exv10w5






Exhibit 10.5




NOTE: PORTIONS OF THIS AGREEMENT ARE THE SUBJECT OF A

CONFIDENTIAL TREATMENT REQUEST BY THE REGISTRANT TO THE

SECURITIES AND EXCHANGE COMMISSION. SUCH PORTIONS HAVE BEEN

REDACTED AND ARE MARKED WITH A “[****]” IN PLACE OF THE REDACTED LANGUAGE.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT




among



PENSON WORLDWIDE, INC.,

as the Borrower,



REGIONS BANK,

as Administrative Agent, Swing Line Lender,

and

Letter of Credit Issuer,



REGIONS CAPITAL MARKETS, a division of Regions Bank,

as Lead Arranger and Bookrunner,



THE PRIVATEBANK AND TRUST COMPANY,

as Syndication Agent,



TEXAS CAPITAL BANK, NATIONAL ASSOCIATION and

CAPITAL ONE, N.A., as Co-Documentation Agents,



and



The Other Lenders Party Hereto



 









 






TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I.
	 	DEFINITIONS AND ACCOUNTING TERMS	 	 	1	 
	 
	 	 	 	 	 	 
	1.01 
	 	Defined Terms	 	 	1	 
	1.02 
	 	Other Interpretive Provisions	 	 	26	 
	1.03 
	 	Accounting Terms	 	 	27	 
	1.04 
	 	Rounding	 	 	28	 
	1.05 
	 	Times of Day	 	 	28	 
	1.06 
	 	Letter of Credit Amounts	 	 	28	 
	 
	 	 	 	 	 	 
	ARTICLE II.
	 	THE COMMITMENTS AND CREDIT EXTENSIONS	 	 	28	 
	 
	 	 	 	 	 	 
	2.01 
	 	Revolving Loans	 	 	28	 
	2.02 
	 	Borrowings, Conversions and Continuations of Revolving Loans	 	 	28	 
	2.03 
	 	Letters of Credit	 	 	30	 
	2.04 
	 	Swing Line Loans	 	 	39	 
	2.05 
	 	Prepayments and Mandatory Prepayments	 	 	42	 
	2.06 
	 	Termination or Reduction of Commitments	 	 	44	 
	2.07 
	 	Repayment of Loans	 	 	44	 
	2.08 
	 	Interest	 	 	44	 
	2.09 
	 	Fees	 	 	45	 
	2.10 
	 	Computation of Interest and Fees	 	 	46	 
	2.11 
	 	Evidence of Debt	 	 	46	 
	2.12 
	 	Payments Generally; Administrative Agent’s Clawback	 	 	47	 
	2.13 
	 	Sharing of Payments by Lenders	 	 	49	 
	2.14 
	 	Increase in Commitments	 	 	50	 
	2.15 
	 	Extension of Maturity Date	 	 	51	 
	 
	 	 	 	 	 	 
	ARTICLE III.
	 	TAXES, YIELD PROTECTION AND ILLEGALITY	 	 	53	 
	 
	 	 	 	 	 	 
	3.01 
	 	Taxes	 	 	53	 
	3.02 
	 	Illegality	 	 	55	 
	3.03 
	 	Inability to Determine Rates	 	 	55	 
	3.04 
	 	Increased Costs	 	 	56	 
	3.05 
	 	Compensation for Losses	 	 	57	 
	3.06 
	 	Mitigation Obligations; Replacement of Lenders	 	 	58	 
	3.07 
	 	Survival	 	 	59	 
	 
	 	 	 	 	 	 
	ARTICLE IV.
	 	CONDITIONS PRECEDENT TO CLOSING	 	 	59	 
	 
	 	 	 	 	 	 
	4.01 
	 	Conditions of Closing of Credit Agreement	 	 	59	 
	4.02 
	 	Conditions to all Credit Extensions	 	 	62	 
	 
	ARTICLE V.
	 	REPRESENTATIONS AND WARRANTIES	 	 	63	 
	 
	 	 	 	 	 	 
	5.01 
	 	Existence, Qualification and Power	 	 	63	 






i









 







TABLE OF CONTENTS






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	5.02 
	 	Authorization; No Contravention	 	 	63	 
	5.03 
	 	Governmental Authorization; Other Consents	 	 	63	 
	5.04 
	 	Binding Effect	 	 	63	 
	5.05
	 	Financial Statements; No Material Adverse Effect; No Internal Control Event	 	 	64	 
	5.06 
	 	Litigation	 	 	65	 
	5.07 
	 	No Default	 	 	65	 
	5.08 
	 	Ownership of Property; Liens	 	 	65	 
	5.09 
	 	Environmental Compliance	 	 	65	 
	5.10 
	 	Insurance	 	 	65	 
	5.11 
	 	Taxes	 	 	65	 
	5.12 
	 	ERISA Compliance	 	 	66	 
	5.13 
	 	Subsidiaries; Equity Interests	 	 	66	 
	5.14 
	 	Margin Regulations; Investment Company Act; Other Regulations	 	 	66	 
	5.15 
	 	Disclosure	 	 	67	 
	5.16 
	 	Compliance with Laws	 	 	67	 
	5.17 
	 	Taxpayer Identification Number	 	 	67	 
	5.18 
	 	Intellectual Property; Licenses,
Etc	 	 	67	 
	5.19 
	 	Solvency	 	 	68	 
	5.20 
	 	Common Enterprise	 	 	68	 
	5.21 
	 	Burdensome Agreements	 	 	68	 
	5.22 
	 	Collateral	 	 	68	 
	 
	 	 	 	 	 	 
	ARTICLE VI.
	 	AFFIRMATIVE COVENANTS	 	 	69	 
	 
	 	 	 	 	 	 
	6.01 
	 	Financial Statements	 	 	69	 
	6.02 
	 	Certificates; Other Information	 	 	70	 
	6.03 
	 	Notices	 	 	71	 
	6.04 
	 	Payment of Obligations	 	 	72	 
	6.05 
	 	Preservation of Existence, Etc	 	 	73	 
	6.06 
	 	Maintenance of Properties	 	 	73	 
	6.07 
	 	Maintenance of Insurance	 	 	73	 
	6.08 
	 	Compliance with Laws and Material Contracts	 	 	73	 
	6.09 
	 	Books and Records	 	 	73	 
	6.10 
	 	Inspection Rights	 	 	73	 
	6.11 
	 	Use of Proceeds	 	 	74	 
	6.12 
	 	Additional Subsidiaries and Collateral	 	 	74	 
	6.13 
	 	Further Assurances	 	 	74	 
	 
	 	 	 	 	 	 
	ARTICLE VII.
	 	NEGATIVE COVENANTS	 	 	75	 
	 
	 	 	 	 	 	 
	7.01 
	 	Liens	 	 	75	 
	7.02 
	 	Investments	 	 	76	 
	7.03 
	 	Indebtedness	 	 	77	 






ii









 






TABLE OF CONTENTS






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	7.04 
	 	Fundamental Changes	 	 	79	 
	7.05 
	 	Dispositions	 	 	79	 
	7.06 
	 	Restricted Payments	 	 	79	 
	7.07 
	 	Change in Nature of Business	 	 	80	 
	7.08 
	 	Transactions with Affiliates	 	 	80	 
	7.09 
	 	Burdensome Agreements	 	 	81	 
	7.10 
	 	Use of Proceeds	 	 	81	 
	7.11 
	 	Sale and Leaseback	 	 	81	 
	7.12 
	 	Change in Fiscal Year or Accounting Methods	 	 	81	 
	7.13 
	 	Prepayment of Indebtedness	 	 	81	 
	7.14 
	 	Material Contracts	 	 	82	 
	7.15 
	 	Management Fees	 	 	82	 
	7.16 
	 	Financial Covenants	 	 	82	 
	7.17 
	 	Amendments to Organization Documents	 	 	83	 
	7.18 
	 	Amendments to 2014 and 2017 Notes Offering Documents	 	 	83	 
	7.19 
	 	Ridge Acquisition	 	 	83	 
	 
	 	 	 	 	 	 
	ARTICLE VIII.
	 	EVENTS OF DEFAULT AND REMEDIES	 	 	83	 
	 
	 	 	 	 	 	 
	8.01 
	 	Events of Default	 	 	83	 
	8.02 
	 	Remedies Upon Event of Default	 	 	85	 
	8.03 
	 	Application of Funds	 	 	86	 
	 
