RAX_EX 10.1_09.26.11






EXECUTION VERSION












$200,000,000
REVOLVING CREDIT AGREEMENT
dated as of
September 26, 2011
among
RACKSPACE HOSTING, INC.,
as Borrower,


The Lenders Party Hereto,


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


BARCLAYS BANK plc,
as Syndication Agent


and


REGIONS BANK
and
WELLS FARGO BANK, N.A.,
as Co-Documentation Agents


* * * * * 


J.P. MORGAN SECURITIES LLC,
as Sole Bookrunner and Lead Arranger














Andrews Kurth LLP
Counsel to the Administrative Agent



HOU:3135549.8








TABLE OF CONTENTS


	
				
	 
	 
	Page
	


	ARTICLE I DEFINITIONS
	1
	


	Section 1.01
	Defined Terms
	1
	


	Section 1.02
	Classification of Loans and Borrowings
	17
	


	Section 1.03
	Terms Generally
	17
	


	Section 1.04
	Accounting Terms; GAAP
	18
	


	 
	 
	 

	ARTICLE II THE CREDITS
	18
	


	Section 2.01
	Commitments
	18
	


	Section 2.02
	Revolving Loans and Borrowings
	19
	


	Section 2.03
	Requests for Revolving Borrowings
	19
	


	Section 2.04
	Swingline Loans
	20
	


	Section 2.05
	Letters of Credit
	21
	


	Section 2.06
	Funding of Borrowings
	25
	


	Section 2.07
	Interest Elections
	26
	


	Section 2.08
	Termination and Reduction of Commitments
	27
	


	Section 2.09
	Repayment of Loans; Evidence of Debt
	28
	


	Section 2.10
	Prepayment of Loans
	28
	


	Section 2.11
	Fees
	29
	


	Section 2.12
	Interest
	30
	


	Section 2.13
	Alternate Rate of Interest
	31
	


	Section 2.14
	Increased Costs
	31
	


	Section 2.15
	Break Funding Payments
	32
	


	Section 2.16
	Taxes
	33
	


	Section 2.17
	Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	34
	


	Section 2.18
	Mitigation Obligations; Replacement of Lenders
	36
	


	Section 2.19
	Increase in the Commitments
	37
	


	Section 2.20
	Defaulting Lenders
	38
	


	 
	 
	 

	ARTICLE III REPRESENTATIONS AND WARRANTIES
	40
	


	Section 3.01
	Organization; Powers
	40
	


	Section 3.02
	Authorization; Enforceability
	40
	


	Section 3.03
	Governmental Approvals; No Conflicts
	40
	


	Section 3.04
	Financial Condition; No Material Adverse Change
	41
	


	Section 3.05
	Properties
	41
	


	Section 3.06
	Litigation and Environmental Matters
	41
	


	Section 3.07
	Compliance with Laws and Agreements
	41
	


	Section 3.08
	Investment and Holding Company Status
	42
	


	Section 3.09
	Taxes
	42
	


	Section 3.10
	ERISA
	42
	


	Section 3.11
	Disclosure
	42
	


	Section 3.12
	Subsidiaries
	42
	


	Section 3.13
	Margin Stock
	43
	








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	Section 3.14
	Use of Proceeds
	43
	


	Section 3.15
	Solvency
	43
	


	Section 3.16
	Intellectual Property
	43
	


	 
	 
	 

	ARTICLE IV CONDITIONS
	44
	


	Section 4.01
	Effective Date
	44
	


	Section 4.02
	Each Credit Event
	45
	


	 
	 
	 

	ARTICLE V AFFIRMATIVE COVENANTS
	46
	


	Section 5.01
	Financial Statements and Other Information
	46
	


	Section 5.02
	Notices of Material Events
	47
	


	Section 5.03
	Existence; Conduct of Business
	48
	


	Section 5.04
	Payment of Obligations
	48
	


	Section 5.05
	Maintenance of Properties
	48
	


	Section 5.06
	Books and Records; Inspection Rights
	48
	


	Section 5.07
	Compliance with Laws
	48
	


	Section 5.08
	Use of Proceeds and Letters of Credit
	49
	


	Section 5.09
	Insurance
	49
	


	Section 5.10
	Required Guarantors; Additional Subsidiaries
	49
	


	 
	 
	 

	ARTICLE VI NEGATIVE COVENANTS
	49
	


	Section 6.01
	Indebtedness Covenant
	50
	


	Section 6.02
	Lien Covenant
	51
	


	Section 6.03
	Limitation on Fundamental Changes; Lines of Business
	52
	


	Section 6.04
	Restrictions on Investments, Loans, Advances, Guarantees and Acquisitions
	53
	


	Section 6.05
	Limitation on Asset Sales
	53
	


	Section 6.06
	Swap Agreements
	54
	


	Section 6.07
	Limitations on Restricted Payments, Prepayments of Subordinated Indebtedness and Modifications of Subordinated Indebtedness
	54
	


	Section 6.08
	Restrictions on Transactions with Affiliates
	56
	


	Section 6.09
	Restrictions on Restrictive Agreements
	56
	


	Section 6.10
	Financial Covenants
	56
	


	Section 6.11
	Fiscal Year
	57
	


	 
	 
	 

	ARTICLE VII EVENTS OF DEFAULT
	57
	


	 
	 
	 

	ARTICLE VIII THE ADMINISTRATIVE AGENT
	59
	


	 
	 
	 

	ARTICLE IX MISCELLAENOUS
	61
	


	Section 9.01
	Notices
	61
	


	Section 9.02
	Waivers; Amendments; Release of Guarantors
	62
	


	Section 9.03
	Expenses; Indemnity; Damage Waiver
	63
	


	Section 9.04
	Successors and Assigns
	64
	


	Section 9.05
	Survival
	67
	


	Section 9.06
	Counterparts; Integration; Effectiveness
	68
	


	Section 9.07
	Severability
	68
	








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	Section 9.08
	Right of Setoff
	68
	


	Section 9.09
	Governing Law; Jurisdiction; Consent to Service of Process
	68
	


	Section 9.10
	WAIVER OF JURY TRIAL
	69
	


	Section 9.11
	Headings
	69
	


	Section 9.12
	Confidentiality
	69
	


	Section 9.13
	Interest Rate Limitation
	70
	


	Section 9.14
	USA Patriot Act
	71
	


	Section 9.15
	FINAL AGREEMENT OF THE PARTIES
	71
	










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	EXHIBITS:
	 

	 
	 

	Exhibit 1.01A
	Form of Commitment Increase Agreement

	Exhibit 1.01B
	Form of Guarantee Agreement

	Exhibit 1.01C
	Form of New Lender Agreement

	Exhibit 1.01D
	Form of Note

	Exhibit 2.03
	Form of Borrowing Request

	Exhibit 2.07
	Form of Interest Election Request

	Exhibit 5.01
	Form of Compliance Certificate

	Exhibit 9.04
	Form of Assignment and Assumption

	 
	 

	SCHEDULES:
	 

	 
	 

	Schedule 2.01
	Commitments

	Schedule 2.05(k)
	Existing Letter of Credit

	Schedule 3.06
	Disclosed Matters

	Schedule 3.12
	List of Subsidiaries

	Schedule 3.16
	Intellectual Property

	Schedule 6.01(b)
	Existing Indebtedness

	Schedule 6.02(b)
	Existing Liens

	Schedule 6.04(b)
	Existing Investments

	Schedule 6.09
	Restrictive Agreements











-iv-


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THIS REVOLVING CREDIT AGREEMENT (this “Agreement”), dated as of September 26, 2011, is entered into among Rackspace Hosting, Inc., a Delaware corporation, the Lenders party hereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Barclays Bank plc, as Syndication Agent, and Regions Bank and Wells Fargo Bank, N.A., as Co-Documentation Agents.
The parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01  Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
“Adjusted LIBO Rate” means, for any day, 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.
“Adjusted One Month LIBO Rate” means an interest rate per annum equal to the sum of (i) 1.00% per annum plus (ii) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day).
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Alternate Base Rate” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% and (c) the Adjusted One Month LIBO Rate.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted One Month LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, Federal Funds Effective Rate or Adjusted One Month LIBO Rate, respectively.
“Applicable Margin” means, for any day, with respect to any ABR Loan or Eurodollar Revolving Loan, or with respect to the unused fees payable hereunder, the Applicable Margin per annum set forth below under the caption “ABR Spread”, “Eurodollar Spread” or 



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HOU:3135549.8






“Unused Fee Rate”, as the case may be, based upon the Leverage Ratio for the most recently ended trailing four quarter period with respect to which the Borrower is required to have delivered the financial statements pursuant to Section 5.01 hereof (as such Leverage Ratio is reflected in the Compliance Certificate delivered under Section 5.01(c) by the Borrower in connection with such financial statements):
	
					
	CATEGORY
	LEVERAGE RATIO:
	ABR SPREAD
	EURODOLLAR SPREAD
	UNUSED RATE FEE

	I
	≥ 2.25 to 1.0
	1.00%
	2.00%
	0.40%

	II
	≥ 1.50 to 1.0 but < 2.25 to 1.0
	0.75%
	1.75%
	0.35%

	III
	≥ 0.75 to 1.0 but < 1.50 to 1.0
	0.50%
	1.50%
	0.30%

	IV
	< 0.75 to 1.0
	0.25%
	1.25%
	0.25%






For purposes of the foregoing, each change in the Applicable Margin resulting from a change in the Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such financial statements and Compliance Certificate indicating such change and ending on the date immediately preceding the effective date of the next such change; provided that the Leverage Ratio shall be deemed to be in Category I at any time (a) that an Event of Default has occurred and is continuing or (b) if the Borrower fails to deliver the financial statements required to be delivered by it pursuant to Section 5.01(a) or Section 5.01(b), during the period from the expiration of the time for delivery thereof until such financial statements are delivered; provided further that the Leverage Ratio shall be deemed to be in Category IV for the period from the Effective Date through the date that the financial statements and Compliance Certificate are delivered for the fiscal quarter ending September 30, 2011.  In the event that any financial statement delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable, is shown to be inaccurate when delivered (regardless of whether the Commitments are in effect when such inaccuracy is discovered, but subject to the proviso below) and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any such period (an “Applicable Period”) than the Applicable Margin applied for such Applicable Period, and only in such case, then the Borrower shall immediately (i) deliver to the Administrative Agent corrected financial statements for such Applicable Period, (ii) determine the Applicable Margin for such Applicable Period based upon the corrected financial statements and (iii) immediately pay to the Administrative Agent the accrued additional interest owing as a result of such increased Applicable Margin for such Applicable Period; provided that the Borrower shall not have an obligation to comply with the foregoing provisions with respect to any amounts due pursuant to this paragraph in the event the Administrative Agent makes demand therefor after the date that is 180 days after the date on which each of the following shall have occurred: (i) the Commitments have expired or been terminated, (ii) the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, (iii) all Letters of Credit shall have expired or terminated and (iv) all LC Disbursements shall have been reimbursed.  This provision is in addition to the rights of the Administrative Agent and the Lenders with respect to 



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Section 2.12(c) and their other respective rights under this Agreement and shall not limit the right of the Administrative Agent to declare an Event of Default.  
“Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender's Commitment; provided that in the case of Section 2.20 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the total Commitments (disregarding any Defaulting Lender's Commitment) 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 and to any Lender's status as a Defaulting Lender at the time of determination.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit 9.04 or any other form approved by the Administrative Agent.
“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.
“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof; provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of the courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America.
“Borrower” means Rackspace Hosting, Inc., a Delaware corporation.
“Borrowing” means (a) Revolving 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 or (b) a Swingline Loan.
“Borrowing Request” means a request by the Borrower for a Revolving Borrowing substantially in the form of Exhibit 2.03.
“Business Day” means any day that is not a Saturday, Sunday or other day on 



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which commercial banks in Houston, Texas are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Change in Control” means (a) any Person or group (within the meaning of Rule 13d-5 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 as in effect on the date hereof) shall become the beneficial owner (as defined in Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 as in effect on the date hereof) of issued and outstanding Equity Interests of the Borrower representing more than 35% of the aggregate voting power in elections for directors of the Borrower on a fully diluted basis; or (b) a majority of the members of the board of directors of the Borrower shall cease to be either (i) Persons who were members of the board of directors on the Effective Date or (ii) Persons who became members of such board of directors after the Effective Date and whose election or nomination was approved by a vote or consent of the majority of the members of the board of directors that are either described in clause (i) above or who were elected under this clause (ii).
“Change in Law” means the occurrence, after the Effective Date (or with respect to any Lender, if later, the date on which such Lender becomes a Lender), of any of the following: (a) the adoption or taking into effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) of any Governmental Authority; provided, however, that notwithstanding anything herein to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued and all requests, rules, regulations, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Regulations and Supervisory Practices (or any successor or similar authority) or any Governmental Authority with respect to the implementation of the Basel III Accord shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“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, including the acquisition of participations in Letters of Credit and Swingline Loans hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08, (b) increased from time to time pursuant to Section 2.19 and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender's Commitment is set forth on Schedule 2.01, or in the 



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Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.  The initial aggregate amount of the Lenders' Commitments is $200,000,000.
“Commitment Increase Agreement” means a Commitment Increase Agreement entered into by a Lender in accordance with Section 2.19 and accepted by the Administrative Agent in the form of Exhibit 1.01A or any other form approved by the Administrative Agent.
“Compliance Certificate” has the meaning set forth in Section 5.01. 
“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 Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Revolving Loans and its LC Exposure and Swingline Exposure at such time.
“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender.
“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.
“Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender's good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender's good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party's receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.
“Disclosed Matters” means the actions, suits and proceedings set forth in Part A 



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of Schedule 3.06 and the environmental matters disclosed in Part B of Schedule 3.06.
“dollars” or “$” refers to lawful money of the United States of America.
“Domestic Subsidiary” means any Subsidiary that is not a Foreign Subsidiary.
“EBITDA” means, for any period, without duplication, Net Income plus, the following to the extent deducted in calculating such Net Income: (a) Interest Expense for such period, (b) the provision for Federal, state, local and foreign taxes payable during such period, (c) depreciation and amortization expense (plus any non-cash goodwill or other intangible asset impairment charges) and (d) non-cash expenses related to equity compensation.
“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to public health and safety matters.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan or Multiemployer Plan (other than an event for which the 30 day notice period is waived); (b) the existence with respect to any Plan of any unpaid “minimum required contribution” (as defined in Section 430 of the Code or 



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Section 303 of ERISA), whether or not waived, or with respect to any Multiemployer Plan, any “accumulated funding deficiency” (as defined in Section 431 of the Code or Section 304 of ERISA), whether or not waived, and without regard to an extension of any amortization  period (as described in Section 431(d) of the Code or Section 304(d) of ERISA); (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan or Multiemployer Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan or Multiemployer Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or Multiemployer Plan or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.  
“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans 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 VII.
“Excluded Domestic Subsidiary” means (i) any Domestic Subsidiary that is wholly owned directly by one or more Foreign Subsidiaries and (ii) up to three additional Domestic Subsidiaries at any time existing that are formed for the purpose of real property acquisitions and the combined assets of which shall not exceed $250,000 in cash at any time.  
“Excluded Taxes” means, with respect to the Administrative 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 Borrower hereunder, (a) income, franchise or other imposed taxes on (or measured by) its income, taxable margin, receipts or capital by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.18(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender's failure to comply with Section 2.16(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.16(a), and (d) any withholding tax imposed by FATCA.
“Existing Letter of Credit” means the letter of credit described on Schedule 2.05(k).
“FATCA” means Sections 1471 through 1474 of the Code (and any amendment 



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or successor sections thereto) and any regulations or official interpretations thereof.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.
“First-Tier Foreign Subsidiary” means a Foreign Subsidiary that is owned directly by the Borrower or a Domestic Subsidiary that is a Guarantor or by the Borrower and a Domestic Subsidiary that is a Guarantor.
“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
“Foreign Subsidiary” means any Subsidiary organized under the laws of a jurisdiction other than the United States or any of its territories or possessions or any political subdivision thereof.  For the avoidance of doubt, the Commonwealth of Puerto Rico is not a territory, possession or political subdivision of the United States.
“GAAP” means, except as provided in Section 1.04, generally accepted accounting principles as in effect from time to time in the United States of America, applied in a manner consistent with that used in preparing the financial statements of the Borrower.
“Governmental Authority” means the government of the United States of America, 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.
“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness 



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or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
“Guarantee Agreement” means the Guarantee of the Guarantors, substantially in the form of Exhibit 1.01B hereto, guarantying the Obligations and all other Indebtedness of the Borrower to the Administrative Agent and the Lenders in respect of any hedging obligations, any overdrafts or treasury, depository, cash management, or similar services.  
“Guarantors” means all Domestic Subsidiaries of the Borrower that Guarantee the Obligations in accordance with Section 5.10, in each case unless and until released in accordance with the Loan Documents.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“IFRS” means the international financial reporting standard which are in effect from time to time and as adopted by the International Accounting Standards Board from time to time and applied on a consistent basis.
“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. 
“Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.
“Indemnitee” has the meaning set forth in Section 9.03.
“Information” has the meaning set forth in Section 9.12.



