
and as to matters not addressed by the ISP98, shall be governed by and construed in accordance with
the laws of the State of New York and applicable U.S. Federal Law.



CITICORP USA, INC.




AUTHORIZED SIGNATURE





D-4









 








Schedule 2.01

Commitments




	 	 	 
	Lender	 	Commitment
	 
	 	 
	 
	Citicorp USA, Inc.

	 	$40,000,000
	 
	 	 
	 
	 
	 	 
	 
	 	 
	 
	Total

	 	$40,000,000