	 	 	 	 	 	 
	ARTICLE IX.
	 	ADMINISTRATIVE AGENT	 	 	87	 
	 
	 	 	 	 	 	 
	9.01 
	 	Appointment and Authority	 	 	87	 
	9.02 
	 	Rights as a Lender	 	 	87	 
	9.03 
	 	Exculpatory Provisions	 	 	88	 
	9.04 
	 	Reliance by Administrative Agent	 	 	89	 
	9.05 
	 	Delegation of Duties	 	 	89	 
	9.06 
	 	Resignation or Removal of Administrative Agent	 	 	89	 
	9.07 
	 	Non-Reliance on Administrative Agent and Other Lenders	 	 	90	 
	9.08 
	 	No Other Duties, Etc	 	 	90	 
	9.09 
	 	Administrative Agent May File Proofs of Claim	 	 	90	 
	9.10 
	 	Collateral and Guaranty Matters	 	 	91	 
	 
	 	 	 	 	 	 
	ARTICLE X.
	 	MISCELLANEOUS	 	 	92	 
	 
	 	 	 	 	 	 
	10.01 
	 	Amendments, Etc	 	 	92	 
	10.02 
	 	Notices; Effectiveness; Electronic Communication	 	 	93	 
	10.03 
	 	No Waiver; Cumulative Remedies	 	 	95	 
	10.04 
	 	Expenses; Indemnity; Damage Waiver	 	 	95	 
	10.05 
	 	Payments Set Aside	 	 	97	 
	10.06 
	 	Successors and Assigns	 	 	97	 
	10.07 
	 	Treatment of Certain Information; Confidentiality	 	 	101	 






iii









 






TABLE OF CONTENTS






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	10.08 
	 	Right of Setoff	 	 	102	 
	10.09 
	 	Interest Rate Limitation	 	 	103	 
	10.10 
	 	Counterparts; Integration; Effectiveness	 	 	103	 
	10.11 
	 	Survival of Representations and Warranties	 	 	103	 
	10.12 
	 	Severability	 	 	103	 
	10.13 
	 	Replacement of Lenders	 	 	104	 
	10.14 
	 	Governing Law; Jurisdiction; Etc.	 	 	104	 
	10.15 
	 	Waiver of Jury Trial	 	 	105	 
	10.16 
	 	No Advisory or Fiduciary Responsibility	 	 	106	 
	10.17 
	 	USA PATRIOT Act Notice	 	 	107	 
	10.18 
	 	Entire Agreement	 	 	107	 
	 
	 	 	 	 	 	 
	SIGNATURES	 	 	S-1	 






iv









 






	 	 	 	 	 	 	 
	SCHEDULES	 	 	 	 
	 
	 	 	 	 	 	 
	2.01
	 	Commitments and Pro Rata Percentages	 	 	 	 
	5.05
	 	Existing Indebtedness	 	 	 	 
	5.13
	 	Subsidiaries and Other Equity Investments	 	 	 	 
	5.20
	 	Common Enterprise	 	 	 	 
	7.01
	 	Existing Liens	 	 	 	 
	7.02
	 	Existing Investments	 	 	 	 
	10.02
	 	Administrative Agent’s Office; Certain Addresses for Notices	 	 	 	 
	 
	 	 	 	 	 	 
	EXHIBITS	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Form of	 	 	 	 
	 
	 	 	 	 	 	 
	A
	 	Revolving Loan Notice	 	 	 	 
	B
	 	Swing Line Loan Notice	 	 	 	 
	C
	 	Note	 	 	 	 
	D
	 	Compliance Certificate	 	 	 	 
	E
	 	Assignment and Assumption	 	 	 	 
	F
	 	Opinion Matters	 	 	 	 
	G
	 	Guaranty	 	 	 	 






v









 






SECOND AMENDED AND RESTATED CREDIT AGREEMENT




     This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Agreement”) is entered into
as of May 6, 2010, among PENSON WORLDWIDE, INC. a Delaware corporation (the “Borrower”),
each lender from time to time party hereto (collectively, the “Lenders” and individually, a
“Lender”), REGIONS BANK, as Administrative Agent (in such capacity, the “Administrative
Agent”), Swing Line Lender, and Letter of Credit Issuer, REGIONS CAPITAL MARKETS, a division of
Regions Bank, as Lead Arranger and Bookrunner, THE PRIVATEBANK AND TRUST COMPANY, as Syndication
Agent and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION and CAPITAL ONE, N.A., as Co-Documentation
Agents.



     .The Borrower, the Administrative Agent, and the lenders party thereto, executed that certain
Amended and Restated Credit Agreement dated as of May 1, 2009 (as has been amended, restated,
supplemented or modified from time to time, the “Existing Credit Agreement”), whereby the
lenders thereto made certain revolving loans to the Borrower.



     The Borrower has requested that the Lenders amend and restate the Existing Credit Agreement
and provide a revolving credit facility, and the Lenders are willing to do so on the terms and
conditions set forth herein. This amendment and restatement is in extension and renewal, and not
in extinguishment or novation, of the indebtedness outstanding under the Existing Credit Agreement,
as herein provided, it being acknowledged and agreed by the Borrower that the Indebtedness under
this Agreement constitutes an extension, renewal, and ratification of the outstanding indebtedness
under the Existing Credit Agreement.



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



ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS




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



     “2000 Stock Incentive Plan” means the Borrower’s 2000 Amended and Restated Stock
Incentive Plan.



     “2014 Convertible Notes” means those certain convertible senior notes due 2014 issued
pursuant to the 2014 Notes Offering in an aggregate principal amount of up to $75,000,000, as may
be amended in accordance with Section 7.18.



     “2014 Indenture” means that certain Indenture by and between the Borrower and US Bank,
National Association, as Trustee, with respect to the 2014 Convertible Notes, as may be amended in
accordance with Section 7.18.


     “2014 Notes Offering” means the issuance by the Borrower of the 2014 Convertible Notes
pursuant to the 2014 Indenture and the 2014 Offering Memorandum.



1









 






     “2014 Notes Offering Documents” means the 2014 Convertible Notes and the 2014
Indenture.



     “2014 Offering Memorandum” means that certain Offering Memorandum issued by the
Borrower with respect to the sale of the 2014 Convertible Notes.



     “2017 Indenture” means that certain Indenture by and between the Borrower and U.S.
Bank National Association, as Trustee, with respect to the 2017 Senior Notes, as may be amended in
accordance with Section 7.18.



     “2017 Notes Offering” means the issuance by the Borrower of the 2017 Senior Notes
pursuant to the 2017 Indenture and the 2017 Offering Memorandum.



     “2017 Notes Offering Documents” means the 2017 Senior Notes, the 2017 Indenture and
the 2017 Pledge Agreement.



     “2017 Offering Memorandum” means that certain Offering Memorandum issued by the
Borrower with respect to the sale of the 2017 Senior Notes.



     “2017 Pledge Agreement” means that certain Second Lien Pledge Agreement executed
between the Borrower and U.S. Bank National Association with respect to the 2017 Senior Notes, as
may be amended in accordance with Section 7.18.



     “2017 Senior Notes” means those certain senior notes due 2017 issued pursuant to the
2017 Notes Offering in an aggregate principal amount of up to $200,000,000, as may be amended in
accordance with Section 7.18.



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



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



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



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



     “Agreement” means this Second Amended and Restated Credit Agreement.



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



2









 





Applicable Margin




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	LIBOR Rate/	 	 
	Pricing	 	Consolidated	 	Commitment	 	Letters of	 	 
	Level	 	Leverage Ratio	 	Fee	 	Credit	 	Base Rate
	 	1	 	 	Less than **** to ****
	 	 	*	***%	 	 	*	***%	 	 	*	***%
	 	2	 	 	Greater than or equal
	 	 	*	***%	 	 	*	***%	 	 	*	***%
	 	 	 	 	to **** to **** but
less than **** to ****
	 	 	 	 	 	 	 	 	 	 	 	 
	 	3	 	 	Greater than or equal
	 	 	*	***%	 	 	*	***%	 	 	*	***%
	 	 	 	 	to **** to **** but
less than **** to ****
	 	 	 	 	 	 	 	 	 	 	 	 
	 	4	 	 	Greater than or equal
	 	 	*	***%	 	 	*	***%	 	 	*	***%
	 	 	 	 	to **** to **** but
less than **** to ****
	 	 	 	 	 	 	 	 	 	 	 	 
	 	5	 	 	Greater than or equal
	 	 	*	***%	 	 	*	***%	 	 	*	***%
	 	 	 	 	to **** to ****
	 	 	 	 	 	 	 	 	 	 	 	 







     Any increase or decrease in the Applicable Margin resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day immediately
following the date a Compliance Certificate is delivered pursuant to Section 6.02(a);
provided, however, that if a Compliance Certificate is not delivered when due in
accordance with such Section, then Pricing Level 5 shall apply as of the first Business Day after
the date on which such Compliance Certificate was required to have been delivered until such
Compliance Certificate is delivered indicating a different Pricing Level. The Applicable Margin in
effect from the Closing Date through the date the financial statements for the fiscal quarter ended
June 30, 2010 are delivered pursuant to Section 6.01(b) shall be Pricing Level 5.