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“Intellectual Property” has the meaning set forth in Section 3.16.
“Interest Coverage Ratio” means, on the last day of each fiscal quarter, the ratio of EBITDA to Interest Expense, in each case, for the immediately preceding four full fiscal quarters for which financial statements are available, after giving pro forma effect to any acquisitions or dispositions occurring during such period as if such acquisition or disposition took place on the first day of such period.
“Interest Election Request” means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.07.
“Interest Expense” means, for any period, for the Borrower and the Subsidiaries on a consolidated basis, the sum of all interest paid or payable (including the portion of rents payable under Capital Leases allocable to interest) plus all original issue discounts and other interest expense associated with Indebtedness amortized or required to be amortized in accordance with GAAP.
“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December, (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, and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid.
“Interest Period” means, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period 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.
“Investment” has the meaning set forth in Section 6.04.
“Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.05(i).  The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.  With respect to the Existing Letter of Credit, Comerica Bank shall be an Issuing Bank.
“LC Disbursement” means a payment made by the Issuing Bank pursuant to a 



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Letter of Credit.
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.
“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.
“Letter of Credit” means any letter of credit issued pursuant to this Agreement.
“Leverage Ratio” means, on the last day of each fiscal quarter, the ratio of (a) Total Debt to (b) EBITDA for the immediately preceding four full fiscal quarters for which financial statements are available, after giving pro forma effect to any acquisitions or dispositions occurring during such period as if such acquisition or disposition occurred on the first day of such period. 
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Screen LIBOR1 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate rounded upwards, if necessary, to the next 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 the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“Loan Documents” means this Agreement, the Notes, the Guarantee Agreement, the Pledge Agreement and any other documents executed in connection herewith or therewith.
“Loan Parties” means the Borrower and the Guarantors.
“Loans” means the Revolving Loans and the Swingline Loans.



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“Material Adverse Effect” means any event, development or circumstance that has had or could reasonably be expected to have a material adverse effect on (a) the business, assets, property or condition (financial or otherwise) of the Borrower and the Subsidiaries taken as a whole or (b) the validity of the Loan Documents or the rights and remedies of the Administrative Agent and the Lenders thereunder.
“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and the Subsidiaries in an aggregate principal amount exceeding $15,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.
“Maturity Date” means the fifth anniversary of the Effective Date.
“Moody's” means Moody's Investors Service, Inc.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net Income” means, for any period, for the Borrower and the Subsidiaries on a consolidated basis, the net income or loss of the Borrower and the Subsidiaries for such period determined in accordance with GAAP.
“New Lender” has the meaning set forth in Section 2.19.
“New Lender Agreement” means a New Lender Agreement entered into by a New Lender in accordance with Section 2.19 and accepted by the Administrative Agent in the form of Exhibit 1.01C or any other form approved by the Administrative Agent.
“Note” means the promissory notes substantially in the form of Exhibit 1.01D executed by the Borrower to the order of a Lender, partially evidencing the Obligations.
“Obligations” means all of the Borrower's obligations and duties under this Agreement and each of the other Loan Documents to which it is a party.
“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.
“Participant” has the meaning set forth in Section 9.04.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“Permitted Acquisition” means any acquisition (by merger or otherwise) by the 



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Borrower or a Subsidiary of all or substantially all the assets of, or all the Equity Interests in, a Person or division or line of business of a Person, if (a) immediately after giving effect thereto, no Default has occurred and is continuing or would result therefrom, (b) the business of such acquired Person, or such acquired business, is reasonably related to the business of the Borrower or a Subsidiary on the Effective Date, (c) at the time of such acquisition the Pro Forma Leverage Test is satisfied and (d) in the case of any acquisition in which the aggregate cash consideration paid by the Borrower and the Subsidiaries exceeds $25,000,000 (or the equivalent amount in a foreign currency), the Borrower has delivered to the Administrative Agent an officer's certificate certifying that the requirement set forth in clause (c) above has been satisfied and that liquidity (unrestricted cash and Permitted Investments plus unused Commitments), calculated on a pro forma basis after giving effect to such acquisition, is at least $100,000,000, together with all financial information reasonably requested by the Administrative Agent relating to the Person or assets acquired and reasonably detailed calculations demonstrating satisfaction of the Leverage Ratio and liquidity requirements set forth above.
“Permitted Encumbrances” means:
(a)Liens imposed by law for taxes and other governmental charges that are not yet delinquent or are being contested in good faith, with adequate reserves, and the failure of such contest could not reasonably be expected to result in a Material Adverse Effect;


(b)carriers', warehousemen's, mechanics', materialmen's, repairmen's, landlord's and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in good faith, with adequate reserves and the failure of such contest could not reasonably be expected to result in a Material Adverse Effect;


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


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


(e)judgment Liens in respect of judgments that do not constitute an Event of Default; 


(f)Liens of financial institutions on account or deposits maintained therein to the extent arising by the operation of law or within the documentation establishing said account to the extent same secure charges, fees and expenses owing or potentially owing to said institution; and


(g)easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or 



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interfere with the ordinary conduct of business of the Borrower or any Subsidiary;


provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
“Permitted Investments” means:
(a)direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or Canada (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America or Canada);


(b)investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a rating of A2 or better by S&P, P2 or better by Moody's, or R1 “mid” or better by The Dominion Bond Rating Service; 


(c)investments in certificates of deposit, banker's acceptances and demand and time deposits (including eurodollar deposits) maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, (i) any Lender or any domestic office, or foreign branch or other Affiliate of a Lender, (ii) any domestic office of any commercial bank organized under the laws of the United States of America or Canada or any State or Province thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000 and (iii) any commercial bank or similar entity organized under the laws of the jurisdiction in which a Foreign Subsidiary maintains an office or engages in business if, in the case of deposits under this clause (c)(iii), such deposits are made in the ordinary course of business for cash management purposes;


(d)fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and


(e)money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P or Aaa by Moody's and (iii) have portfolio assets of at least $5,000,000,000. 


“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Pro Forma Financial Tests” means, collectively, the Pro Forma Interest Coverage Test and the Pro Forma Leverage Test.
“Pro Forma Interest Coverage Ratio” means, on any date of determination, the ratio of EBITDA to Interest Expense, in each case, for the immediately preceding four full fiscal quarters for which financial statements are available, after giving pro forma effect to any acquisitions or dispositions or incurrence or repayments of Indebtedness occurring from the start of such period through the date of determination and the event for which the Pro Forma Interest 



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Coverage Ratio is being calculated, as if such acquisition or disposition, incurrence or repayment of Indebtedness or such event took place on the first day of such period.
“Pro Forma Interest Coverage Test” means, on any date of determination, that the Pro Forma Interest Coverage Ratio is not less than 3.00 to 1.00.
“Pro Forma Leverage Ratio” means, on any date of determination, the ratio of (a) Total Debt to (b) EBITDA for the immediately preceding four full fiscal quarters for which financial statements are available, after giving pro forma effect to (x) any acquisitions or dispositions occurring from the start of such period through the date of determination and (y) any acquisition for which the Pro Forma Leverage Ratio is being calculated, as if each such acquisition or disposition took place on the first day of such period.  For purposes of the Pro Forma Leverage Ratio, any contemplated Indebtedness in connection with which the Pro Forma Leverage Ratio is being calculated shall be included in Total Debt.
 “Pro Forma Leverage Test” means, on any date of determination, (i) for purposes of Permitted Acquisitions, that the Pro Forma Leverage Ratio is not greater than 2.50 to 1.00 and (ii) for all other purposes, that the Pro Forma Leverage Ratio is not greater than 3.00 to 1.00.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“Pledge Agreement” means the Pledge Agreement covering 65% of the Equity Interests in each First-Tier Foreign Subsidiary listed therein, in form and substance reasonably satisfactory to the Administrative Agent.
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A., as its prime rate in effect at its principal office in Houston, Texas; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
“Register” has the meaning set forth in Section 9.04.
“Related Parties” means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliates.
“Required Lenders” means, at any time, Lenders holding more than 50% of the sum of the total Commitments (or, if the Commitments have terminated or expired, the Credit Exposures) at such time, as adjusted pursuant to Section 2.20.
“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or 



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similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests.
“Revolving Borrowing” means a Borrowing made pursuant to Section 2.02.
“Revolving Loan” means a Loan made pursuant to Section 2.02.
“S&P” means Standard & Poor's Ratings Services, a division of The McGraw Hill Companies, Inc.
“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 with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity with respect to which both (1) the accounts of such entity would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, and (2) either (a) Equity Interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests of such entity are, as of such date, owned, controlled or held, or (b)  such entity is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.  Unless otherwise indicated, “Subsidiary” shall mean a Subsidiary of the Borrower.
“Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total  Swingline Exposure at such time.
“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender 



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of Swingline Loans hereunder.
“Swingline Loan” means a Loan made pursuant to Section 2.04.
“Tangible Assets” means, on any date for the Borrower or any Subsidiary, total assets minus the sum of (i) intangible assets and (ii) goodwill, in each case as determined in accordance with GAAP based on the financial statements most recently delivered pursuant to Section 5.01(a) or (b), as applicable.
“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.
“Total Required Assets” means, on any date for the Loan Parties, the Tangible Assets of the Borrower on a consolidated basis minus (a) Tangible Assets of Subsidiaries that are not Guarantors, (b) restricted cash of the Loan Parties and (c) the book value of the Capital Lease Obligations of the Loan Parties.  
“Total Debt” means the consolidated total Indebtedness of the Borrower and the Subsidiaries.
“Transactions” means the execution, delivery and performance by the Borrower of this Agreement, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.
“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02  Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan”).  Borrowings also may be classified and referred to by Type (e.g., a “Eurodollar Borrowing”).
Section 1.03  Terms Generally.   The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed 



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to refer to this Agreement in its entirety and not to any particular provision hereof, (d) 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 (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
Section 1.04  Accounting Terms; GAAP.   Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP in a manner consistent with that used in preparing the financial statements of the Borrower.  If at any time any change in GAAP (including the adoption of IFRS) would affect the computation of any financial ratio or requirement set forth herein, and the Borrower, the Administrative Agent or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP without giving effect to such change therein and the Borrower shall provide to the Administrative Agent and the Lenders reconciliation statements showing the difference in such calculation together with the delivery of quarterly and annual financial statements required hereunder.  For purposes of determining compliance with any provision of this Agreement, the determination of whether a lease is to be treated as an operating lease or capital lease shall be made without giving effect to any change in accounting for leases pursuant to GAAP resulting from the implementation of proposed Accounting Standards Update (ASU) Leases (Topic 840) issued August 17, 2010, or any successor proposal.  Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.
ARTICLE II
The Credits
Section 2.01  Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount at any time outstanding that will not result in (a) such Lender's Credit Exposure exceeding such Lender's Commitment or (b) the sum of the total Credit Exposures exceeding the total Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow 



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Revolving Loans.
Section 2.02  Revolving Loans and Borrowings.  
(a)Each Revolving 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 Section 2.13, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith; provided that any Borrowing made on the Effective Date must be made as an ABR Borrowing, unless the Borrower shall have notified the Administrative Agent in writing not later than 10:00 a.m., Houston time, three (3) Business Days before the Effective Date of its election for the initial Borrowing to be a Eurodollar Borrowing.  Each Swingline Loan shall be an ABR Loan.  Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Revolving Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Revolving Loan in accordance with the terms of this Agreement.


(c)At the commencement of each Interest Period for any Eurodollar Revolving 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 Revolving 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 Revolving 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 2.05(e).  Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $1,000,000.  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 five (5) Eurodollar Revolving Borrowings outstanding.


(d)Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Revolving Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.


Section 2.03  Requests for Revolving Borrowings.  To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 10:00 a.m., Houston time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., Houston time, on the date of the proposed Borrowing; provided that any such notice of an ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be given not later than 10:00 a.m., Houston time, on the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by telecopy or email to the Administrative Agent of a written Borrowing 



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Request.  Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:


(i)the aggregate amount of the requested Borrowing;


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


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


(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 Borrower's account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.


If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower 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  Swingline Loans.  
(a)Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $25,000,000 or (ii) the sum of the total Credit Exposures exceeding the total Commitments; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.


(b)To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy or email), not later than 3:00 p.m., Houston time, on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan.  The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower.  The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e), by remittance to the Issuing Bank) by 4:00 p.m., Houston time, on the requested date of such Swingline Loan.





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(c)The Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., Houston time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender's Applicable Percentage of such Swingline Loan or Loans.  Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender's Applicable Percentage of such Swingline Loan or Loans.  Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders.  The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason.  The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.  


Section 2.05  Letters of Credit.
  
(a)General.  Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own account, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.


(b)Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) 



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to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank's standard form in connection with any request for a Letter of Credit; provided that (a) in the event of any conflict between such application and this Agreement, this Agreement shall control, and (b) any grant of a Lien contained in such application shall be ineffective so long as this Agreement remains in place.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $50,000,000 and (ii) the total Credit Exposures shall not exceed the total Commitments.