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



     “Asset Purchase Agreement” means that certain Asset Purchase Agreement dated as of
November 2, 2009, among the Borrower, Ridge and Broadridge in form and substance reasonably
acceptable to the Administrative Agent.



     “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
10.06(b), and accepted by the Administrative Agent, in substantially the form of Exhibit
E or any other form approved by the Administrative Agent.



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



3









 





     “Audited Financial Statements” means the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the fiscal year ended December 31, 2009, and the related
consolidated statements of income or operations, shareholders’ equity and cash flows for such
fiscal year of the Borrower and its Subsidiaries, including the notes thereto.



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



     “Bankruptcy Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.



     “Base
Rate” means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such
day as publicly announced from time to time by Regions Bank as its “prime rate,” and (c) the LIBOR
Rate (subject to the floor of 2.00%) for such day for an Interest Period of one month plus 1%. The
“prime rate” is a rate set by Regions Bank based upon various factors including Regions Bank’s
costs and desired return, general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above, or below such announced rate. Any
change in such rate announced by Regions Bank shall take effect at the opening of business on the
day specified in the public announcement of such change.



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



     “Base Rate Revolving Loan” means a Revolving Loan that is a Base Rate Loan.



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



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



     “Broadridge” means Broadridge Financial Solutions, Inc.



     “Broker Dealer Subsidiaries” means Penson Financial Services, Inc., Penson Financial
Service Canada, Inc., Penson Financial Services Limited, Penson GHCO, Penson Financial Futures,
Inc., Penson Execution Services, Inc., Penson Financial Services Australia Pty Ltd,
Penson Financial Services Asia Limited, Penson Worldwide Nominees Limited, Penson Australia
Nominees Pty. Ltd. and each other broker dealer and/or futures commission merchant (or foreign
equivalent) direct or indirect Subsidiary of the Borrower engaged in activities substantially
similar to those of such Persons (including subsets of such activities).



4









 





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



     “Capital Assets” means, with respect to any Person, all equipment, fixed assets and
real property or improvements of such Person, or replacements or substitutions therefor or
additions thereto, that, in accordance with GAAP, have been or should be reflected as additions to
property, plant or equipment on the balance sheet of such Person.



     “Capital Expenditures” means, with respect to any Person for any period, any
expenditure incurred in respect of the purchase or other acquisition of any Capital Asset
(excluding normal replacements and maintenance which are properly charged to current operations).
For purposes of this definition, the purchase price (or, if such Capital Asset has already been
purchased, the fair market value) of any Capital Asset that is traded in, swapped or exchanged for
any existing Capital Asset or with insurance proceeds shall be included in Capital Expenditures
only to the extent of the gross amount by which such purchase price exceeds the credit granted by
the seller of such Capital Asset for the Capital Asset being traded in at such time or the amount
of such insurance proceeds, as the case may be.



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



     “Cash Equivalents” (a) obligations issued or fully guaranteed or insured by the United
States Government or any state thereof, the District of Columbia or the Commonwealth of Puerto Rico
or any agency or instrumentality thereof having maturities of not more than 12 months from the date
of acquisition, (b) certificates of deposit with maturities of 12 months and other interest bearing
deposits or accounts, with a Lender or with any commercial bank organized under the laws of the
United States of America or any state thereof, the District of Columbia or the Commonwealth of
Puerto Rico, having capital and surplus in excess of $250,000,000 or being fully insured by the
FDIC, (c) repurchase obligations with a term of not more than seven days for underlying securities
of the types described in clauses (a) and (b) entered into with any financial
institution meeting the qualifications specified in clause (b) above, (d) commercial paper
issued by a Lender or any Affiliate of a Lender and commercial paper rated A/1 or the equivalent
thereof by Standard & Poor’s Ratings Group or P-1 or the equivalent thereof by Moody’s Investors
Service, Inc. on the date of investment and in each case maturing within 12 months after the date
of acquisition, and (e) money market funds that invest in any of the foregoing clauses
(a)-(d).



     “Change in Law” means the occurrence, after the date of this Agreement, of any of the
following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any
change
in any law, rule, regulation or treaty or in the administration, interpretation or application
thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or
directive (whether or not having the force of law) by any Governmental Authority.



5









 





     “Change of Control” means an event or series of events by which:




     (a) other than (i) the Current Management Group, (ii) J. Kelly Gray, his immediate
family, and their respective Affiliates, (iii) William D. Gross, his immediate family, and
their respective Affiliates, (iv) TCV Member Fund, L.P. and TCV V, L.P. and their respective
Affiliates and (v) Broadridge and its Affiliates, any “person” or “group,” (as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding
any employee benefit plan of such person or its subsidiaries, and any person or entity
acting in its capacity as trustee, agent or other fiduciary or administrator of any such
plan), becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has the right to acquire,
whether such right is exercisable immediately or only after the passage of time (such right,
an “option right”)), directly or indirectly, of 25% or more of the equity securities of the
Borrower entitled to vote for members of the board of directors or equivalent governing body
of the Borrower on a fully-diluted basis (and taking into account all such securities that
such person or group has the right to acquire pursuant to any option right);




     (b) during any period of 12 consecutive months, a majority of the members of the board
of directors or other equivalent governing body of the Borrower cease to be composed of
individuals (i) who were members of that board or equivalent governing body on the first day
of such period, (ii) whose election or nomination to that board or equivalent governing body
was approved by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing body or
(iii) whose election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that board or equivalent governing
body (excluding, in the case of both clause (ii) and clause (iii), any individual whose
initial nomination for, or assumption of office as, a member of that board or equivalent
governing body occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or group other
than a solicitation for the election of one or more directors by or on behalf of the board
of directors); or




     (c) other than those Persons excluded under paragraph (a) above, any Person or two or
more Persons acting in concert shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation thereof, will result in its
or their acquisition of the power to exercise, directly or indirectly, control over the
management or policies of the Borrower, or control over the equity securities of the
Borrower entitled to vote for members of the board of directors or equivalent
governing body of the Borrower on a fully-diluted basis (and taking into account all
such securities that such Person or group has the right to acquire pursuant to any option
right) representing 25% or more of the combined voting power of such securities.



6









 





     “Closing Date” means the earlier of May 6, 2010 or the first date that all the
conditions precedent in Section 4.01 are satisfied or waived in accordance with Section
10.01.



     “Code” means the Internal Revenue Code of 1986.



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



     “Compliance Certificate” means a certificate substantially in the form of Exhibit
D.



     “Consolidated EBITDA” means, for any period, for the Borrower and its Subsidiaries on
a consolidated basis, an amount equal to Consolidated Net Income for such period plus (a)
the following to the extent deducted in calculating such Consolidated Net Income: (i) Interest
Charges for such period, (ii) the provision for Federal, state, local and foreign income taxes
payable by the Borrower and its Subsidiaries for such period, (iii) depreciation and amortization
expense, (iv) non-cash stock based compensation and (v) costs, expenses and fees incurred in
connection with the Ridge Acquisition, the 2017 Notes Offering, the 2014 Notes Offering, the
Existing Credit Agreement and this Agreement minus (b) the following to the extent included
in calculating such Consolidated Net Income: (i) Federal, state, local and foreign income tax
credits of the Borrower and its Subsidiaries for such period and (ii) all non-cash items increasing
Consolidated Net Income for such period. In addition, for the twelve month period following the
closing of the Ridge Acquisition, the calculation of Consolidated EBITDA shall include an amount
equal to $1,050,000 for any month (commencing with the first full month after the closing of the
Ridge Acquisition) for which the actual EBITDA earned by PFS and attributable to correspondent
clearing contracts acquired in the Ridge Acquisition is not included in the calculation of
Consolidated EBITDA.



     “Consolidated Fixed Charge Coverage Ratio” means, at any date of determination, the
ratio of (a) Consolidated EBITDA, to (b) the sum of (i) Interest Charges, (ii) the aggregate
principal amount of all regularly scheduled principal payments or redemptions or similar
acquisitions for value of outstanding debt for borrowed money, it being understood the Total
Outstandings hereunder shall be assumed to be amortized over a five year period solely in order to
calculate scheduled payments of the Loans and (iii) the aggregate amount of Federal, state, local
and foreign income taxes paid in cash, in each case, of or by the Borrower and its Subsidiaries for
the most recently completed period of determination; provided, however, that for
purposes of calculating the Consolidated Fixed Charge Coverage Ratio, Interest Charges with
respect to the 2014 Convertible Notes and the 2017 Senior Notes shall be limited to interest
paid in cash for such period.



     “Consolidated Funded Indebtedness” means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal



7









 







amount of all obligations, whether current or long-term, for borrowed money (including Obligations
hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all direct obligations arising under
letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety
bonds and similar instruments, (d) all obligations in respect of the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course of business), (e)
Attributable Indebtedness in respect of capital leases and Synthetic Lease Obligations, (f) without
duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in
clauses (a) through (e) above of Persons other than the Borrower or any Subsidiary, and (g) all
Indebtedness of the types referred to in clauses (a) through (f) above of any partnership or joint
venture (other than a joint venture that is itself a corporation or limited liability company) in
which the Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness
is expressly made non-recourse to the Borrower or such Subsidiary. Notwithstanding the foregoing,
Short Term Subsidiary Indebtedness and Indebtedness with respect to clause (g) in the
definition of “Indebtedness” and earn outs and other deferred purchase price obligations incurred
in respect of acquisitions completed prior to the Closing Date and previously disclosed to the
Administrative Agent or approved pursuant to the terms of this Agreement shall not be included in
the definition of Consolidated Funded Indebtedness.



     “Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a)
Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA for the period of the
four fiscal quarters most recently ended.



     “Consolidated Net Income” means, for any period, for the Borrower and its Subsidiaries
on a consolidated basis, the net income of the Borrower and its Subsidiaries (excluding
extraordinary gains and extraordinary losses) for that period.



     “Consolidated Tangible Net Worth” means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, Shareholders’ Equity of the Borrower and its
Subsidiaries on that date minus the Intangible Assets of the Borrower and its Subsidiaries on that
date.



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



     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the overall management or overall policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have meanings correlative thereto.



     “Credit Extension” means each of the following: (a) a Borrowing and (b) a Letter of
Credit Extension.



8









 





     “Current Management Group” means Roger J. Engemoen, Jr., Daniel P. Son, and Philip A.
Pendergraft.



     “Debit Balances” means the outstanding balances attributable to a Person’s margin
lending activities.



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



     “Default Rate” means (a) when used with respect to Obligations other than Letter of
Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin
applicable to Base Rate Loans plus (iii) 2% per annum; provided, however,
that with respect to a LIBOR Rate Loan, the Default Rate shall be an interest rate equal to the
interest rate (including any Applicable Margin) otherwise applicable to such Loan plus 2% per
annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable
Margin plus 2% per annum.



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



     “Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by any Person, including
any sale, assignment, transfer or other disposal, with or without recourse, of any notes or
accounts receivable or any rights and claims associated therewith; provided,
however, that the 2014 Notes Offering, the conversion of 2014 Convertible Notes, and the
2017 Notes Offering shall not be considered Dispositions.



     “Documentation Agent” means Texas Capital Bank, National Association and Capital One,
N.A., each in its capacity as a Co-Documentation Agent under any of the Loan Documents, or any
successor documentation agent.



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



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



     “Eligible Assignee” means any Person that meets the requirements to be an assignee
under Section 10.06(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 10.06(b)(iii)).



     “Environmental Laws” means any and all Federal, state, local, and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,



9









 







franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including those
related to hazardous substances or wastes, air emissions and discharges to waste or public systems.



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



     “Equity Interests” means, with respect to any Person, all of the shares of capital
stock of (or other ownership interests or dividend or distribution interests associated with
ownership in) such Person, all of the warrants, options or other rights for the purchase or
acquisition from such Person of shares of capital stock of (or other ownership interests or
dividend or distribution interests associated with ownership in) such Person, all of the securities
convertible into or exchangeable for shares of capital stock of (or other ownership interests or
dividend or distribution interests associated with ownership in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares (or such other interests),
and all of the other ownership interests or dividend or distribution interests associated with
ownership in such Person (including partnership, member or trust interests therein), whether voting
or nonvoting, and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination; provided, however, that JBO Stock shall
not be considered Equity Interests.



     “Equity Repurchase” means the Borrower’s repurchase of its Equity Interests with
respect to (a) any shares withheld to cover tax-withholding requirements relating to the vesting of
restricted stock units issued pursuant to, and other ordinary course repurchases in respect of, the
2000 Stock Incentive Plan and (b) upon the consent of the Required Lenders, any other restricted
stock units or stock options repurchased from former employees, directors or contractors in
accordance with the terms of the Borrower’s restricted stock unit or stock option plans.



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



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



     “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of
ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2)
of ERISA) or a cessation of operations that is treated as such a withdrawal



10









 







under Section 4062(e)
of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing
of a notice of intent to terminate, the treatment of a Plan amendment as a termination under
Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA,
other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.



     “Eurocurrency Liabilities” has the meaning specified in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time to time.



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



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



     “Existing Credit Agreement” means that certain Amended and Restated Credit Agreement
dated as of May 1, 2009, by and between the Borrower, the Administrative Agent and the lenders
party thereto, as has been amended, restated, supplemented or modified from time to time.



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



11









 







1%)
charged to Regions Bank on such day on such transactions as determined by the Administrative Agent.



     “Fee Letter” means the letter agreement dated April 13, 2010, between the Borrower and
the Administrative Agent.



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



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



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



     “Fronting Fees” has the meaning specified in Section 2.03(i).



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



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



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



     “Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
obligation payable or performable by another Person (the “primary obligor”) in any manner,
whether directly or indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the
payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level of income or



12









 




cash
flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other
obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in
respect of such Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any
assets of such Person securing any Indebtedness or other obligation of any other Person, whether or
not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or
otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.




     “Guarantors” means, collectively, SAI Holdings, Inc., Penson Holdings, Inc., and each
other Person who becomes a Guarantor hereunder, together with their successors and permitted
assigns.



     “Guaranty” means an Amended and Restated Guaranty made by each Guarantor in favor of
Administrative Agent and Lenders, substantially in the form of Exhibit G, as renewed,
extended, amended or restated from time to time.



     “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.



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



     “Impacted Lender” means (a) any Lender that is a Defaulting Lender and (b) any Lender
as to which (i) the Borrower, the Administrative Agent or the Letter of Credit Issuer has a good
faith belief that such Lender has defaulted in fulfilling its obligations under one or more other
syndicated credit facilities or (ii) an entity that controls such Lender has been deemed insolvent
or become subject to a bankruptcy or other similar proceeding.



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



     “Indebtedness” means, as to any Person at a particular time, without duplication, all
of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:




     (a) all obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;




     (b) all direct or contingent obligations of such Person arising under letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and
similar instruments;



13









 






     (c) net obligations of such Person under any Swap Contract;




     (d) all obligations of such Person to pay the deferred purchase price of property or
services (other than (i) trade accounts payable in the ordinary course of business and, in
each case, not past due for more than 60 days after the date on which such trade account
payable was created and (ii) earn outs and other deferred purchase price obligations
incurred in respect of acquisitions completed prior to the Closing Date and previously
disclosed to the Administrative Agent or permitted pursuant to the terms of this Agreement);




     (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person (including indebtedness arising under conditional
sales or other title retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;




     (f) capital leases and Synthetic Lease Obligations;




     (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in respect of any Equity Interest in such Person or any other Person
(excluding Equity Repurchases), valued, in the case of a redeemable preferred interest, at
the greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends; and




     (h) all Guarantees of such Person in respect of any of the foregoing.



     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture (other than a joint venture that is itself a corporation or limited
liability company) in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under
any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such
date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed
to be the amount of Attributable Indebtedness in respect thereof as of such date. Indebtedness of
the Borrower or a Subsidiary guaranteed by another Subsidiary or the Borrower shall be determined
without duplication.



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



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



     “Information” has the meaning specified in Section 10.07.



     “Intangible Assets” means assets that are considered to be intangible assets under
GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks,
patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and
capitalized research and development costs.