(c)Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date; provided, however, that any Letter of Credit may provide for the renewal thereof for additional periods not in excess of one-year each (which shall in no event extend beyond the date referred to in clause (ii) above).


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


(e)Reimbursement.  If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, Houston time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., Houston time, on such date, or, if such notice 



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has not been received by the Borrower prior to such time on such date, then not later than 12:00 noon, Houston time, on (i) the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m., Houston time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that, if such LC Disbursement is not less than $100,000, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or Section 2.04 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower's obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan.  If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender's Applicable Percentage thereof.  Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear.  Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.


(f)Obligations Absolute.  The Borrower's obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower's obligations hereunder.  Neither the Administrative Agent, the Lenders nor the Issuing 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 any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to 



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the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by (a) the Issuing Bank's failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof or (b) the Issuing Bank's gross negligence or willful misconduct.  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 a 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, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.


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


(h)Interim Interest.  If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.12(c) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.


(i)Replacement of the Issuing Bank.  The Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank.  At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.11(b).  From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement 



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with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.


(j)Cash Collateralization.  If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Lenders holding at least fifty percent (50%) of the Commitments (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 25% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand, notice of acceleration, notice of intent to accelerate or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of ARTICLE VII.  Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Obligations.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.  Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent consistent with the Administrative Agent's usual practices and at the Borrower's risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 25% of the total LC Exposure), be applied to satisfy other Obligations.  If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events of Default have been cured or waived.


(k)Existing Letter of Credit.  The Existing Letter of Credit will be considered a Letter of Credit under this Credit Agreement for all purposes.


Section 2.06  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 by 2:00 p.m., Houston time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.04.  The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Administrative Agent in Houston and designated by the Borrower in the applicable Borrowing Request; provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be remitted by the Administrative Agent to the Issuing Bank.



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(b)Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to such Borrowing (without any obligation to pay any break funding payment under Section 2.15 in connection with such payment).  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such Borrowing.  If the Borrower pays such amount to the Administrative Agent, it shall not relieve the defaulting Lender of its legal responsibility for its default.


Section 2.07  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 Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower 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.  This Section shall not apply to Swingline Borrowings, which may not be converted or continued.


(b)To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving 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 telecopy or email to the Administrative Agent of a written Interest Election Request signed by the Borrower in the form of the Interest Election Request attached hereto as Exhibit 2.07.


(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 



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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 Borrower 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 Borrower 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 Borrower, then, 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 2.08  Termination and Reduction of Commitments.
  
(a)Unless previously terminated, the Commitments shall terminate on the Maturity Date.


(b)The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.10, the Credit Exposure would exceed the total Commitments.


(c)The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the 



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effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable.  Any termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.


Section 2.09  Repayment of Loans; Evidence of Debt.
  
(a)The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then‐unpaid principal amount of each Revolving Loan on the Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the Maturity Date; provided that on each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then outstanding.


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


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


(e)Any Lender may request that Loans made by it be evidenced by a Note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a Note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns).  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).


Section 2.10  Prepayment of Loans.
  
(a)The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (b) of this Section, in each case without premium or penalty other than as specified in Section 2.15.





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(b)The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed in writing) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., Houston time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., Houston time, one Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, Houston 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 Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02 (other than prepayments required under paragraph (c)).  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 2.12.


(c)If at any time the total Credit Exposures exceed the Total Commitments, the Borrower shall (i) prepay Revolving Borrowings in an aggregate principal amount equal to such excess, and (ii) if any excess remains after prepaying all of the Revolving Borrowings as a result of LC Exposure, pay to the Administrative Agent on behalf of the Lender an amount equal to such excess to be held as cash collateral as provided in Section 2.05(j).


Section 2.11  Fees.
  
(a)The Borrower agrees to pay to the Administrative Agent for the account of each Lender an unused fee, which shall accrue at the Unused Fee Rate described in the definition of “Applicable Margin” on the daily unutilized amount of the Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which such Commitment terminates.  Accrued unused fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the Effective Date.  All unused fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  For the purposes of calculating the unused Commitment of each Lender, LC Exposure shall count as usage, but Swingline Loans made by the Swingline Lender shall not count as usage unless and until the Lenders have acquired participations therein as contemplated by Section 2.04(c).


(b)The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Margin used to determine the interest rate applicable to Eurodollar Revolving Loans on the average daily amount of such Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender's Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to 



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unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank's standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable in arrears on the third Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).


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


(d)All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of unused fees and participation fees, to the Lenders.  Fees paid shall not be refundable under any circumstances.


Section 2.12  Interest.  


(a)The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Margin.


(b)The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin.


(c)Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2.0% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2.0% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.


(d)Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (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 Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of 



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any conversion of any Eurodollar Revolving 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.


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


Section 2.13  Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a Eurodollar Borrowing:


(i)the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or


(ii)the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;


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


Section 2.14  Increased Costs.  
(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 any Letter of Credit or participation therein;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or 



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maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, on an after‐tax basis 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 by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or the Issuing Bank's policies and the policies of such Lender's or the Issuing Bank's holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, 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 on an after‐tax basis 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 paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.


(d)Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or the Issuing Bank's right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than two hundred seventy (270) days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's or the Issuing Bank's intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.


Section 2.15  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 Borrower pursuant to Section 2.18, then, 



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in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  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 that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such 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 period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue 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 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 Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.


Section 2.16  Taxes.  


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


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


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


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



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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 Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate.


(f)If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or other amounts as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.16, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.16 with respect to the Taxes or other amounts giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.


(g)In the case of a Lender that would be subject to withholding tax imposed by FATCA on payments made on the account of any obligation of the Borrower hereunder if such Lender fails to comply with the applicable requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall provide such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Administrative Agent or the Borrower as may be necessary for the Borrower to comply with its obligations under FATCA, to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from any such payments.


Section 2.17  Payments Generally; Pro Rata Treatment; Sharing of Set-offs
  
(a)The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.14, Section 2.15 or Section 2.16, or otherwise) prior to 12:00 noon, Houston time, on the date when due, in immediately available funds, without set off or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices at 712 Main Street, Houston, Texas, except payments to be made directly to the Issuing Bank or 



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Swingline Lender as expressly provided herein and except that payments pursuant to Section 2.14, Section 2.15 or Section 2.16 and Section 9.03 shall be made directly to the Persons entitled thereto.  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, towards payment of 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, towards payment of 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, by exercising any right of set off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements and Swingline Loans 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 Revolving Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered,  such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.


(d)Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on 



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


(e)If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(c), Section 2.05(d), Section 2.05(e), Section 2.06(b), Section 2.17(d), or Section 9.03(c) then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender and for the benefit of the Administrative Agent, the Swingline Lender or the Issuing Bank to satisfy such Lender's obligations under such Sections until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under such Sections; in the case of each of (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.


Section 2.18  Mitigation Obligations; Replacement of Lenders.
  
(a)If any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, 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 2.14 or Section 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.


(b)If any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender becomes a Defaulting Lender, or any Lender refuses to consent to an amendment, modification or waiver of this Agreement that requires consent of 100% of Lenders pursuant to Section 9.02 hereof, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) if the proposed assignee is not at such time a Lender, the Borrower 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, delayed or conditioned, (ii) such Lender shall have received payment of an amount 



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equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments in the future.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.


Section 2.19  Increase in the Commitments.  


(a)If no Default shall have occurred and be continuing, the Borrower may at any time during the Availability Period request one or more increases of the Commitments by notice to the Administrative Agent in writing of the amount of such proposed increase (such notice, a “Commitment Increase Notice”); provided, however, that (i) the Commitment of any Lender may not be increased without such Lender's consent, (ii) the minimum amount of any such increase shall be $10,000,000 and (iii) the aggregate amount of the Lenders' Commitments, after giving effect to any such increase, shall not exceed $400,000,000.


(b)Following any Commitment Increase Notice, the Borrower may, in its sole discretion, but with the consent of the Administrative Agent as to any Person that is not at such time a Lender (which consent shall not be unreasonably withheld, delayed or conditioned), offer to any existing Lender or to one or more additional banks or financial institutions the opportunity to participate in all or a portion of the increased Commitments pursuant to paragraph (c) or (d) below, as applicable, by notifying the Administrative Agent.  Promptly and in any event within five (5) Business Days after receipt of notice from the Borrower of its desire to offer such unsubscribed commitments to certain existing Lenders, to the additional banks or financial institutions identified therein or to such existing Lenders, additional banks or financial institutions as may be identified by the Administrative Agent and approved by the Borrower, the Administrative Agent shall notify such proposed lenders of the opportunity to participate in all or a portion of such unsubscribed portion of the increased Commitments.


(c)Any additional bank or financial institution that the Borrower selects to offer participation in the increased Commitments shall notify the Administrative Agent of its agreement to participate in the increased Commitments within five (5) Business Days of the date the Administrative Agent's notice described in (b) above is sent and shall execute and deliver to the Administrative Agent a New Lender Agreement setting forth its Commitment, and upon the effectiveness of such New Lender Agreement such bank or financial institution (a “New Lender”) shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement, and the signature pages hereof shall be deemed to be amended to add the name of such New Lender and Schedule 2.01 and the definition of Commitment in Section 1.01 hereof shall be deemed amended to increase the aggregate Commitments of the Lenders by the Commitment of such New Lender, provided that the Commitment of any New Lender shall be an amount not less than $10,000,000.  Each New Lender Agreement shall be irrevocable and shall be effective upon notice thereof by the 



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Administrative Agent at the same time as that of all other New Lenders or increasing Lenders.


(d)Any Lender that accepts an offer to it by the Borrower to increase its Commitment pursuant to this Section 2.19 shall, in each case, execute a Commitment Increase Agreement with the Borrower and the Administrative Agent, whereupon such Lender shall be bound by and entitled to the benefits of this Agreement with respect to the full amount of its Commitment as so increased, and Schedule 2.01 and the definition of Commitment in Section 1.01 hereof shall be deemed to be amended to reflect such increase.  Any Commitment Increase Agreement shall be irrevocable and shall be effective upon notice thereof by the Administrative Agent at the same time as that of all other New Lenders and increasing Lenders.


(e)The effectiveness of any New Lender Agreement or Commitment Increase Agreement shall be contingent upon receipt by the Administrative Agent of corporate resolutions of the Borrower authorizing such increase.  Once a New Lender Agreement or Commitment Increase Agreement becomes effective, the Administrative Agent shall reflect the increases in the Commitments effected by such agreements by appropriate entries in the Register.


(f)If any bank or financial institution becomes a New Lender pursuant to Section 2.19(c) or any Lender's Commitment is increased pursuant to Section 2.19(d), additional Loans made on or after the effectiveness thereof (the “Re-Allocation Date”) shall be made pro rata based on their respective Commitments in effect on or after such Re-Allocation Date (except to the extent that any such pro rata borrowings would result in any Lender making an aggregate principal amount of Loans in excess of its Commitment, in which case such excess amount will be allocated to, and made by, such New Lender and/or Lenders with such increased Commitments to the extent of, and pro rata based on, their respective Commitments), and continuations of Loans outstanding on such Re-Allocation Date shall be effected by repayment of such Loans on the last day of the Interest Period applicable thereto or, in the case of ABR Loan, on the date of such increase, and the making of new Loans of the same Type pro rata based on the respective Commitments in effect on and after such Re-Allocation Date.


(g)If on any Re-Allocation Date there is an unpaid principal amount of  Eurodollar Loans, such Eurodollar Loans shall remain outstanding with the respective holders thereof until the expiration of their respective Interest Periods (unless the Borrower elects to prepay any thereof in accordance with the applicable provisions of this Agreement), and interest on and repayments of such Eurodollar Loans will be paid thereon to the respective Lenders holding such Eurodollar Loans pro rata based on the respective principal amounts thereof outstanding.


(h)Upon the effectiveness of any Commitment Increase Agreement, Schedule 2.01 and other pertinent sections hereof shall be automatically and proportionately modified to reflect the increased Commitment, the exact figures to be agreed between the Borrower and the Administrative Agent, and all references to the Commitments shall be deemed amended mutatis mutandis.


Section 2.20  Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:



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(a)fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.11(a);


(b)the Commitment and Credit Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 9.02), provided that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender, unless the effect of same is to eliminate the Defaulting Lender's Commitment (which shall require only the consent of the Lenders that are not Defaulting Lenders);


(c)if any Swingline Exposure or LC Exposure exists at the time a Lender becomes a Defaulting Lender then:


(i)all or any part of such Swingline Exposure and LC Exposure shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent (x) the sum of all non-Defaulting Lenders' Credit Exposures plus such Defaulting Lender's Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders' Commitments and (y) the conditions set forth in Section 4.02 are satisfied at such time; 


(ii)if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize such Defaulting Lender's LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.05(j) for so long as such LC Exposure is outstanding; 


(iii)if the Borrower cash collateralizes any portion of such Defaulting Lender's LC Exposure pursuant to Section 2.20(c), the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.11(b) with respect to such Defaulting Lender's LC Exposure during the period such Defaulting Lender's LC Exposure is cash collateralized;


(iv)if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to Section 2.20(c), then the fees payable to the Lenders pursuant to Section 2.11(a) and Section 2.11(b) shall be adjusted in accordance with such non-Defaulting Lenders' Applicable Percentages; and 


(v)if any Defaulting Lender's LC Exposure is neither cash collateralized nor reallocated pursuant to Section 2.20(c), then, without prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder, all facility fees that otherwise would have been payable to such Defaulting Lender (solely with respect to the portion of such Defaulting Lender's Commitment that was utilized by such LC Exposure) and letter of credit fees payable under Section 2.11(b) with respect to such Defaulting Lender's LC 



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Exposure shall be payable to the Issuing Bank until such LC Exposure is cash collateralized and/or reallocated; and


(d)so long as any Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is reasonably satisfied that the related exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.20(c), and participating interests in any such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.20(c)(i) (and Defaulting Lenders shall not participate therein).


In the event that the Administrative Agent, the Borrower, the Issuing Bank and the Swingline Lender each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender's Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
Section 3.01  Organization; Powers.  Each of the Borrower and the Subsidiaries is duly organized and validly existing under the laws of the jurisdiction of its organization and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, has all requisite power and authority to carry on its business as now conducted, and is qualified to do business in, and is in good standing in, its jurisdiction of organization and every jurisdiction where such qualification is required.
Section 3.02  Authorization; Enforceability.  The Transactions are within the Borrower's corporate powers and have been duly authorized by all necessary corporate and, if required, stockholder action.  This Agreement has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
Section 3.03  Governmental Approvals; No Conflicts.  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect and (ii) such as may be required pursuant to the Pledge Agreement, (b) will not violate (i) any applicable law or regulation, (ii) the charter, by-laws or other organizational documents of the Borrower or any Subsidiary or (iii) any order of any Governmental Authority, (c) will not 



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result in a default under any indenture, agreement or other instrument binding upon the Borrower or any Subsidiary or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any Subsidiary, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any Subsidiary except in each case under clauses (a), (b)(i), (c) or (d), as could not reasonably be expected to result in a Material Adverse Effect.
Section 3.04  Financial Condition; No Material Adverse Change.  
(a)The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows as of and for the fiscal year ended December 31, 2010, reported on by KPMG LLP, independent public accountants.  Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP.


(b)As of the Effective Date, since December 31, 2010, there has been no material adverse change in the business, assets, operations or condition, financial or otherwise, of the Borrower and the Subsidiaries, taken as a whole.


Section 3.05  Properties.  Each of the Borrower and the Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes in such a way that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.


Section 3.06  Litigation and Environmental Matters.
  
(a)There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any Subsidiary (i) that could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters in Part A of Schedule 3.06) or (ii) that involve this Agreement or the Transactions.


(b)Except with respect to Disclosed Matters in Part B of Schedule 3.06 and any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any Subsidiary (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any reasonable basis for any Environmental Liability.


(c)Since the Effective Date, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.


Section 3.07  Compliance with Laws and Agreements.  Each of the Borrower 



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


Section 3.08  Investment and Holding Company Status.  Neither the Borrower nor any Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.


Section 3.09  Taxes.  Each of the Borrower and the Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to file such returns and reports or pay such Taxes could not reasonably be expected to result in a Material Adverse Effect.


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


Section 3.11  Disclosure.  The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any Subsidiary is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  None of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, (i) with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time and (ii) with respect to financial statements, the Borrower represents only that such financial statements present fairly, in all material respects, the financial position and results of operation and cash flows of the Borrower and the Subsidiaries as of such dates and for such periods in accordance with GAAP. 


Section 3.12  Subsidiaries.  Schedule 3.12 sets forth the name of, and the ownership interest of the Borrower and any Subsidiary in, each Subsidiary (other than the Domestic Subsidiaries described in clause (ii) of the definition of “Excluded Domestic Subsidiary) and identifies which are Foreign Subsidiaries, First-Tier Foreign Subsidiaries and Guarantors as of the Effective Date.  Other than as contemplated by the Pledge Agreement, the shares of capital stock or other ownership interests of each Subsidiary are owned by the Borrower, directly or indirectly, free and clear of all Liens. 





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Section 3.13  Margin Stock.  Neither the Borrower nor any Subsidiary is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock (as defined in Registration U of the Board).  The proceeds of the Loans and the Letters of Credit will not be used in a way that will result in any of the Loans or the Letters of Credit under this Agreement being in violation of Regulation U or Regulation X of the Board. 


Section 3.14  Use of Proceeds.  The proceeds of the Loans shall be used to repay existing Indebtedness, for working capital and for general corporate purposes (including, without limitation, Permitted Acquisitions) of, in each case, the Borrower and the Subsidiaries.  The Borrower represents and warrants to the Lenders and the Administrative Agent that all Loans will be for business, commercial, investment or other similar purpose and not primarily for personal, family, household or agricultural use, as such terms are used in the Texas Finance Code. 


Section 3.15  Solvency.  Immediately following the making of each Loan on the Effective Date and after giving effect to the application of the proceeds of each such Loan, (a) the fair market value of the assets of each Loan Party (individually and on a consolidated basis) will exceed its debts and liabilities; (b) the present fair saleable value of the property of each Loan Party (individually and on a consolidated basis) will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities; (c) each Loan Party (individually and on a consolidated basis) will be able to pay its debts and liabilities as they become absolute and mature; and (d) each Loan Party (individually and on a consolidated basis the Borrower and the Subsidiaries) will not have unreasonably small capital with which to conduct its business as such business is now conducted and is proposed to be conducted following the Effective Date.


Section 3.16  Intellectual Property.  


(a)Each of the Borrower and the Subsidiaries owns, or is licensed to use, all patents, patent applications, trademarks (whether registered or not), trademark applications, trade names, service marks, and copyrights owned by the Borrower or any Subsidiary (the “Intellectual Property”) material to its business.  As of the Effective Date, (i) except as could not reasonably be expected to have a Material Adverse Effect, none of the Intellectual Property has been declared invalid or is the subject of a pending or, to the knowledge of the Borrower or any Subsidiary, threatened action for cancellation or a declaration of invalidity, and there is no pending judicial proceeding involving any claim, and neither the Borrower nor any Subsidiary has received any written notice or claim, of any infringement, misuse or misappropriation by the Borrower or any Subsidiary of any trademark, trade name, copyright, license or similar intellectual property right owned by any third party, except as described in Schedule 3.16 and (ii) there is no pending judicial proceeding involving any claim, and neither the Borrower nor any Subsidiary has received any written notice or claim, of any infringement, misuse or misappropriation by the Borrower or any Subsidiary of any patent owned by any third party, except as described in Schedule 3.16.  


(b)To the knowledge of the Borrower and the Subsidiaries, except as set forth in Schedule 3.16, the conduct by the Borrower and the Subsidiaries of their respective businesses as presently conducted does not conflict with, infringe on, or otherwise violate any copyright, 



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trade secret, or patent rights of any Person except where such conflict, infringement or violation could not reasonably be expected to have a Material Adverse Effect.


ARTICLE IV


Conditions


Section 4.01  Effective Date.  The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which the Administrative Agent (or its counsel) shall have received from each Loan Party, in form and substance satisfactory to it:


(a)a counterpart of this Agreement signed by the Borrower;


(b)a Note for each Lender requesting a Note;


(c)the executed Guarantee Agreement from each Domestic Subsidiary that is not an Excluded Domestic Subsidiary;


(d)the executed Pledge Agreement from the Borrower and each Domestic Subsidiary (other than an Excluded Domestic Subsidiary) owning Equity Interests in a First-Tier Foreign Subsidiary; 


(e)favorable written opinions (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Akin Gump Strauss Hauer & Feld LLP, counsel for the Loan Parties and covering such matters relating to the Loan Parties, this Agreement or the Transactions as the Required Lenders shall reasonably request.  The Borrower hereby requests such counsel to deliver such opinion;


(f)such documents and certificates as the Administrative Agent may reasonably request relating to the organization, existence and good standing of the Loan Parties, the authorization of the Transactions and any other legal matters relating to the Loan Parties, this Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent;


(g)a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in paragraphs (i) and (ii) of Section 4.02;


(h)(i) satisfactory audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Borrower for the two most recent fiscal years ended prior to the Effective Date as to which such financial statements are available and (ii) satisfactory unaudited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows of the Borrower for each quarterly period ended subsequent to the date of the latest financial statements delivered pursuant to clause (i) of this Section 4.01(h) as to which such financial statements are available;





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(i)certificates representing 65% of the Equity Interests of the First-Tier Foreign Subsidiaries, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof;


(j)a Borrowing Request;


(k)projections for the Borrower and the Subsidiaries for fiscal year 2011 prepared by the Borrower in form and substance reasonably satisfactory to the Administrative Agent;


(l)evidence satisfactory to the Administrative Agent that all governmental and third party approvals necessary in connection with the Transactions and the continuing operations of the Borrower and the Subsidiaries have been obtained and are in full force and effect;


(m)evidence satisfactory to the Administrative Agent that all Indebtedness under that certain Amended and Restated Revolving Credit Agreement dated August 31, 2007, among the Borrower, the lenders party thereto and Comerica Bank, as administrative agent, has been paid in full, all commitments thereunder have been terminated and all liens related thereto have been released and terminated;


(n)evidence of liability and hazard insurance for each Loan Party in such amounts and on such terms as are standard and customary in the industry in which said entities conduct their operations;


(o)all information regarding the Borrower and the Subsidiaries that it is required to collect pursuant to the USA Patriot Act;


(p)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 Borrower hereunder; and


(q)such other documents or items as the Administrative Agent may reasonably request.


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


(i)The representations and warranties of the Borrower set forth in this Agreement shall be true and correct on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable (except that any representation or warranty which by its terms is made as of an earlier date shall be true and correct as of such earlier date).


(ii)At the time of and immediately after giving effect to such Borrowing or 



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the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, (i) no Default shall have occurred and be continuing and (ii) there shall have been no events that have, or could reasonably be expected to cause, a Material Adverse Effect since the date of the last such issuance or Borrowing.


(iii)The Borrower shall have delivered a Borrowing Request to the Administrative Agent in accordance with Section 2.03.


Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (i) and (ii) of this Section.


ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:
Section 5.01  Financial Statements and Other Information.  The Borrower will furnish to the Administrative Agent:
(a)within 90 days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by KPMG LLP or other independent public accountants of recognized national standing (without a “going concern” explanatory paragraph or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;


(b)within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;


(c)concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default 



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has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.10 (in the form of the compliance certificate attached hereto as Exhibit 5.01 (a “Compliance Certificate”)) and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;


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


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


Reports or financial information required to be delivered pursuant to Sections 5.01(a), 5.01(b) or 5.01(d) (to the extent any such financial statements, reports, proxy statements or other materials are included in materials otherwise filed with the Securities and Exchange Commission) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto, on the Borrower's website on the Internet or (ii) on which such documents are posted on the Borrower's behalf on an Internet or intranet site website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third party website or whether sponsored by the Administrative Agent); provided that, in each case, (a) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to furnish such paper copies until written notice to cease delivering such paper copies is given by the Administrative Agent or such Lender and (b) the Borrower shall, or shall cause a third party to, notify the Administrative Agent and each Lender (by email) of the posting of any such documents.  Notwithstanding anything to the contrary contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificate required by Section 5.01(c) to the Administrative Agent.  Except for such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining copies of such documents.
Section 5.02  Notices of Material Events.  The Borrower will furnish to the Administrative Agent prompt written notice of the following:
(i)the occurrence of any Default;


(ii)the filing or commencement of any action, suit or proceeding by or before 



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any arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof that could reasonably be expected to result in a Material Adverse Effect;


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


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


Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
Section 5.03  Existence; Conduct of Business.  The Borrower will, and will cause each Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business unless the failure to do so could not reasonably be expected to have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.
Section 5.04  Payment of Obligations.  Other than contractual obligations relating to Indebtedness, the Borrower will, and will cause each Subsidiary to, comply with its contractual obligations, including payment of its obligations, including Tax liabilities, with respect to which the failure of such compliance could result in a Material Adverse Effect, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to comply pending such contest could not reasonably be expected to result in a Material Adverse Effect.
Section 5.05  Maintenance of Properties.  The Borrower will, and will cause each Subsidiary to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.
Section 5.06  Books and Records; Inspection Rights.  The Borrower will, and will cause each Subsidiary to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.  The Borrower will, and will cause each Subsidiary to, permit any representatives designated by the Administrative Agent and, if a Default is then continuing, any Lender, upon reasonable prior notice and in compliance with the Borrower's security policy, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.  Notwithstanding Section 9.03, if no Default is then continuing or is discovered during such inspection, the Administrative Agent and the Lenders shall bear all costs and expenses associated with (i) any inspections in excess of one per calendar year and (ii) any inspections of properties outside of the 48 contiguous states of the United States.
Section 5.07  Compliance with Laws.  The Borrower will, and will cause each 



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Subsidiary to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, including, without limitation, Environmental Laws, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
Section 5.08  Use of Proceeds and Letters of Credit.  The proceeds of the Loans shall be used to repay existing Indebtedness, for working capital and for general corporate purposes (including, without limitation, Permitted Acquisitions) of, in each case, the Borrower and the Subsidiaries.  No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.  Letters of Credit will be issued only to support the general corporate purposes of the Borrower and the Subsidiaries. 
Section 5.09  Insurance.  The Borrower will, and will cause each Subsidiary to, maintain, with financially sound and reputable insurance companies, insurance in such amounts (with no greater risk retention) and against such risks as are customary among companies of established reputation engaged in the same or similar businesses and operating in the same or similar locations. The Borrower will furnish to the Lenders, upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained. 
Section 5.10  Required Guarantors; Additional Subsidiaries.  
(a)Subject to Section 5.10(b), the Borrower at all times shall cause all Domestic Subsidiaries other than Excluded Domestic Subsidiaries to be Guarantors.


(b)If any Domestic Subsidiary (other than an Excluded Domestic Subsidiary) is formed or acquired after the Effective Date, or if any Excluded Domestic Subsidiary ceases to be an Excluded Domestic Subsidiary, the Borrower will, within ten (10) Business Days, notify the Administrative Agent and the Lenders thereof and promptly but in no event later than twenty (20) Business Days after such event cause such Subsidiary to execute a Guarantee Agreement.  


(c)If any First-Tier Foreign Subsidiary is formed or acquired, or any Foreign Subsidiary becomes a First-Tier Foreign Subsidiary, after the Effective Date, the Borrower will, or will cause the applicable Domestic Subsidiary owning the Equity Interests in such Foreign Subsidiary, to execute a Pledge Agreement covering 65% of the Equity Interests in such First-Tier Foreign Subsidiary and deliver or cause to be delivered to the Administrative Agent certificates representing 65% of the Equity Interests in such First-Tier Foreign Subsidiary together with an undated stock power for such certificates executed in blank by a duly authorized officer of the Borrower or such Domestic Subsidiary, as applicable.


ARTICLE VI


Negative Covenants


Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower 



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covenants and agrees with the Lenders that: 
Section 6.01  Indebtedness Covenant.  The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:
(a)Indebtedness created under the Loan Documents;


(b)Indebtedness existing on the Effective Date and set forth on Schedule 6.01(b) hereto and amendments, extensions, renewals, refinancing, refundings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof;


(c)Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided, in the case of Indebtedness of any Foreign Subsidiary to any Loan Party, that no Default exists at the time, or is created as a result of, the incurrence of such Indebtedness;


(d)Indebtedness incurred to finance the acquisition, construction or improvement of any assets by a Loan Party, excluding Capital Lease Obligations, and any Indebtedness assumed in connection with the acquisition of any such assets by a Loan Party or secured by a Lien on any such asset prior to the acquisition thereof, and amendments, extensions, renewals, refinancings, refundings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) no Default exists at the time, or is created as a result of, the incurrence of such Indebtedness, (ii) at the time of such incurrence, the Pro Forma Financial Tests are satisfied and (iii) at the time of such incurrence, such Indebtedness, together with Indebtedness permitted under Section 6.01(e), does not exceed the greater of (x) ten percent (10%) of Tangible Assets of the Borrower and the Subsidiaries on a consolidated basis and (y) $50,000,000;


(e)Indebtedness of any Subsidiary in existence (but not incurred or created in connection with an acquisition) on the date on which such Subsidiary is acquired by the Borrower or a Subsidiary pursuant to a Permitted Acquisition, and amendments, extensions, renewals, refinancings, refundings and replacements of such Indebtedness that do not increase the outstanding principal amount thereof, provided that (i) neither the Borrower nor any of the Subsidiaries existing before giving effect to such acquisition has any obligation with respect to such Indebtedness, (ii) none of the properties of the Borrower or any of the Subsidiaries existing before giving effect to such acquisition is bound with respect to such Indebtedness and (iii) at the time of such incurrence, such Indebtedness, together with Indebtedness permitted under Section 6.01(d), does not exceed the greater of (x) ten percent (10%) of Tangible Assets of the Borrower and the Subsidiaries on a consolidated basis and (y) $50,000,000;


(f)Capital Lease Obligations; provided that (i) no Default exists at the time, or is created as a result of, the incurrence of such Indebtedness and (ii) at the time of such incurrence, the Pro Forma Financial Tests are satisfied;


(g)Indebtedness of the Borrower or any Subsidiary in respect of the financing of insurance premiums with providers of such insurance or their Affiliates in the ordinary course 



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of business; 


(h)Indebtedness arising from or representing deferred compensation to employees, directors and consultants of the Borrower or any Subsidiary incurred in the ordinary course of business; and 


(i)Unsecured Indebtedness of any Loan Party or First-Tier Foreign Subsidiary not permitted by any other clause of this Section 6.01; provided that (i) no Default exists at the time, or is created as a result of, the incurrence of such Indebtedness and (ii) at the time of such incurrence, the Pro Forma Financial Tests are satisfied.