14









 





     “Intercreditor Agreement” means that certain Intercreditor Agreement, dated on or
about the date hereof, among the Borrower, the Administrative Agent, and U.S. Bank National
Association, as trustee and collateral agent for the 2017 Senior Notes, as renewed, extended,
amended or restated from time to time.



     “Interest Charges” means, for any period, for the Borrower, the sum of (a) all
interest, premium payments, debt discount, fees, charges and related expenses of the Borrower in
connection with borrowed money (including capitalized interest) or in connection with the deferred
purchase price of assets, in each case to the extent treated as interest in accordance with GAAP,
and (b) the portion of rent expense of the Borrower with respect to such period under capital
leases that is treated as interest in accordance with GAAP.



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



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




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




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




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



     “Internal Control Event” means a material weakness in, or fraud that involves
management or other employees who have a significant role in, the Borrower’s internal controls over
financial reporting, in each case as described in the Securities Laws.



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



15









 




other
Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit; provided, however,
that the 2014 Notes Offering, the conversion of 2014 Convertible Notes, and the 2017 Notes Offering
shall not be considered Investments. For purposes of covenant compliance, the amount of any
Investment shall be the amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.




     “IP Rights” has the meaning specified in Section 5.18.



     “IRS” means the United States Internal Revenue Service.



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



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



     “JBO Stock” means preferred stock issued by a Subsidiary to brokers or dealers for
purposes of establishing a joint back office arrangement as set forth in FINRA Rule 2520;
provided (i) such preferred stock does not accrue dividends, and (ii) such preferred stock
is issued in the ordinary course of business substantially consistent with the past practice of the
Borrower and its Subsidiaries.



     “Law” or “Laws” means, collectively, all international, foreign, federal,
state and local statutes, treaties, rules, regulations, ordinances, codes and administrative or
judicial precedents or authorities.



     “Lead Arranger” means Regions Capital Markets, in its capacity as lead arranger and
bookrunner.



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



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



     “Letter of Credit” means any standby letter of credit issued hereunder.



     “Letter of Credit Advance” means, with respect to each Lender, such Lender’s funding
of its participation in any Letter of Credit Borrowing in accordance with its Pro Rata Percentage.



16









 





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



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



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



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



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



     “Letter of Credit Issuer” means Regions Bank in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.



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



     “Letter of Credit Sublimit” means an amount equal to $10,000,000. The Letter of
Credit Sublimit is part of, and not in addition to, the Total Commitments.



     “LIBOR Rate” means, for any Interest Period for all LIBOR Rate Loans, an interest rate
per annum equal to the rate per annum obtained by dividing (a) the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) appearing on page “LIBOR 01” of the Reuters Screen (or
any successor page) as the London interbank offered rate for deposits in Dollars at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period for a period equal to
such Interest Period (provided that, if for any reason such rate is not available,
the term “LIBOR Rate” shall mean, for any Interest Period for all LIBOR Rate Loans, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the rate determined
by the Administrative Agent to be the offered rate on such other page or other service which
displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on page “LIBOR01” of the Reuters Screen, the applicable rate shall be
the arithmetic mean of all such rates) by (b) a percentage equal to 100% minus the LIBOR Rate



17









 




Reserve Percentage for such Interest Period. Notwithstanding anything contained herein to the
contrary, the LIBOR Rate shall never be less than 2.00%.




     “LIBOR Rate Loan” means a Revolving Loan that bears interest at a rate based on the
LIBOR Rate, excluding Base Rate Loans.



     “LIBOR Rate Reserve Percentage” for any Interest Period for all LIBOR Rate Loans means
the reserve percentage applicable two Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal
Reserve System in New York City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on LIBOR Rate Loans is determined) having a term
equal to such Interest Period.



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



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



     “Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee
Letter, the Pledge Agreement, each Guaranty, the Intercreditor Agreement, and any other agreement,
instrument, certificate, report and other document executed and delivered pursuant hereto or
thereto or otherwise evidencing or securing any Loan or any other Obligations, including any
renewals, extensions, modifications, increases, amendments, restatements, ratifications,
confirmations, supplements and rearrangements thereof.



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



     “Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties, liabilities (actual or contingent),
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole; (b) a
material
impairment of the ability of any Loan Party to perform its obligations under any Loan Document
to which it is a party; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against any Loan Party of any Loan Document to which it is a party.



     “Material Contract” means, with respect to any Person, (a) each contract to which such
Person is a party involving aggregate consideration payable to or by such Person of $20,000,000 or
more in any year or otherwise material to the business, condition (financial or otherwise),
operations, performance or properties of such Person and (b) whether or not included in



18









 




subsection
(a), the Outsourcing Agreement, the Asset Purchase Agreement, the Seller Notes, the 2014 Notes
Offering Documents and the 2017 Notes Offering Documents.




     “Material Domestic Subsidiary” shall mean Penson Financial Services, Inc., SAI
Holdings, Inc., GHP1, Inc., and each other Domestic Subsidiary of the Borrower having 5% or more of
the total assets and total revenues of the Borrower and its Subsidiaries determined on a
consolidated basis in accordance with GAAP as of the end of the most recent fiscal quarter for
which the Borrower has delivered financial statements pursuant to Section 6.01(a) or
(b). Notwithstanding anything to the contrary contained herein, so long as the Equity
Interests of GHP1, Inc. are being pledged pursuant to the Pledge Agreement and GHP2, LLC is wholly
owned by GHP1, Inc., GHP2, LLC and Penson GHCO shall not be a Material Domestic Subsidiary
hereunder.



     “Material Foreign Subsidiary” shall mean Penson Financial Services Canada Inc. and
each other Foreign Subsidiary of the Borrower having 5% or more of the total assets and total
revenues of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with
GAAP as of the end of the most recent fiscal quarter for which the Borrower has delivered financial
statements pursuant to Section 6.01(a) or (b).



     “Material Subsidiary” shall mean a Material Domestic Subsidiary and/or a Material
Foreign Subsidiary, as applicable.



     “Maturity Date” means the earlier of (a) May 6, 2013, as may be extended in accordance
with Section 2.15(a), and (b) or such other date on which the Loans become due and payable
as provided in this Agreement; provided, however, that if such date is not a
Business Day, the Maturity Date shall be the next preceding Business Day.



     “Maximum Rate” means at the particular time in question the maximum rate of interest
which, under applicable Law, any Lender is then permitted to charge on the Obligations. If the
maximum rate of interest which, under applicable Law, any Lender is permitted to charge on the
Obligations shall change after the date hereof, the Maximum Rate shall be automatically increased
or decreased, as the case may be, from time to time as of the effective time of each change in the
Maximum Rate without notice to the Borrower.



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



     “Net Cash Proceeds” means:




     (a) with respect to the Disposition of any asset by the Borrower or any Subsidiary, the
excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such
sale (including any cash received by way of deferred payment pursuant to, or by monetization
of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of
(A) the principal amount of any Indebtedness that is



19









 







secured by such asset and that is
required to be repaid in connection with the sale thereof (other than Indebtedness under the
Loan Documents), (B) the out-of-pocket expenses incurred by the Borrower or any Subsidiary
in connection with such sale and (C) taxes reasonably estimated to be actually payable
within two years of the date of the relevant asset sale as a result of any gain recognized
in connection therewith; and




     (b) with respect to the sale or issuance of any capital stock or other Equity Interest
(other than any exercise price or other payment in respect of the vesting or exercise of any
restricted stock units or stock options issued to employees, directors or contractors in
accordance with the terms of the Borrower’s restricted stock unit or stock option plans and
payments received in respect of the exercise of purchase rights pursuant to the Borrower’s
employee stock purchase plan) by the Borrower, the excess of (i) the sum of the cash and
Cash Equivalents received in connection with such sale or issuance over (ii) the
underwriting discounts and commissions, and other out-of-pocket expenses, incurred by the
Borrower in connection with such sale or issuance.



     “Non-Financed Capital Expenditures” means, with respect to any Person for any period,
any Capital Expenditure not financed by capitalized leases or with the proceeds of Borrowings.



     “Note” means a promissory note made by the Borrower in favor of a Lender evidencing
Loans made by such Lender, substantially in the form of Exhibit C, including any renewals,
extensions, modifications, increases, amendments, restatements, ratifications, confirmations,
supplements and rearrangements thereof.