Section 6.02  Lien Covenant.  The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it except:


(a)Permitted Encumbrances; 


(b)Any Lien on any property or asset of the Borrower or any Subsidiary existing on the Effective Date and set forth on Schedule 6.02(b); provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary (other than additions, accessions and improvements to such property or asset and proceeds covered by the original grant thereof) and (ii) such Lien shall secure only those obligations that it secures on the Effective Date and amendments, extensions, renewals, refinancings, refundings and replacements thereof as permitted under Section 6.01(b);


(c)Any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Effective Date prior to the time such Person becomes a Subsidiary and securing Indebtedness permitted under Section 6.01(d) or (e); provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary (other than additions, accessions and improvements to such property or asset and proceeds covered by the original grant thereof) and (iii) such Lien shall secure only those obligations that it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and amendments, extensions, renewals, refinancings, refundings and replacements thereof as permitted under Section 6.01(d) and (e); 


(d)Liens on assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such Liens secure permitted Indebtedness pursuant to Section 6.01(d) or (f), (ii) such Liens and the Indebtedness secured thereby (other than amendments, extensions, renewals, refinancings, refundings and replacements thereof as permitted under Section 6.01(d) and (f)) are incurred prior to or within 90 days (or such longer period if necessary solely to obtain any permits or licenses required in connection with such acquisition, construction or improvement) after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such Liens shall not apply to any other property 



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or assets of the Borrower or any Subsidiary (other than additions, accessions and improvements to such property or asset and proceeds covered by the original grant thereof);


(e)Liens arising in the ordinary course of business to secure obligations other than Indebtedness that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; 


(f)Liens that secure Indebtedness permitted under Section 6.01(g); 


(g)Liens described in clause (c) of the definition of “Liens” that are incurred in connection with Investments permitted under Section 6.04(i); and


(h)Liens in favor of the Administrative Agent under the Pledge Agreement.


Section 6.03  Limitation on Fundamental Changes; Lines of Business.  


(a)The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or a series of transactions) all or substantially all of its assets, or, in the case of any Loan Party or any First Tier Foreign Subsidiary, liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing:


(i)any Subsidiary may merge into or consolidate with the Borrower in a transaction in which the Borrower is the surviving corporation or sell, transfer, lease or otherwise dispose of all or substantially all of its assets to the Borrower; 


(ii)any Subsidiary may merge into or consolidate with or sell, transfer, lease or otherwise dispose of all or substantially all of its assets to any other Subsidiary in a transaction in which the surviving entity is a Subsidiary; 


(iii)any Subsidiary may merge with or into or consolidate with any other Person in a Permitted Acquisition; 


(iv)any Guarantor may liquidate or dissolve if its sole shareholders are Loan Parties and the assets of such Guarantor are transferred to one or more Loan Parties; 


(v)any First Tier Foreign Subsidiary may liquidate or dissolve if (i) its sole shareholders are Loan Parties, (ii) the assets of such Guarantor are transferred to a Loan Party and (iii) the Borrower, or the applicable Domestic Subsidiary owning the Equity Interests in such Foreign Subsidiary, complies with Section 5.10(c); and


(vi)any Subsidiary may merge or consolidate, or sell, transfer, lease or otherwise dispose of all or substantially all of its assets if such transaction is permitted under Section 6.05(f).





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(b)The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the types conducted by the Borrower and its Subsidiaries on the Effective Date and businesses reasonably related thereto.


Section 6.04  Restrictions on Investments, Loans, Advances, Guarantees and Acquisitions.  The Borrower will not, and will not permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interest, evidences of Indebtedness or securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, guarantee any obligations of, or make or permit to exist any other investment (each, an “Investment”) in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except:


(a)Permitted Investments;


(b)Investments existing on the Effective Date and set forth on Schedule 6.04(b);


(c)Investments by the Borrower or any Subsidiary in the Borrower or any Subsidiary; provided, in the case of Investments by any Loan Party in a Foreign Subsidiary, that no Default exists at the time of, or is created as a result of, such Investment; 


(d)Guarantees constituting permitted Indebtedness under Section 6.01;


(e)Permitted Acquisitions;


(f)Extensions of trade credit in the ordinary course of business;


(g)Loans and advances to employees of the Borrower or any Subsidiary in the ordinary course of business (including for travel and entertainment expenses) in an outstanding aggregate amount not to exceed $5,000,000 at any time; 


(h)Investments by the Borrower or any Subsidiary received in connection with the bankruptcy or reorganization of or settlement of, delinquent accounts and disputes with or judgments against, customers and suppliers, in each case in the ordinary course of business; and


(i)Investments not permitted by any other clause of this Section; provided that no Investment shall be made pursuant to this clause (i) that, together with all other Investments made pursuant to this clause (i) after the Effective Date, would exceed $25,000,000 in the aggregate at any time outstanding (in each case valued at the time such Investment is made). 


Section 6.05  Limitation on Asset Sales.  The Borrower will not, and will not permit any Subsidiary to, sell, transfer, lease or otherwise dispose of (each, a “disposition”) any asset, including any Equity Interest, owned by it, and including any assignment or sale of any income or revenues (including accounts receivable) or rights in respect thereof, nor will the 



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Borrower permit any of the Subsidiaries to issue any additional Equity Interest in such Subsidiary, except:


(a)dispositions of inventory and used or surplus equipment in the ordinary course of business;


(b)dispositions and issuances to the Borrower or any Subsidiary;


(c)dispositions in connection with sale-leaseback transactions with third parties on an arm's-length basis; 


(d)the issuance and sale of directors' qualifying shares and shares as required by applicable law to be held by a Person other than the Borrower or a Subsidiary; 


(e)dispositions of Permitted Investments; and


(f)dispositions of assets (other than accounts receivable or inventory) not otherwise permitted by any other clause of this Section so long as, after giving effect to any such disposition, the Borrower is in compliance with Section 6.10(c).


Section 6.06  Swap Agreements.  The Borrower will not, and will not permit any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks (including foreign exchange risks) to which the Borrower or any Subsidiary has actual exposure, and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.


Section 6.07  Limitations on Restricted Payments, Prepayments of Subordinated Indebtedness and Modifications of Subordinated Indebtedness.


(a)The Borrower will not, and will not permit any Subsidiary to, declare or make, or agree to make during the term hereof, directly or indirectly, any Restricted Payment to any Person other than a Loan Party unless the following conditions are satisfied: (i) no Default shall have occurred and be continuing or result from or, with respect to agreements to make Restricted Payments, reasonably be expected to result from, the making of such Restricted Payment and (ii) the Pro Forma Financial Tests are satisfied.  Notwithstanding the preceding sentence, (A) a Subsidiary that is not a Guarantor may declare and make and may agree to make Restricted Payments to any other Subsidiary that is not a Guarantor, (B) the Borrower and its Subsidiaries may declare and make and may agree to make the following Restricted Payments: (1) non-cash dividends, distributions and other payments in the form of, by conversion into, in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests and (2) the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interest held by any current or former employee, director or consultant of the Borrower or a Subsidiary (or any permitted transferee of the foregoing) pursuant to any management equity subscription agreement, stock option agreement, stock plan or similar agreement or upon the 



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exercise of any option, warrant, purchase right or other Equity Interest issued pursuant thereto, and (C) the Borrower and its Subsidiaries may agree to make a Restricted Payment if it is a condition precedent to such Restricted Payment that the Borrower terminate this Agreement and satisfy all Obligations.


(b)The Borrower will not, nor will it permit any Subsidiary to, make or agree to make, directly or indirectly, any payment (whether in cash, securities or other property) in respect of principal of or interest on any Indebtedness that is subordinated in right of payment to the Obligations, including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of such subordinated Indebtedness, except:


(i)regularly scheduled and other mandatory interest and principal payments on or after the due date therefor in respect of any such Indebtedness;


(ii)refinancings, renewals, refundings and replacements of such subordinated Indebtedness if any such new Indebtedness is (i) permitted under Section 6.01 and (ii) is subordinated in right of payment to the Obligations at least to the same extent in all material respects as the Indebtedness being refinanced, renewed, refunded or replaced;


(iii)the payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted hereunder;


(iv)the payment of Indebtedness of any Person acquired by the Borrower or any Subsidiary that exists on the date of such acquisition; provided that such Person becomes a Subsidiary as a result of such acquisition; 


(v)payments by the Borrower in the form of, by conversion into, in exchange for, or out of the concurrent sale of, Equity Interests; 


(vi)payments to the Borrower or a Subsidiary in respect of intercompany Indebtedness; 


(vii)any agreement to make a payment in respect of principal or interest on such subordinated Indebtedness if it is a condition precedent to such payment that the Borrower terminate this Agreement and satisfy all Obligations; and 


(viii)other prepayments of Indebtedness by the Borrower or any Subsidiary not permitted by any other clause of this Section 6.07; provided that no Default exists at the time after giving effect to such prepayment, and the Borrower has at least $100,000,000 of total liquidity, including (A) unrestricted cash, (B) Permitted Investments and (C) unused Commitments as of such date.


(c)The Borrower will not, and will not permit any Subsidiary to, amend, supplement or otherwise modify the terms of any Indebtedness that is subordinated in right of 



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payment to the Obligations to (i) accelerate the time of any scheduled or other mandatory payments in respect thereof, (ii) impair or reduce the subordination thereof, (iii) grant any collateral to secure such Indebtedness or (iv) increase the principal amount of, or interest on, such Indebtedness.


Section 6.08  Restrictions on Transactions with Affiliates.  The Borrower will not, and will not permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions in the ordinary course of business at prices and on terms and conditions not materially less favorable to the Borrower or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties, (b) transactions between or among the Borrower and the Subsidiaries not involving any other Affiliate of the Borrower to the extent such transactions are otherwise permitted hereunder, (c) any employment, consulting or similar agreement or other compensation agreement entered into by the Borrower or any Subsidiary in the ordinary course of business, (d) Investments in Affiliates permitted under Section 6.04(i) and (e) sales of Equity Interests in the Borrower to Affiliates of the Borrower and the granting of registration and other customary rights in connection therewith.


Section 6.09  Restrictions on Restrictive Agreements.  The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its properties or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to guarantee Indebtedness of the Borrower or any other Subsidiary that are, in each case in this clause (b), more restrictive than that which exists as of the Effective Date; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the Effective Date identified on Schedule 6.09 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or commitment if, after giving effect thereto, the restrictions or conditions would be materially more restrictive, individually or in the aggregate, than those existing on the Effective Date), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary or other assets pending such sale, provided such restrictions and conditions apply only to the Subsidiary or other asset that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured obligations permitted by this Agreement; provided that such restrictions or conditions apply only to the property or assets securing such obligations and (v) the foregoing shall not apply to (A) leases, licenses and other agreements entered into in the ordinary course of business (other than for Indebtedness); provided that such restrictions or conditions apply only to the property or assets that are the subject of such leases, licenses or other agreements, and (B) provisions in corporate charters, bylaws, stockholders agreements, partnership agreements, limited liability company agreements and similar agreements entered into in connection with Investments in less than wholly-owned Subsidiaries permitted by Section 6.04 and negotiated in good faith and not with the purpose of avoiding the restrictions of this Section.


Section 6.10  Financial Covenants.  



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(a)The Borrower will not permit the Leverage Ratio as of the last day of each fiscal quarter to be greater than 3.00 to 1.00.


(b)The Borrower will not permit the Interest Coverage Ratio as of the last day of each fiscal quarter to be less than 3.00 to 1.00.


(c)The Borrower will not permit the Total Required Assets at any time to be less than the sum of the total Credit Exposures at such time plus $100,000,000.  


Section 6.11  Fiscal Year.  The Borrower shall not change its fiscal year without the consent of the Administrative Agent.


ARTICLE VII


Events of Default


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


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


(c)any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any amendment or modification hereof or waiver hereunder, shall prove to have been incorrect when made or deemed made;


(d)the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, Section 5.03 (with respect to the Borrower's existence) or Section 5.08, Section 5.10 or in ARTICLE VI;


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


(f)the Borrower or any Subsidiary shall fail to make any payment (whether 



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of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to any applicable grace period;


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


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


(i)(A) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, or (v) make a general assignment for the benefit of creditors or (B) the board of directors (or similar governing body) of the Borrower or any Subsidiary shall adopt a resolution authorizing the Borrower or any Subsidiary to take any of the foregoing actions described in clause (i)(A);


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


(k)one or more judgments for the payment of money in an aggregate amount in excess of $15,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;


(l)an ERISA Event shall have occurred that when taken together with all other ERISA Events that have occurred or are continuing, could reasonably be expected to result in a Material Adverse Effect; or





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(m)a Change in Control shall occur;


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


ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein.  Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of the Subsidiaries 



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that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (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 to confirm receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.  Upon any such resignation, the Required Lenders shall have the right, with, if no Default is then continuing, the consent of the Borrower (not to be unreasonably withheld, delayed or conditioned), to appoint a successor.  If no successor shall have been so appointed by the Required Lenders (and, if applicable, consented to by the Borrower) and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a bank with an office in Houston, Texas, or an Affiliate of any such bank.  Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become 



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vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the Administrative Agent's resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
Section 9.01  Notices.  
(a)Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or electronic mail, as follows:  
(i)if to the Borrower, to it at 9725 Datapoint Drive, Suite 100, San Antonio, Texas 78229, Attention of Alan Schoenbaum, General Counsel (Phone No. (210) 447-4721; Telecopy No. (210) 447-4031; E-Mail Address aschoenb@rackspace.com);


(ii)if to the Administrative Agent, Issuing Bank or Swingline Lender, to JPMorgan Chase Bank, Loan and Agency Services Group, 10 South Dearborn, 19th Floor, Chicago, Illinois 60603-2003, Attention Yuvette Owens (Phone No. (312) 385-7021; Telecopy No. (888) 303-9732; E-Mail Address jpm.agency.servicing.1@jpmchase.com), and a copy to JPMorgan Chase Bank, 1020 NE Loop 410, Floor 1, San Antonio, Texas 78209, Attention Jennifer N. Wilkinson (Phone No. (210) 829-6170; Telecopy No. (210) 829-6109; E-Mail Address jennifer.n.wilkinson@chase.com); and 


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


(b)Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to ARTICLE 



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II unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.


(c)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.


Section 9.02  Waivers; Amendments; Release of Guarantors.
 