     “Obligations” means all debts, liabilities and obligations of any Loan Party arising
under any Loan Document or any Swap Contract entered into with any Lender or any Affiliate of any
Lender, whether direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising, and shall also include all
fees, expenses and other amounts owing to any Lender pursuant to cash management, depository
accounts (including chargebacks) or similar agreements. Without limiting the generality of the
foregoing, “Obligations” includes all amounts which would be owed by any Loan Party or any
other Person (other than Administrative Agent or Lenders) to Administrative Agent, Lenders or any
Affiliate of a Lender under any Loan Document, but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving any
Loan Party or any other Person (including all such amounts which would become due or would be
secured but for the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding of any other Loan Party or any other Person under any Bankruptcy
Law).



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



20









 




organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity.




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



     “Outsourcing Agreement” means that certain Master Services Agreement dated as of
November 2, 2009 among Broadridge and Borrower, including all schedules thereto, all as may be
amended, modified, restated or replaced.



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



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



     “PBGC” means the Pension Benefit Guaranty Corporation.



     “PCAOB” means the Public Company Accounting Oversight Board.



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



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



     “PFS” means Penson Financial Services, Inc., a North Carolina corporation.



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



     “Pledge Agreement” means that certain Amended and Restated Pledge Agreement executed
among the Borrower, certain Subsidiaries party thereto, and the Administrative Agent for the
benefit of the Lenders, as renewed, extended, amended or restated from time to time.



21









 





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



     “Regions Bank” means Regions Bank, and its successors.



     “Regions Capital Markets” means Regions Capital Markets, a division of Regions Bank,
and its successors.



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



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



     “Regulatory Capital” means net capital as defined in, and determined in accordance
with, Rule 15c3-1 of the Securities and Exchange Commission.



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



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



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



     “Required Lenders” means, as of any date of determination, Lenders having at least
66-2/3% of the Total Commitments or, if the commitment of each Lender to make Loans and the
obligation of the Letter of Credit Issuer to make Letter of Credit Extensions have been
terminated pursuant to Section 8.02, Lenders holding in the aggregate at least 66-2/3%
of the Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded
participation in Letter of Credit Obligations and Swing Line Loans being deemed “held” by such
Lender for purposes of this definition); provided that the Commitment of, and the portion
of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.



     “Responsible Officer” means the chief executive officer, president, chief financial
officer, executive vice president, chairman, vice chairman or treasurer of a Loan Party. Any
document



22









 




delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be
conclusively presumed to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed
to have acted on behalf of such Loan Party.




     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity Interest of the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on
account of any return of capital to the Borrower’s stockholders, partners or members (or the
equivalent Person thereof).



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



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



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



     “Ridge” means Ridge Clearing and Outsourcing Solutions, Inc., a subsidiary of
Broadridge.



     “Ridge Acquisition” means the Borrower’s acquisition of the correspondent clearing
contracts and associated assets of Ridge and the assumption of certain associated liabilities.



     “Sale and Leaseback Transaction” means any transaction providing for the leasing to
any Loan Party of any property or to any Person in exchange for funds which have been or are to be
advanced by such Person on the security of, or for the transfer of, such property.



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



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



     “Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of
1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and
practices promulgated, approved or incorporated by the SEC or the PCAOB.



     “Seller Notes” means those certain promissory notes executed by the Borrower payable
to the order of Broadridge or its Affiliates, as applicable, in order to finance a portion of the
Ridge Acquisition and to evidence the Seller Term Loan, in form and substance reasonably acceptable
to the Administrative Agent.



23









 





     “Seller Term Loan” means that certain loan in an amount not to exceed $30,000,000 (as
increased pursuant to the Asset Purchase Agreement, as long as such increases do not increase the
principal amount of the Seller Term Loan by more than $15,000,000) evidenced by a Seller Note
payable to the order of Ridge (or its designated affiliate) and maturing five years from the date
of such note’s execution.



     “Shareholders’ Equity” means, as of any date of determination, consolidated
shareholders’ equity of the Borrower and its Subsidiaries as of that date determined in accordance
with GAAP.



     “Short Term Subsidiary Indebtedness” means, with respect to the Broker Dealer
Subsidiaries, that certain Indebtedness incurred (a) for the purpose of purchasing Equity Interests
and other working capital purposes and (b) for the purpose of purchasing on a proprietary basis
commodities contracts, futures contracts, or Swap Contracts or options or other derivatives related
thereto in an aggregate net amount not to exceed $10,000,000, each in the ordinary course of
business consistent with such Broker Dealer Subsidiary’s historical practice.



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



     “Subordination Agreement” means a Subordination Agreement executed by the Borrower,
Broadridge, Ridge and the Administrative Agent in form and substance reasonably acceptable to the
Administrative Agent.



     “Subsidiary” of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares or securities or other
interests having ordinary voting power for the election of directors or other governing body (other
than securities or interests having such power only by reason of the happening of a contingency)
are
at the time beneficially owned, or the management of which is otherwise controlled, directly,
or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary
or Subsidiaries of the Borrower.



     “Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index



24









 




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




     “Swap Termination Value” means, in respect of any one or more Swap Contracts, after
taking into account the effect of any legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market
value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts (which may include a
Lender or any Affiliate of a Lender).



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



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



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



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



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



     “Syndication Agent” means The Privatebank and Trust Company, in its capacity as
Syndication Agent under any of the Loan Documents, or any successor syndication agents.



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




25











 





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



     “Threshold Amount” means $10,000,000.



     “Total Commitments” means the Commitments of all the Lenders in an aggregate amount up
to but not exceeding $75,000,000, as may be increased in accordance with Section 2.14(a).



     “Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
Letter of Credit Obligations.



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



     “Unencumbered Liquidity” shall mean the sum of (a) all cash, (b) Cash Equivalents and
(c) Investments and marketable securities in the ordinary course held by the Borrower and its
Material Subsidiaries that are not subject to any pledge, hypothecation, assignment as security for
Indebtedness, encumbrance, lien (statutory or otherwise), charge, or preference, priority or other
security interest or preferential arrangement of any kind or nature whatsoever provided,
however, in the case of valuation of clause (c), such Investments shall be reduced
as the Borrower reasonably determines in order to account for the risk of loss such Investment
poses, provided, further, such reductions shall not be less than 30% for any
Investment.



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



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



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



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




     (a) The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation.” The word “will” shall be construed to have the same meaning
and effect as the word “shall.” Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented, renewed, extended, increased,
reinstated, confirmed, rearranged or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan



26









 






Document), (ii) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (iii) the words “herein,” “hereof” and
“hereunder,” and words of similar import when used in any Loan Document, shall be
construed to refer to such Loan Document in its entirety and not to any particular provision
thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, the Loan Document in which such references appear, (v) any reference to any
law shall include all statutory and regulatory provisions consolidating, amending, replacing
or interpreting such law and any reference to any law or regulation shall, unless otherwise
specified, refer to such law or regulation as amended, modified or supplemented from time to
time, and (vi) the words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.




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




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




1.03 Accounting Terms.




     (a) Generally. All accounting terms not specifically or completely defined
herein shall be construed in conformity with, and all financial data (including financial
ratios and other financial calculations) required to be submitted pursuant to this Agreement
shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from
time to time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.




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




     (c) Consolidation of Variable Interest Entities. All references herein to
consolidated financial statements of the Borrower and its Subsidiaries or to the



27









 






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



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



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



     1.06 Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of
Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at
such time; provided, however, that with respect to any Letter of Credit that, by
its terms or the terms of any Issuer Document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all such increases,
whether or not such maximum stated amount is in effect at such time.



ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS




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



     2.02 Borrowings, Conversions and Continuations of Revolving Loans.




     (a) Each Revolving Borrowing, each conversion of Revolving Loans from one Type to the
other, and each continuation of LIBOR Rate Loans shall be made upon the Borrower’s
irrevocable notice to the Administrative Agent, which may be given by telephone. Each such
notice must be received by the Administrative Agent not later than



28









 






11:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of,
conversion to or continuation of LIBOR Rate Loans or of any conversion of LIBOR Rate Loans
to Base Rate Revolving Loans, and (ii) one Business Day prior to the requested date of any
Borrowing of Base Rate Revolving Loans. Each telephonic notice by the Borrower pursuant to
this Section 2.02(a) must be confirmed promptly by delivery to the Administrative
Agent of a written Revolving Loan Notice, appropriately completed and signed by a
Responsible Officer of the Borrower. Each Borrowing of, conversion to or continuation of
LIBOR Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of
$1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and
2.04(c), each Borrowing of or conversion to Base Rate Revolving Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each
Revolving Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower
is requesting a Revolving Borrowing, a conversion of Revolving Loans from one Type to the
other, or a continuation of LIBOR Rate Loans, (ii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Revolving Loans to be borrowed, converted or continued, (iv) the Type of
Revolving Loans to be borrowed or to which existing Revolving Loans are to be converted, and
(v) if applicable, the duration of the Interest Period with respect thereto. If the
Borrower fails to specify a Type of Revolving Loan in a Revolving Loan Notice or if the
Borrower fails to give a timely notice requesting a conversion or continuation, then the
applicable Revolving Loans shall be made as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable LIBOR Rate Loans. If the
Borrower requests a Borrowing of, conversion to, or continuation of LIBOR Rate Loans in any
such Revolving Loan Notice, but fails to specify an Interest Period, it will be deemed to
have specified an Interest Period of one month.