(a)No failure or delay by the Administrative 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 Administrative Agent, 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 Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank 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 Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase  the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender adversely affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) release any Guarantor or release all or substantially all of the collateral for the Loans without the consent of each Lender (other than Defaulting Lenders), (vi) change any provisions of Section 2.20 or the definition of “Defaulting Lender” without the consent of each Lender, or (vii) change any of the provisions of this Section or 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 no such agreement shall amend, 



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modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be.


(c)Notwithstanding any contrary position in this Agreement or any other Loan Document, if (a) a Guarantor is no longer a Subsidiary and (b) at the time such Guarantor became a non-Subsidiary, no Event of Default then existed, then such Guarantor shall be automatically released from its obligations under the Guarantee Agreement to which it is a party, without need for any formal action by the Administrative Agent or any Lender; and the Administrative Agent will confirm such release by a notice to the Borrower upon receipt of a request therefor.  


Section 9.03  Expenses; Indemnity; Damage Waiver.
  
(a)The Borrower shall pay (i) all reasonable out of pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the 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 or Letters of Credit issued hereunder, including all such out-of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.


(b)The Borrower shall indemnify the Administrative 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 fees, charges and disbursements of any counsel for any Indemnitee but, with respect to the expenses, fees, charges and disbursements described in subparagraphs (a)(i) and (a)(ii) of this Section, only to the extent reasonable, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any Subsidiary, or any Environmental Liability related in any way to the Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such 



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indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.


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


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


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


(f)The indemnification and reimbursement provisions contained herein with respect to fees of counsel shall be limited to one counsel for all Indemnitees, unless a conflict of interest exists among Indemnitees in which case each Indemnitee affected by such conflict of interest shall have separate counsel, the fees of which shall be reimbursed by the Borrower (except to the extent resulting from the gross negligence or willful misconduct of an Indemnitee.


WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED HEREUNDER SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS AND DAMAGES ARISING OUT OF OR RESULTING FROM THE ORDINARY, SOLE AND CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
Section 9.04  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 (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer 



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its 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 (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.


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


(A)the Borrower, provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender or, if an Event of Default has occurred and is continuing, any other assignee, provided further that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five Business Days after having received written notice thereof; 


(B)the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment to an assignee that is a Lender or an Affiliate of a Lender; and


(C)the Issuing Bank and Swingline Lender.


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


(A)except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender's Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $10,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default under clause (a), (b), (h) or (i) of ARTICLE VII has occurred and is continuing;


(B)each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement;  


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





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


(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement other than Section 9.12 (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 2.14, Section 2.15, Section 2.16 and Section 9.03; provided that such release shall not affect any legal responsibility for such Lender's actions and failures to act occurring before the effective date of such Assignment and Assumption).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.


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


(vi)  Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.04(c), Section 2.05(d), Section 2.05(e), Section 2.06(b), Section 2.17(d), or Section 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.



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(c)(i)  Any Lender may, without the consent of the Borrower, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “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 (A) such Lender's obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (C) the Borrower, 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 and (D) by its acceptance of such participation, such Participant shall be deemed to have consented to be bound by Section 9.12.  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 9.02(b) that affects such Participant.  Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Section 2.14, Section 2.15 and Section 2.16 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.17(c) as though it were a Lender.


(ii)  A Participant shall not be entitled to receive any greater payment under Section 2.14 or Section 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's express prior written consent and knowledge of the increased costs or Taxes associated with such Participant's participation.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.16(e) as though it were a Lender.


(d)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 without limitation any pledge or assignment to secure obligations 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 pledgee or assignee for such Lender as a party hereto.


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



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Bank 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 or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Section 2.14, Section 2.15, Section 2.16, Section 9.03, Section 9.12 and ARTICLE VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.


Section 9.06  Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which may be delivered by electronic or telecopy transmission and each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  The Loan Documents and any 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.  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.


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


Section 9.08  Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, but excluding deposits held in a fiduciary capacity for a third party) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured; provided that any Lender or Affiliate thereof exercising rights under this Section shall use commercially reasonable efforts to notify the Borrower promptly after exercising such rights; provided, further that the failure to give such notice shall not affect such exercise of rights or any other rights of the Lenders and their Affiliates under this Section.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.


Section 9.09  Governing Law; Jurisdiction; Consent to Service of Process.  



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


(b)The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the District Courts of the State of Texas sitting in Houston, Harris County, Texas and of the United States District Court of the Southern District of Texas, 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 Texas State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against the Borrower or its properties in the courts of any jurisdiction.


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


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


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


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


Section 9.12  Confidentiality.  Each of the Administrative Agent, the Issuing 



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Bank and the Lenders 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 advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (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 pledgee referred to in Section 9.04(d), or (iii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower.  For the purposes of this Section, “Information” means all information received from the Borrower or any of its Related Parties relating to the Borrower, the Subsidiaries or their business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the Effective Date, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.


Section 9.13  Interest Rate Limitation.  Notwithstanding anything herein to the contrary, in no event whatsoever shall the amount contracted for, charged, paid or otherwise agreed to be paid to or received by the Agent or any Lender for the use, forbearance or detention of money under this Agreement or any other Loan Document or otherwise exceed the maximum non‐usurious rate pursuant to applicable law (the “Maximum Rate”), and 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 Rate, 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.  Anything in this Agreement or any other Loan Document to the contrary notwithstanding, the Borrower shall not be required to pay unearned interest and shall never be required to pay interest at a rate in excess of the Maximum Rate, and if the effective rate of interest which would otherwise be payable under this Agreement and the other Loan Documents would exceed the Maximum Rate, or if the Administrative Agent or any Lender shall receive any unearned interest or shall receive 



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monies that are deemed to constitute interest which would increase the effective rate of interest payable by the Borrower under this Agreement or any other Loan Document to a rate in excess of the Maximum Rate, then (a) the amount of interest which would otherwise be payable by the Borrower under this Agreement or any other Loan Document shall be reduced to the amount allowed under applicable law, and (b) any unearned interest paid by the Borrower or any interest paid by the Borrower in excess of the Maximum Rate shall be credited on the principal of the Loans (or, if the principal amount shall have been paid in full, refunded to the Borrower).  It is further agreed that, without limitation of the foregoing, all calculations of the rate of interest contracted for, charged or received by any Lender under this Agreement or any other Loan Document, are made for the purpose of determining whether such rate exceeds the Maximum Rate, and shall be made by amortizing, prorating and spreading in equal parts during the period of the full stated term of the Loans evidenced by said Notes all interest at any time contracted for, charged or received by such  Lender in connection therewith.   


Section 9.14  USA Patriot Act.  Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”) hereby notifies the Borrower that pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Patriot Act.


Section 9.15  FINAL AGREEMENT OF THE PARTIES.  THIS WRITTEN AGREEMENT (INCLUDING THE EXHIBITS AND SCHEDULES HERETO) AND THE OTHER LOAN DOCUMENTS CONSTITUTE A “LOAN AGREEMENT” AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF.  Any previous agreement among the parties with respect to the subject matter hereof is superseded by this Agreement.  Other than Section 9.03, nothing in this Agreement, expressed or implied, is intended to confer upon any party other than the parties hereto any rights, remedies, obligations or liabilities under or by reason of this Agreement.


[END OF TEXT]







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


By:  /s/ Alan Schoenbaum                             
       Alan Schoenbaum
Senior Vice President, General Counsel and Secretary



Signature Page to Credit Agreement








ADMINISTRATIVE AGENT,     JPMORGAN CHASE BANK, N.A.
ISSUING BANK, SWINGLINE    
LENDER AND LENDER:    By:   /s/ Jennifer N. Wilkinson
Jennifer N. Wilkinson
Senior Vice President



Signature Page to Credit Agreement








SYNDICATION AGENT AND     BARCLAYS BANK plc
LENDER    
By:       /s/ Mark Thompson   
Name:  Mark Thompson        
Title:    Authorized Signatory 
 

Signature Page to Credit Agreement








CO-DOCUMENTATION AGENT    REGIONS BANK
AND LENDER:    
By:       /s/ Donna Day          
Name:  Donna Day                
Title:    Senior Vice President
 





Signature Page to Credit Agreement








CO-DOCUMENTATION AGENT    WELLS FARGO BANK, N.A.
AND LENDER:    
By:       /s/ Terry L. Witte       
Name:  Terry L. Witte            
Title:    Senior Vice President
 

Signature Page to Credit Agreement






LENDER:    BANK OF AMERICA, N.A.
    
By:       /s/ Sugeet Manchanda Madan 
Name:  Sugeet Manchanda Madan      
Title:    Director                                   
 

Signature Page to Credit Agreement






LENDER:    THE FROST NATIONAL BANK
    
By:       /s/ Suzanne Peterson                      
Name:  Suzanne Peterson                           
Title:    Market President - Alamo Heights 
 























Signature Page to Credit Agreement






LENDER:    COMERICA BANK
    
By:       /s/ Tim J. Klitch                
Name:  Tim J. Klitch                     
Title:    Senior Vice President        
 



Signature Page to Credit Agreement






EXHIBIT 1.01A
COMMITMENT INCREASE AGREEMENT
This Commitment Increase Agreement (this “Agreement”), dated as of [________________], 201__, is among Rackspace Hosting, Inc. (the “Borrower”), JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent (the “Agent”) under the Credit Agreement described below, and [_____________] (the “Increasing Lender”).  Capitalized terms used herein without definition have the meanings assigned to such terms in the Credit Agreement.
PRELIMINARY STATEMENTS
A.    Pursuant to Section 2.19 of the Revolving Credit Agreement dated as of September 23, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among the Borrower, the Lenders from time to time party thereto, and the Agent, the Borrower has the right, subject to the terms and conditions thereof, to effectuate from time to time an increase in the total Commitments under the Credit Agreement by agreeing with a Lender to increase that Lender's Commitment.
B.    The Borrower has given notice to the Agent of its intention to increase the total Commitments pursuant to such Section 2.19 by increasing the Commitment of the Increasing Lender from $________ to $_________, (Amount of increase must be at least $10,000,000.).
Accordingly, the parties hereto agree as follows:
SECTION 1.    Increase of Commitment.  Pursuant to Section 2.19 of the Credit Agreement, the Commitment of the Increasing Lender is hereby increased from $_____________ to _____________. (Amount of increase must be at least $10,000,000.)
SECTION 2.    Increasing Lender Credit Decision.  The Increasing Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in Section 5.01 of the Credit Agreement and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and to agree to the various matters set forth herein.  The Increasing Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement.
SECTION 3.    Representation and Warranties of the Borrower.  The Borrower represents and warrants as follows:
(a)    The execution, delivery and performance by the Borrower of this Agreement are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action on the part of the Borrower and do not contravene (i) the Borrower's articles of incorporation or by-laws or (ii) any indenture, agreement or other instrument binding on the Borrower, except in the case of clause (ii), as could not reasonably be expected to result in a Material Adverse Effect.
(b)    No authorization, consent or approval of any Governmental Authority is required for the valid execution, delivery and performance by the Borrower of this Agreement.
(c)    This Agreement constitutes a valid and binding agreement of the Borrower, 





enforceable against the Borrower in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and equitable principles of general applicability.
(d)    The aggregate amount of the Commitments under the Credit Agreement, including any increases pursuant to Section 2.19 thereof, does not exceed $400,000,000.
(e)    No Default has occurred and is continuing.
SECTION 4.    Representations and Warranties of the Guarantors.  Each Guarantor represents and warrants as follows:
(a)    The execution, delivery and performance by it of this Agreement are within its corporate or organizational powers, have been duly authorized by all necessary corporate action and do not contravene (i) its articles of incorporation or by-laws or certificate of formation or operating agreement or limited partnership agreement, as applicable, or (ii) any indenture, agreement or other instrument binding on such Guarantor, except in the case of clause (ii), as could not reasonably be expected to result in a Material Adverse Effect.
(b)    No authorization, consent or approval of any Governmental Authority is required for the valid execution, delivery and performance by such Guarantor of this Agreement.
(c)    This Agreement constitutes its valid and binding agreement, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and equitable principles of general applicability.
(d)    No Default has occurred and is continuing.
SECTION 5.    Expenses.  The Borrower agrees to pay on demand all reasonable costs and expenses of the Agent in connection with the preparation, negotiation, execution and delivery of this Agreement, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent with respect thereto.
SECTION 6.     Effectiveness.  This Agreement shall become effective upon the receipt by the Agent of the following:
(a)    counterparts of this Agreement executed by the Borrower, the Agent and the Increasing Lender; and
(b)    a certified copy of corporate resolutions of the Borrower authorizing the increase in the Commitments.
SECTION 7.    Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas.
SECTION 8.    Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which may be delivered in original or facsimile form and when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
[Signatures on following page]





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


RACKSPACE HOSTING, INC.
By:        
Name:        
Title:        




GUARANTORS:


[NAMES OF GUARANTORS]




By:        
Name:        
Title:        




AGENT:


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




By:        
Name:        
Title:        




INCREASING LENDER:


[NAME OF INCREASING LENDER]




By:        
Name:        
Title:        