     (b) Following receipt of a Revolving Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Pro Rata Percentage of the applicable
Revolving Loans, and if no timely notice of a conversion or continuation is provided by the
Borrower, the Administrative Agent shall notify each Lender of the details of any automatic
conversion to Base Rate Loans described in the preceding subsection. In the case of a
Revolving Borrowing, each Lender shall make the amount of its Revolving Loan available to
the Administrative Agent in immediately available funds at the Administrative Agent’s Office
not later than 3:00 p.m. on the Business Day specified in the applicable Revolving Loan
Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02
(and, if such Borrowing is the initial Credit Extension, Section 4.01), the
Administrative Agent shall make all funds so received available to the Borrower in like
funds as received by the Administrative Agent either by (i) crediting the account of the
Borrower on the books of Regions Bank with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and reasonably
acceptable to) the Administrative Agent by the Borrower; provided, however,
that if, on the date the Revolving Loan Notice with respect to such Borrowing is given by
the Borrower, there are Swing Line Loans or Letter of
Credit Borrowings outstanding, then the proceeds of such Borrowing, shall be applied



29









 






first, to the payment in full of any such Letter of Credit Borrowings,
second, to the payment in full of such Swing Line Loans, and third, shall be
made available to the Borrower as provided above.




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




     (d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for LIBOR Rate Loans upon determination of
such interest rate.




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




2.03 Letters of Credit.




(a) The Letter of Credit Commitment.




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



30









 






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




     (A) the expiry date of such requested Letter of Credit would occur more
than twenty-four months after the date of issuance, unless the Required
Lenders have approved such expiry date; or




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




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




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




     (B) the issuance of such Letter of Credit would violate one or more
policies of the Letter of Credit Issuer applicable to letters of credit
generally;




     (C) except as otherwise agreed by the Administrative Agent and the
Letter of Credit Issuer, such Letter of Credit is in an initial stated
amount of less than $500,000;




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




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




     (F) a default of any Lender’s obligations to fund under Section
2.03(c) exists or any Lender is at such time a Defaulting Lender or
Impacted Lender hereunder, unless the Letter of Credit Issuer has entered



31









 






into satisfactory arrangements with the Borrower or such Lender to eliminate
the Letter of Credit Issuer’s risk with respect to such Lender.




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




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




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




(b) Procedures for Issuance and Amendment of Letters of Credit.




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



32









 






proposed date of amendment thereof (which shall be a Business Day); (Y) the
nature of the proposed amendment; and (Z) such other matters as the Letter of Credit
Issuer may require. Additionally, the Borrower shall furnish to the Letter of
Credit Issuer and the Administrative Agent such other documents and information
pertaining to such requested Letter of Credit issuance or amendment, including any
Issuer Documents, as the Letter of Credit Issuer or the Administrative Agent may
require.




     (ii) Promptly after receipt of any Letter of Credit Application, the Letter of
Credit Issuer will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has received a copy of such Letter of Credit
Application from the Borrower and, if not, the Letter of Credit Issuer will provide
the Administrative Agent with a copy thereof. Unless the Letter of Credit Issuer
has received written notice from any Lender, the Administrative Agent or any Loan
Party, at least one Business Day prior to the requested date of issuance or
amendment of the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the
terms and conditions hereof, the Letter of Credit Issuer shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or enter into the
applicable amendment, as the case may be, in each case in accordance with the Letter
of Credit Issuer’s usual and customary business practices. Immediately upon the
issuance of each Letter of Credit, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Letter of Credit Issuer
a risk participation in such Letter of Credit in an amount equal to the product of
such Lender’s Pro Rata Percentage times the amount of such Letter of Credit.




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




(c) Drawings and Reimbursements; Funding of Participations.




     (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of
a drawing under such Letter of Credit, the Letter of Credit Issuer shall notify the
Borrower and the Administrative Agent thereof. Not later than 11:00 a.m. on the
date of any payment by the Letter of Credit Issuer under a Letter of Credit (each
such date, an “Honor Date”), the Borrower shall reimburse the Letter of
Credit Issuer through the Administrative Agent in an amount equal to the
amount of such drawing. If the Borrower fails to so reimburse the Letter of
Credit Issuer by such time, the Administrative Agent shall promptly notify each
Lender of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Lender’s Pro Rata Percentage
thereof. In such event, the Borrower shall be deemed to have requested a Revolving
Borrowing of



33









 






Base Rate Loans to be disbursed on the Honor Date in an amount equal to
the Unreimbursed Amount, without regard to the minimum and multiples specified in
Section 2.02 for the principal amount of Base Rate Loans, but subject to the
amount of the unutilized portion of the Total Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Revolving Loan Notice).
Any notice given by the Letter of Credit Issuer or the Administrative Agent pursuant
to this Section 2.03(c)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such notice.




     (ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i)
make funds available to the Administrative Agent for the account of the Letter of
Credit Issuer at the Administrative Agent’s Office in an amount equal to its Pro
Rata Percentage of the Unreimbursed Amount not later than 3:00 p.m. on the Business
Day specified in such notice by the Administrative Agent, whereupon, subject to the
provisions of Section 2.03(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Base Rate Revolving Loan to the Borrower in
such amount. The Administrative Agent shall remit the funds so received to the
Letter of Credit Issuer.




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




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




     (v) Each Lender’s obligation to make Revolving Loans or Letter of Credit
Advances to reimburse the Letter of Credit Issuer for amounts drawn under Letters of
Credit, as contemplated by this Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such Lender may have
against the Letter of Credit Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any



34









 






other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided, however, that each Lender’s obligation to make Revolving
Loans pursuant to this Section 2.03(c) is subject to the conditions set
forth in Section 4.02 (other than delivery by the Borrower of a Revolving
Loan Notice). No such making of a Letter of Credit Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse the Letter of Credit
Issuer for the amount of any payment made by the Letter of Credit Issuer under any
Letter of Credit, together with interest as provided herein.




     (vi) If any Lender fails to make available to the Administrative Agent for the
account of the Letter of Credit Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the time
specified in Section 2.03(c)(ii), the Letter of Credit Issuer shall be
entitled to recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such payment
is required to the date on which such payment is immediately available to the Letter
of Credit Issuer at a rate per annum equal to the greater of the Federal Funds Rate
and a rate determined by the Letter of Credit Issuer in accordance with banking
industry rules on interbank compensation, plus any administrative, processing or
similar fees customarily charged by the Letter of Credit Issuer in connection with
the foregoing. If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Lender’s Revolving Loan
included in the relevant Revolving Borrowing or Letter of Credit Advance in respect
of the relevant Letter of Credit Borrowing, as the case may be. A certificate of
the Letter of Credit Issuer submitted to any Lender (through the Administrative
Agent) with respect to any amounts owing under this clause (vi) shall be conclusive
absent manifest error.




(d) Repayment of Participations.




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




     (ii) If any payment received by the Administrative Agent for the account of the
Letter of Credit Issuer pursuant to Section 2.03(c)(i) is required to be
returned under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the Letter of Credit Issuer in
its discretion), each Lender shall pay to the Administrative Agent for the account
of the Letter of Credit Issuer its Pro Rata Percentage thereof on demand of the



35









 






Administrative Agent, plus interest thereon from the date of such demand to the date
such amount is returned by such Lender, at a rate per annum equal to the Federal
Funds Rate from time to time in effect. The obligations of the Lenders under this
clause shall survive the payment in full of the Obligations and the termination of
this Agreement.