EXHIBIT 1.01B
FORM OF 
GUARANTEE AGREEMENT


THIS GUARANTEE AGREEMENT (this “Guarantee”) dated as of September 23, 2011, made by each of the undersigned Subsidiaries of the Borrower (as defined below) (each, a “Guarantor,” and collectively, the “Guarantors”), in favor of JPMorgan Chase Bank, N.A. as Administrative Agent (the “Agent”) for the benefit of the Lenders pursuant to that certain Revolving Credit Agreement dated as of even date herewith (as amended, modified and supplemented from time to time, the “Credit Agreement”), by and among the Borrower, the Agent and the Lenders.
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to make Loans and other extensions of credit to Rackspace Hosting, Inc., a Delaware corporation (the “Borrower”) in a manner and upon the terms and conditions set forth therein;
WHEREAS, in accordance with the Credit Agreement, the Agent requires that the Guarantors execute a guarantee agreement guaranteeing the obligations of the Borrower under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and agreements herein and in order to induce the Lenders to make the Loans and other extensions of credit pursuant to the Credit Agreement, the Guarantors hereby agree as follows:
Section 1.    Definitions.  Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned thereto in the Credit Agreement.  
Section 2.    Guarantee of Payment.  Each Guarantor (not merely as a surety or guarantor of collection) hereby jointly, severally, unconditionally and irrevocably, guarantees the punctual payment and performance when due, whether at stated maturity, as an installment, by prepayment or by demand, acceleration or otherwise, of all Obligations of the Borrower heretofore or hereafter existing.  If any or all of the Obligations become due and payable under the Credit Agreement, the Guarantors jointly and severally and unconditionally promise to pay such Obligations, on demand, together with any and all expenses (including reasonable counsel fees and expenses), which may be incurred by the Agent in collecting any of the Obligations and in connection with the protection, defense and enforcement of any rights under the Credit Agreement or under any other Loan Document (the “Expenses”).  The Guarantors guarantee that the Obligations shall be paid strictly in accordance with the terms of the Credit Agreement.  The Obligations include, without limitation, interest accruing after the commencement of a proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at the rate or rates provided in the Credit Agreement.  The Agent shall not be required to exhaust any right or remedy or take any action against the Borrower or any other Person or any collateral prior to any demand or other action hereunder against the Guarantors.  The Guarantors agree that, as between the Guarantors and the Agent, the Obligations may be declared to be due and payable for the purposes of this Guarantee at any time when the Loans may be declared due under Article VII of the Credit Agreement, notwithstanding any stay, injunction or other prohibition which may prevent, delay or vitiate any declaration as regards the Borrower and that in the event of a declaration or attempted declaration, the Obligations shall immediately become due and payable by the Guarantors for the purposes of this Guarantee and each Guarantor shall forthwith pay the Obligations specified by the Agent to be paid as provided in the Credit Agreement without further notice or demand.  Notwithstanding anything contained herein or in the Credit Agreement, any Loan Document or any other document or any other agreement, 





security document or instrument relating hereto or thereto to the contrary, the maximum liability of each Guarantor hereunder shall never exceed the maximum amount that said Guarantor could pay without having such payment set aside as a fraudulent transfer or fraudulent conveyance or similar action under the U.S. Bankruptcy Code or applicable state or foreign law.
Section 3.    Guarantee Absolute.  The liability of each Guarantor under this Guarantee is absolute and unconditional irrespective of:  (a) any change in the time, manner or place of payment of, or in any other term of, the Credit Agreement or the Obligations, or any other amendment or waiver of or any consent to departure from any of the terms of the Credit Agreement or the Obligations, including any increase or decrease in the rate of interest thereon; (b) any release or amendment or waiver of, or consent to departure from, any other guarantee or support document, or any exchange, release or non‐perfection of any collateral, for the Credit Agreement or the Obligations; (c) any present or future law, regulation or order of any jurisdiction or of any agency thereof purporting to reduce, amend, restructure or otherwise affect any term of the Credit Agreement or the Obligations; (d) without being limited by the foregoing, any lack of validity or enforceability of the Credit Agreement or the Obligations; (e) any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Credit Agreement or the transactions contemplated thereby which might constitute a legal or equitable defense available to, or discharge of, the Borrower or other Guarantors and (f) any claim or assertion that any payment by any Guarantor hereunder should be set aside pursuant to Section 2 in connection with any stay, injunction or other prohibition or event, in which case each Guarantor shall be unconditionally required to pay all amounts demanded of it hereunder prior to any determination of the maximum liability of each Guarantor hereunder in accordance with Section 2 and the recipient of such payment, if so required by a final non-appealable court of competent jurisdiction by a final and non-appealable judgment, shall then be liable for the refund of any excess amounts.  If any such rebate or refund is ever required, all other Guarantors shall be fully liable for the repayment thereof to the maximum extent allowed by applicable law.
Section 4.    Guarantee Irrevocable.  This Guarantee is a continuing guarantee of the payment of all Obligations now or hereafter existing under the Credit Agreement and shall remain in full force and effect until payment in full of all Obligations and other amounts payable under this Guarantee and until all Commitments of the Lenders to make Loans under the Credit Agreement shall be terminated in accordance with the terms thereof and the Credit Agreement is no longer in effect.
Section 5.    Reinstatement.  This Guarantee shall continue to be effective, or be automatically reinstated, as the case may be, if at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the Agent on the insolvency, bankruptcy, dissolution, liquidation or reorganization of any of the Borrower, any Guarantor, or any Person that is a party to the Loan Documents, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to any of the Borrower, any Guarantor or any other Person that is a party to the Loan Documents, or otherwise, all as though the payment had not been made.  
Section 6.    Subrogation.  Each Guarantor hereby agrees that it shall not exercise any rights which it may acquire by way of subrogation, by any payment made under this Guarantee or otherwise, until all the Obligations have been paid in full and the Credit Agreement is no longer in effect.  Any amounts paid to a Guarantor on account of subrogation rights under this Guarantee at any time when all the Obligations have not been paid in full, shall be held in trust for the benefit of the Agent and shall promptly be paid to the Agent to be credited and applied to the Obligations, whether matured or unmatured or absolute or contingent, in accordance with the terms of the Credit Agreement.  If a Guarantor has made a payment to the Agent hereunder of all or any part of the Obligations and all the Obligations are paid in full (other than unasserted indemnity obligations) and the Commitments have been terminated, the Agent shall, at such Guarantor's request, execute and deliver to the Guarantor the appropriate documents, without recourse and without representation or 





warranty, necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting from the payment.
Section 7.    Subordination.  Any liabilities owed by the Borrower to the Guarantors in connection with any extension of credit or financial accommodation by the Guarantors to or for the account of the Borrower, including but not limited to interest accruing at the agreed contract rate after the commencement of a bankruptcy or similar proceeding, are hereby subordinated to the Obligations, and such liabilities of the Borrower to the Guarantors, if the Agent so requests, shall be collected, enforced and received by the Guarantors as trustee for the Agent and shall be paid over to the Agent on account of the Obligations.
Section 8.    Certain Taxes.  The Guarantors further agree that all payments to be made hereunder shall be made without setoff or counterclaim and free and clear of, and without deduction for Indemnified Taxes or Other Taxes.  If any Indemnified Taxes or Other Taxes are required to be withheld from any amounts payable to the Agent hereunder, the amounts so payable to the Agent shall be increased to the extent necessary to yield to the Agent (after payment of all Indemnified Taxes or Other Taxes) the amounts payable hereunder in the full amounts so to be paid.  Whenever any Indemnified Tax or Other Tax is paid by a Guarantor, as promptly as possible thereafter, such Guarantor shall send the Agent evidence of payment thereof, together with such additional documentary evidence as may be reasonably required from time to time by the Agent.
Section 9.    Representations and Warranties.  Each of the Guarantors represents and warrants that:  (a) this Guarantee (i) has been authorized by all necessary action; (ii) does not violate any agreement, instrument, law, regulation or order applicable to it; (iii) does not require the consent or approval of any Person, or any filing or registration of any kind; and (iv) is the legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, except to the extent that enforcement may be limited by applicable bankruptcy, insolvency and other similar laws affecting creditors' rights generally; and (b) in executing and delivering this Guarantee, such Guarantor has not relied and will not rely upon any representations or warranties of the Agent not embodied herein or any acts heretofore or hereafter taken by the Agent (including but not limited to any review by the Agent of the affairs of the Borrower).
Section 10.    Remedies Generally.  The remedies provided in this Guarantee are cumulative and not exclusive of any remedies provided by law.
Section 11.    Setoff.  Each Guarantor agrees that, in addition to (and without limitation of) any right of setoff, banker's lien or counterclaim the Agent or the Lenders may otherwise have, the Agent and each of the Lenders shall be entitled, at their option, if an Event of Default shall have occurred and be continuing, to offset balances (general or special, time or demand, provisional or final, but excluding deposits held in a fiduciary capacity for a third party) held by them for the accounts of the Guarantors at any of the Agent's or any Lender's offices, in U.S. dollars or in any other currency, against any amount payable by the Guarantors under this Guarantee which is not paid when due, in which case it shall promptly notify the Guarantors thereof; provided that the Agent's or any Lender's failure to give such notice shall not affect the validity thereof.
Section 12.    Formalities.  Each Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations, the Credit Agreement and this Guarantee and any liability to which the Credit Agreement and this Guarantee applies or may apply, and waives presentment, demand of payment, notice of intent to accelerate, notice of acceleration, notice of dishonor or nonpayment, and any requirement that the Agent institute suit, collection proceedings or take any other action to collect the Obligations, including any requirement that the Agent protect, secure, perfect or insure any security interest or Lien against any property subject thereto or exhaust any right or take any 





action against the Borrower or any other Person (including the other Guarantors) or any collateral (it being the intention of the Agent and each Guarantor that the obligations of such Guarantor under this Guarantee are to be a guarantee of payment and not of collection) or that the Borrower or any other Person (including the other Guarantors) be joined in any action hereunder.  Each Guarantor hereby waives marshaling of assets and liabilities, notice by the Agent of the creation of any Indebtedness or liability to which it applies or may apply, notice of disposition or substitution of collateral and of the creation, advancement, increase, existence, extension, renewal, rearrangement and/or modification of the Obligations.
Section 13.    Amendments and Waivers.  No amendment or waiver of any provision of this Guarantee, nor consent to any release by any Guarantor therefrom, shall be effective unless it is in writing and signed by the Agent and such Guarantor, and then the waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  No failure on the part of the Agent to exercise, and no delay in exercising, any right under this Guarantee shall operate as a waiver or preclude any other or further exercise thereof or the exercise of any other right.
Section 14.    Expenses.  The Guarantors shall reimburse the Agent on demand for all Expenses without duplication of any reimbursements effected under the Credit Agreement.  The obligations of the Guarantors under this Section shall survive the termination of this Guarantee.
Section 15.    Assignment.  This Guarantee shall be binding on, and shall inure to the benefit of the Guarantors, the Agent and their respective successors and assigns; provided that the Guarantors may not assign or transfer their respective rights or obligations under this Guarantee.  Without limiting the generality of the foregoing:  (a) the obligations of the Guarantors under this Guarantee shall continue in full force and effect and shall be binding on any successor partnership and on previous partners and their respective estates if any of the Guarantors is a partnership, regardless of any change in the partnership as a result of death, retirement or otherwise; and (b) the Agent may assign, or otherwise transfer its rights under the Credit Agreement to any other Person in accordance with the terms and conditions thereof, and the other Person shall then become vested with all the rights granted to the Agent in this Guarantee.  Any Guarantor may merge into the Borrower or another Guarantor as provided in the Credit Agreement.
Section 16.    Captions.  The headings and captions in this Guarantee are for convenience only and shall not affect the interpretation or construction of this Guarantee.
Section 17.    Governing Law, Etc.  THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS.  EACH GUARANTOR CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN THE CITY OF HOUSTON.  SERVICE OF PROCESS BY THE AGENT IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON EACH GUARANTOR IF SENT TO SUCH GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS OTHERWISE SPECIFIED BY SUCH GUARANTOR FROM TIME TO TIME.  EACH GUARANTOR WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL IN ANY ACTION RELATED TO THIS GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED TO THIS GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY SUCH ACTION.  TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), EACH SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTEE.
Section 18.    Integration; Effectiveness.  This Guarantee alone sets forth the entire understanding 





of the Guarantors and the Agent relating to the guarantee of the Obligations and constitutes the entire contract between the parties relating to the subject matter hereof and supersedes any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  This Guarantee shall become effective when it shall have been executed and delivered by the Guarantors to the Agent.  Delivery of an executed signature page of this Guarantee by telecopy shall be effective as delivery of a manually executed signature page of this Guarantee.
Section 19.    Automatic Release.  As provided in Section 9.02 of the Credit Agreement, a Guarantor shall be automatically released from its obligations under this Guarantee upon the satisfaction of the conditions set forth therein.
END OF TEXT









EXHIBIT 1.01C
FORM OF
NEW LENDER AGREEMENT
This New Lender Agreement (this “Agreement”), dated as of [________________], 201__, is among Rackspace Hosting, Inc. (the “Borrower”), JPMorgan Chase Bank, N.A., in its capacity as Administrative Agent (the “Agent”) under the Credit Agreement described below, and [_____________] (the “New Lender”).  Capitalized terms used herein without definition have the meanings assigned to such terms in the Credit Agreement.
PRELIMINARY STATEMENTS
A.    Pursuant to Section 2.19 of the Revolving Credit Agreement dated as of September 23, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) among the Borrower, the Lenders from time to time party thereto, and the Agent, the Borrower has the right, subject to the terms and conditions thereof, to effectuate from time to time an increase in the total Commitments under the Credit Agreement by offering to the Lenders and additional banks and financial institutions the opportunity to participate in all or a portion of the increased Commitments.
B.    The Borrower has given notice to the Agent of its intention to increase the total Commitments pursuant to such Section 2.19 by $[________] Must be at least $10,000,000..
C.    The New Lender desires to become a Lender under the Credit Agreement and extend Revolving Loans to the Borrower in accordance with the terms thereof.
Accordingly, the parties hereto agree as follows:
SECTION 1.    Loan Documents.  The New Lender hereby acknowledges receipt of copies of the Credit Agreement and the other Loan Documents.
SECTION 2.    Joinder to Credit Agreement. By executing and delivering this Agreement, the New Lender hereby agrees (i) to become a party to the Credit Agreement as a Lender as defined therein for all purposes and to the same extent as if originally a party thereto and (ii) to be bound by all the terms, conditions, representations, and warranties of the Credit Agreement and the other Loan Documents applicable to the Lenders, and all references to the Lenders in the Loan Documents shall be deemed to include the New Lender.  Without limiting the generality of the foregoing, the New Lender hereby agrees to make Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not exceed its Commitment.  The Commitment of the New Lender shall be $[________] Must be at least $10,000,000..  
SECTION 3.    New Lender Credit Decision.  The New Lender acknowledges that it has, independently and without reliance upon the Agent or any other Lender and based on the financial statements referred to in Section 5.01 of the Credit Agreement and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and to agree to the various matters set forth herein.  The New Lender also acknowledges that it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement.
SECTION 4.    Consent.  The Agent hereby consents to the New Lender being a Lender.





SECTION 5.    Representation and Warranties of the Borrower.  The Borrower represents and warrants as follows:
(a)    The execution, delivery and performance by the Borrower of this Agreement are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action on the part of the Borrower and do not contravene (i) the Borrower's articles of incorporation or by-laws or (ii) any indenture, agreement or other instrument binding on the Borrower, except in the case of clause (ii), as could not reasonably be expected to result in a Material Adverse Effect.
(b)    No authorization, consent or approval of any Governmental Authority is required for the valid execution, delivery and performance by the Borrower of this Agreement.
(c)    This Agreement constitutes a valid and binding agreement of the Borrower, enforceable against the Borrower in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and equitable principles of general applicability.
(d)    The aggregate amount of the Commitments under the Credit Agreement, including any increases pursuant to Section 2.19 thereof, does not exceed $400,000,000.
(e)    No Default has occurred and is continuing.
SECTION 6.    Representations and Warranties of the Guarantors.  Each Guarantor represents and warrants as follows:
(a)    The execution, delivery and performance by it of this Agreement are within its corporate or organizational powers, have been duly authorized by all necessary corporate action and do not contravene (i) its articles of incorporation or by-laws or certificate of formation or operating agreement or limited partnership agreement, as applicable, or (ii) any indenture, agreement or other instrument binding on such Guarantor, except in the case of clause (ii), as could not reasonably be expected to result in a Material Adverse Effect.
(b)    No authorization, consent or approval of any Governmental Authority is required for the valid execution, delivery and performance by such Guarantor of this Agreement.
(c)    This Agreement constitutes its valid and binding agreement, enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and equitable principles of general applicability.
(d)    No Default has occurred and is continuing.
SECTION 7.    Expenses.  The Borrower shall pay on demand all reasonable costs and expenses of the Agent in connection with the preparation, negotiation, execution and delivery of this Agreement, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent with respect thereto.
SECTION 8.    Effectiveness.  This Agreement shall become effective upon the receipt by the Agent of the following:
(a)    counterparts of this Agreement executed by the Borrower, the Agent and the New Lender;





(b)    information as to addresses for notice, lending offices and similar items regarding the New Lender as reasonably requested by the Agent; and
(c)    a certified copy of corporate resolutions of the Borrower authorizing the increase in the Commitments.
SECTION 9.    Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Texas without regard to any choice of law provision that would require the application of the law of another jurisdiction.
SECTION 10.    Execution in Counterparts.  This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts and may be delivered in original, facsimile or electronic form, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
[Signatures on following page]





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


RACKSPACE HOSTING, INC.
By:        
Name:        
Title:        




GUARANTORS:


[NAMES OF GUARANTORS]




By:        
Name:        
Title:        




AGENT:


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




By:        
Name:        
Title:        




NEW LENDER:


[NAME OF NEW LENDER]




By:        
Name:        
Title:        









EXHIBIT 1.01D
FORM OF NOTE
$[____________]    ____________________, 2011


FOR VALUE RECEIVED, the undersigned, Rackspace Hosting, Inc., a Delaware corporation, the Borrower under that certain Revolving Credit Agreement, dated as of September 23, 2011 (as may be amended or otherwise modified from time to time, the “Credit Agreement”), among the Borrower, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Agent for the Lenders, HEREBY PROMISES TO PAY to [_______________________] (the “Lender”), the amount as may be advanced from time to time under the Credit Agreement by the Lender in accordance with such Lender's Commitment outstanding from time to time.  All capitalized terms used herein and not otherwise defined shall have the meanings as defined in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of this Note outstanding from time to time at the place and at such times and at such interest rates as are specified in the Credit Agreement.  Payments made by the Borrower in respect of the amounts due hereunder shall be allocated to the Lender by the Agent on the terms specified in the Credit Agreement.
This Note is one of the Notes in respect of the Loans referred to in, and this Note and all provisions herein are entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things, (a) provides for the making of Loans by the Lender and other Lenders to the Borrower from time to time, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events, for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified, and for limitations on the amount of interest paid such that no provision of the Credit Agreement or this Note shall require the payment or permit the collection of interest in excess of the Maximum Rate.
The Borrower and any and all endorsers, guarantors and sureties severally waive grace (except to the extent expressly provided in the Credit Agreement), demand, presentment for payment, notice of dishonor or default, notice of acceleration, notice of intent to accelerate, protest and notice of protest and diligence in collecting and bringing of suit against any party hereto, and agree to all renewals, extensions or partial payments hereon and to any release or substitution of security herefor, in whole or in part, with or without notice, before or after maturity.
This Note shall be governed by and construed under the laws of the State of Texas.
IN WITNESS WHEREOF, the undersigned has caused this Note to be duly executed and delivered by its duly authorized officer as of the date first written above.
BORROWER:
RACKSPACE HOSTING, INC.,
a Delaware corporation 




By:        
Name:        
Title:        





EXHIBIT 2.03
FORM OF BORROWING REQUEST


JPMorgan Chase Bank, N.A.
    
    
    
Attention:    
Telecopy:    


		
	Re:
	Revolving Credit Agreement dated as of September 23, 2011, by and among Rackspace Hosting, Inc. (the “Borrower”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent


Ladies and Gentlemen:
Pursuant to the Credit Agreement, the Borrower hereby makes the requests indicated below:
	
			
	 
	1
	Amount of Borrowing:  ______________

	 
	2
	Requested date of Borrowing:  ___________________

	 
	3
	Type of Borrowing:


_________ ABR Borrowing; or


_________ Eurodollar Borrowing;

	 
	4
	Requested Interest Period for Eurodollar Borrowing:
[one] [three] [six] months

	 
	5
	Location and number of account to which funds are to be disbursed:


___________________


___________________






The undersigned certifies that [s]he is authorized to execute this request on behalf of the Borrower.  The Borrower represents and warrants that:
		
	(a)
	at the time of any immediately after giving effect to the requested Borrowing, (i) no Default or Event of Default shall have occurred and be continuing and (ii) there shall have been no events that have, or could reasonably be expected to cause, a Material Adverse Effect since the date of the last Borrowing;


		
	(b)
	the representations and warranties of the Borrower set forth in the Credit Agreement shall be true and correct on and as of the date of the requested Borrowing (except that any representation or warranty which by its terms is made as of an earlier date shall be true and correct as of such earlier date); and


		
	(c)
	after giving effect to the requested Borrowing, the Borrower shall be in compliance with Section 6.10(c) of the Credit Agreement.  Calculations for such covenant are set forth on Schedule I attached hereto.







Each capitalized term used but not defined herein shall have the meaning assigned to such term in the Credit Agreement.
Very truly yours,


RACKSPACE HOSTING, INC.






By:        
Name:        
Title:        





SCHEDULE I


CALCULATION WORKSHEET FOR SECTION 6.10(C)


	
			
	 
	Pro Forma Calculation
	Covenant Requirement

	Total Required Assets:
	 
	> total Credit Exposures plus $100,000,000

	(i)Tangible Assets of the Borrower
	 
	 

	Minus the sum of:
	 
	 

	(i)Tangible Assets of Subsidiaries that are not Guarantors
	 
	 

	(ii)Restricted cash of the Loan Parties
	 
	 

	and
	 
	 

	(iii)Book value of the Capital Lease Obligations of the Loan Parties
	 
	 






Calculation of Tangible Assets (for the Borrower on a consolidated basis)
total assets;
$________________
Minus the sum of the following:
(i)    intangible assets; and
$________________
(ii)    goodwill.
$________________
Equals Tangible Assets for the Borrower on a consolidated basis
$_________________


Calculation of Tangible Assets (for Subsidiaries that are not Guarantors)
total assets;
$________________
Minus the sum of the following:
(i)    intangible assets; and
$________________
(ii)    goodwill.
$________________
Equals Tangible Assets for Subsidiaries that are not Guarantors
$_________________











EXHIBIT 2.07
FORM OF INTEREST ELECTION REQUEST


JPMorgan Chase Bank, N.A.
    
        
Attention:    
Telecopy:    




		
	Re:
	Revolving Credit Agreement dated as of September 23, 2011, by and among Rackspace Hosting, Inc. (the “Borrower”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent


Ladies and Gentlemen:
Pursuant to the Credit Agreement, the Borrower hereby makes the requests indicated below:
1.    The Borrowing to which this Interest Election Request applies is as follows:
		
	(a)
	Date of Borrowing:    ______________.


		
	(b)
	Type of Borrowing:    ______________.


		
	(c)
	Interest Period:    [one] [three] [six] months.


		
	(d)
	Aggregate amount to be [converted] [continued]:    $______________.


		
	2.
	The effective date of the election made pursuant to this Interest Election Request is __________________.


		
	3.
	The Borrowing resulting from this Interest Election Request shall be a _______________ Borrowing.


4.    The Interest Period applicable to the resulting Borrowing is _________________.
The undersigned certifies that [s]he is authorized to execute this request on behalf of the Borrower.  The Borrower represents and warrants that:
		
	(i)
	at the time of any immediately after giving effect to the requested Borrowing, (i) no Default or Event of Default shall have occurred and be continuing and (ii) there shall have been no events that have, or could reasonably be expected to cause, a Material Adverse Effect since the date of the last Borrowing; and


		
	(ii)
	the representations and warranties of the Borrower set forth in the Credit Agreement shall be true and correct on and as of the date of the requested Borrowing (except that any representation or warranty which by its terms is made as of an earlier date shall be true and correct as of such earlier date).


Each capitalized term used but not defined herein shall have the meaning assigned to such term in the Credit Agreement.





Very truly yours,


RACKSPACE HOSTING, INC.






By:        
Name:        
Title:        







EXHIBIT 5.01
FORM OF COMPLIANCE CERTIFICATE
The undersigned hereby certifies that [s]he is a Financial Officer or the Chief Executive Officer of Rackspace Hosting, Inc., a Delaware corporation (the “Borrower”) and that as such [s]he is authorized to execute this certificate on behalf of the Borrower.  With reference to the Revolving Credit Agreement dated September 23, 2011 (together with all amendments or supplements thereto being the “Credit Agreement”), among the Borrower, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders, the undersigned represents and warrants as follows (each capitalized term used herein having the same meaning given to it in the Credit Agreement unless otherwise specified):
(i)    The representations and warranties of the Borrower set forth in the Credit Agreement are , to the best of the undersigned's knowledge, true and correct at and as of the time of delivery hereof (except any representation or warranty which by its terms was made as of an earlier date was true and correct as of such earlier date).
(ii)    The Borrower hereby certifies that no Default has occurred or is continuing, or if a Default has occurred, the details thereof and any action taken or proposed to be taken with respect thereto are specified on Exhibit A attached hereto.
(iii)    There have been no changes in GAAP or the application thereof since the date of the last audited financial statements referred to in Section 3.04 of the Credit Agreement, or if any such change has occurred, the effect of such change on the financial statements accompanying this Compliance Certificate is set forth on Exhibit A attached hereto.
(iv)    Calculations for all financial covenants are set forth in the worksheet attached hereto as Exhibit B.
EXECUTED AND DELIVERED this _____ day of _____________________.
BORROWER:


RACKSPACE HOSTING, INC.






By:        
Name:        
Title:        







EXHIBIT A


DEFAULTS; CHANGES IN GAAP





EXHIBIT B
FINANCIAL COVENANT CALCULATION WORKSHEET
	
			
	 
	Pro Forma Calculation
	Covenant Requirement

	Leverage Ratio:
	 
	< 3.00

	(i)Total Debt
	 
	 

	To
	 
	 

	(ii)EBITDA
	 
	 

	 
	 
	 

	Interest Coverage Ratio:
	 
	> 3.00

	(i)EBITDA
	 
	 

	To
	 
	 

	(ii)Interest Expense
	 
	 

	 
	 
	 

	Total Required Assets:
	 
	> total Credit Exposures plus $100,000,000

	(i)Tangible Assets of the Borrower
	 
	 

	Minus the sum of:
	 
	 

	(i)Tangible Assets of Subsidiaries that are not Guarantors
	 
	 

	(ii)Restricted cash of the Loan Parties
	 
	 

	and
	 
	 

	(iii)Book value of the Capital Lease Obligations of the Loan Parties
	 
	 






Calculation of Total Debt
For the Borrower and the Subsidiaries on a consolidated basis, the sum of the following:
(i)    obligations for borrowed money or with respect to deposits or advances of any kind;
$___________________
(ii)    obligations evidenced by bonds, debentures, notes or similar instruments;
$___________________
(iii)    obligations upon which interest charges are customarily paid;
$___________________
    
(iv)    obligations under conditional sale or other title retention agreements relating to property acquired by the Borrower or a Subsidiary;
$___________________





(v)    obligations in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business);
$___________________
(vi)    Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or the Borrower or a Subsidiary, whether or not the Indebtedness secured thereby has been assumed;
$___________________
(vii)    Guarantees of Indebtedness of others;
$___________________
(viii)    Capital Lease Obligations;
$___________________
(ix)    obligations, contingent or otherwise, as an account party in respect of letters of credit and letters of guaranty; and
$___________________
(x)    obligations, contingent or otherwise, in respect of bankers' acceptances.
Equals Total Debt                    $________________
Calculation of EBITDA
Net Income                                    $___________
Plus, the following to the extent deducted in calculating such Net Income:
(i)    Interest Expense for such period;
$________________
(ii)    the provision for Federal, state, local and foreign taxes payable during such period;
$________________
(iii)    depreciation and amortization expense (plus any non-cash goodwill or other intangible asset impairment charges); and
$________________
(iv)    non-cash expenses related to equity compensation.
$________________
Equals EBITDA                    $_________________





Calculation of Tangible Assets (for the Borrower on a consolidated basis)
total assets;
$________________
Minus the sum of the following:
(i)    intangible assets; and
$________________
(ii)    goodwill.
$________________
Equals Tangible Assets for the Borrower on a consolidated basis
$_________________
Calculation of Tangible Assets (for Subsidiaries that are not Guarantors)
total assets;
$________________
Minus the sum of the following:
(i)    intangible assets; and
$________________
(ii)    goodwill.
$________________
Equals Tangible Assets for Subsidiaries that are not Guarantors
$_________________







EXHIBIT 9.04
FORM OF ASSIGNMENT AND ASSUMPTION
Reference is made to the Revolving Credit Agreement dated as of September 23, 2011 (as amended and in effect on the date hereof, the “Credit Agreement”), among Rackspace Hosting, Inc., the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders.  Capitalized terms defined in the Credit Agreement are used herein with the same meanings.
The Assignor named below hereby sells and assigns, without recourse, to the Assignee named below, and the Assignee hereby purchases and assumes, without recourse, from the Assignor, effective as of the Assignment Date set forth below the interests set forth on the following page hereof (the “Assigned Interest”) in the Assignor's rights and obligations under the Credit Agreement, including, without limitation, the interests set forth on the following page hereof in the Commitment of the Assignor on the Assignment Date and Loans owing to the Assignor which are outstanding on the Assignment Date, together with the participations in Letters of Credit, LC Disbursements and Swingline Loans held by the Assignor on the Assignment Date, but excluding accrued interest and fees to and excluding the Assignment Date.  The Assignee hereby acknowledges receipt of a copy of the Credit Agreement.  From and after the Assignment Date (i) the Assignee shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the Assigned Interest, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the Assigned Interest, relinquish its rights and be released from its obligations under the Credit Agreement.
This Assignment and Assumption is being delivered to the Administrative Agent together with (i) any documentation required to be delivered by the Assignee pursuant to Section 9.04(b) of the Credit Agreement, duly completed and executed by the Assignee, and (ii) if the Assignee is not already a Lender under the Credit Agreement, an Administrative Questionnaire in the form supplied by the Administrative Agent, duly completed by the Assignee.  The [Assignee/Assignor] shall pay the fee payable to the Administrative Agent pursuant to Section 9.04(b) of the Credit Agreement.
This Assignment and Assumption shall be governed by and construed in accordance with the laws of the State of Texas.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment (“Assignment Date”):







	
			
	Facility
	Principal Amount Assigned
	Percentage Assigned of Commitment (set forth, to at least 8 decimals, as a percentage of the aggregate Commitments of all Lenders)

	Commitment Assigned:
	$
	%

	Revolving Loans:
	 
	 




The terms set forth herein are hereby agreed to:
________________________________, 
as Assignor




By:        
Name:        
Title:        








________________________________, 
as Assignee




By:        
Name:        
Title:        







The undersigned hereby consent to the within assignment:
	
		
	Rackspace Hosting, Inc.1






By: __________________________________
Name:
Title:
	JPMorgan Chase Bank, N.A.,
as Administrative Agent 2




By: __________________________________
Name:
Title:

	 
	 

	 
	JPMorgan Chase Bank, N.A., 
as Issuing Bank and Swingline Lender




By: __________________________________
Name:
Title:

	 
	 

	 
	 

	 
	 










1 Consent to be included to the extent required by Section 9.04(b)(i)(A) of the Credit Agreement.
2 Consent to be included to the extent required by Section 9.04(b)(i)(B) of the Credit Agreement.