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




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




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




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




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




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




     The Borrower shall promptly examine a copy of each Letter of Credit and each amendment
thereto that is delivered to it and, in the event of any claim of noncompliance with the
Borrower’s instructions or other irregularity, the Borrower will promptly notify



36









 






the Letter
of Credit Issuer. The Borrower shall be conclusively deemed to have waived any such claim
against the Letter of Credit Issuer and its correspondents unless such notice is given as
aforesaid.




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




     (g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the
Letter of Credit Issuer has honored any full or partial drawing request under any Letter of
Credit and such drawing has resulted in a Letter of Credit Borrowing, or (ii) if, as of the
Letter of Credit Expiration Date, any Letter of Credit Obligation for any reason remains
outstanding, the Borrower shall, in each case, immediately Cash Collateralize the then
Outstanding Amount of all Letter of Credit Obligations, in the case of clause (i),
until



37









 






such Letter of Credit Borrowing has been repaid or refinanced. Upon the request of
the Administrative Agent, if any Lender shall be an Impacted Lender and any Letter of Credit
Obligation for any reason remains outstanding, the Borrower shall immediately Cash
Collateralize the outstanding Letter of Credit Obligations in an amount equal to the pro
rata share of such Impacted Lender’s Outstanding Amount of Letter of Credit Obligations.
Sections 2.05 and 8.02(c) set forth certain additional requirements to
deliver Cash Collateral hereunder. For purposes of this Section 2.03, Section
2.05 and Section 8.02(c), “Cash Collateralize” means to pledge and
deposit with or deliver to the Administrative Agent, for the benefit of the Letter of Credit
Issuer and the Lenders, as collateral for the Letter of Credit Obligations, cash or deposit
account balances pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the Letter of Credit Issuer (which documents are hereby consented
to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower
hereby grants to the Administrative Agent, for the benefit of the Letter of Credit Issuer
and the Lenders, a security interest in all such cash, deposit accounts and all balances
therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked,
non-interest bearing deposit accounts at Regions Bank.




     (h) Applicability of ISP. Unless otherwise expressly agreed by the Letter of
Credit Issuer and the Borrower when a Letter of Credit is issued, the rules of the ISP shall
apply to each Letter of Credit.




     (i) Letter of Credit Fees and Fronting Fees. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its Pro Rata
Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of
Credit equal to the Applicable Margin for LIBOR Rate Loans and Letters of Credit
times the daily amount available to be drawn under such Letter of Credit. In
addition to the Letter of Credit Fee, the Borrower shall pay the Letter of Credit Issuer,
for its own account, a fronting fee (the “Fronting Fee”) equal to 0.15% per annum of
the amount available to be drawn under any outstanding Letter of Credit. For purposes of
computing the daily amount available to be drawn under any Letter of Credit, the amount of
such Letter of Credit shall be determined in accordance with Section 1.06. Letter
of Credit Fees and Fronting Fees shall be (i) due and payable on the last Business Day of
each March, June, September and December, commencing with the first such date to occur after
the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and
thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any
change in the
Applicable Margin for LIBOR Rate Loans and Letters of Credit during any quarter, the
daily amount available to be drawn under each standby Letter of Credit shall be computed and
multiplied by the appropriate Applicable Margin separately for each period during such
quarter that such Applicable Margin was in effect.  Notwithstanding anything to
the contrary contained herein, upon the request of the Required Lenders, while any Event of
Default exists, all Letter of Credit Fees and Fronting Fees shall accrue at the Default
Rate.




     (j) Documentary and Processing Charges Payable to Letter of Credit Issuer. In
addition to any other fees described herein, the Borrower shall pay directly to the



38









 






Letter
of Credit Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the Letter of Credit Issuer
relating to letters of credit as from time to time in effect. Such customary fees and
standard costs and charges are due and payable on demand and are nonrefundable.




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




2.04 Swing Line Loans.




     (a) The Swing Line. Subject to the terms and conditions set forth herein, the
Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set forth in
this Section 2.04, to make loans (each such loan, a “Swing Line Loan”) to
the Borrower from time to time on any Business Day during the Availability Period in an
aggregate amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Pro
Rata Percentage of the Outstanding Amount of Revolving Loans and Letter of Credit
Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such
Lender’s Commitment; provided, however, that after giving effect to any
Swing Line Loan, (i) the Total Outstandings shall not exceed the Total Commitments, and (ii)
the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such
Lender’s Pro Rata Percentage of the Outstanding Amount of all Letter of Credit Obligations,
plus such Lender’s Pro Rata Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Lender’s Commitment, and provided, further, that the
Borrower shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan. Within the foregoing limits, and subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.04, prepay under Section
2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a
Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing
Line Lender a risk participation in such Swing Line Loan in an amount equal to the product
of such Lender’s Pro Rata Percentage times the amount of such Swing Line Loan.




     (b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the
Borrower’s irrevocable notice to the Swing Line Lender and the Administrative Agent, which
may be given by telephone. Each such notice must be received by the Swing Line Lender and
the Administrative Agent not later than 1:00 p.m. on the requested borrowing date, and shall
specify (i) the amount to be borrowed, which shall be a minimum of $100,000, and (ii) the
requested borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a
written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer
of the Borrower. Promptly after receipt by the Swing Line Lender of any telephonic Swing
Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has also received such Swing Line
Loan Notice



39









 






and, if not, the Swing Line Lender will notify the Administrative Agent (by
telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at the request
of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line Borrowing (A)
directing the Swing Line Lender not to make such Swing Line Loan as a result of the
limitations set forth in the proviso to the first sentence of Section 2.04(a), or
(B) that one or more of the applicable conditions specified in Article IV is not
then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender
will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower.




(c) Refinancing of Swing Line Loans.




     (i) The Swing Line Lender, at any time, in its sole and absolute discretion may
request, on behalf of the Borrower (which hereby irrevocably authorizes the Swing
Line Lender to so request on its behalf), that each Lender make a Base Rate
Revolving Loan in an amount equal to such Lender’s Pro Rata Percentage of the amount
of Swing Line Loans then outstanding. Such request shall be made in writing (which
written request shall be deemed to be a Revolving Loan Notice for purposes hereof)
and in accordance with the requirements of Section 2.02, without regard to
the minimum and multiples specified therein for the principal amount of Base Rate
Loans, but subject to the unutilized portion of the Total Commitments and the
conditions set forth in Section 4.02. The Swing Line Lender shall furnish
the Borrower with a copy of the applicable Revolving Loan Notice promptly after
delivering such notice to the Administrative Agent. Each Lender shall make an
amount equal to its Pro Rata Percentage of the amount specified in such Revolving
Loan Notice available to the Administrative Agent in immediately available funds for
the account of the Swing Line Lender at the Administrative Agent’s Office not later
than 3:00 p.m. on the day specified in such Revolving Loan Notice, whereupon,
subject to Section 2.04(c)(ii), each Lender that so makes funds available
shall be deemed to have made a Base Rate Revolving Loan to the Borrower in such
amount. The Administrative Agent shall remit the funds so received to the Swing
Line Lender.




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




     (iii) If any Lender fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.04(c) by the time



40









 






specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand, such
amount with interest thereon for the period from the date such payment is required
to the date on which such payment is immediately available to the Swing Line Lender
at a rate per annum equal to the greater of the Federal Funds Rate and a rate
determined by the Swing Line Lender in accordance with banking industry rules on
interbank compensation, plus any administrative, processing or similar fees
customarily charged by the Swing Line Lender in connection with the foregoing. If
such Lender pays such amount (with interest and fees as aforesaid), the amount so
paid shall constitute such Lender’s Revolving Loan included in the relevant
Revolving Borrowing or funded participation in the relevant Swing Line Loan, as the
case may be. A certificate of the Swing Line Lender submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this
clause (iii) shall be conclusive absent manifest error.




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




(d) Repayment of Participations.




     (i) At any time after any Lender has purchased and funded a risk participation
in a Swing Line Loan, if the Swing Line Lender receives any payment on account of
such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Pro Rata Percentage thereof in the same funds as
those received by the Swing Line Lender.




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



41









 






Lenders under this clause shall survive
the payment in full of the Obligations and the termination of this Agreement.




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




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




2.05 Prepayments and Mandatory Prepayments.




     (a) The Borrower may, upon notice to the Administrative Agent, at any time or from time
to time voluntarily prepay Revolving Loans in whole or in part without premium or penalty;
provided that (i) such notice must be received by the Administrative Agent not later
than 11:00 a.m. (A) three Business Days prior to any date of prepayment of LIBOR Rate Loans
and (B) on the date of prepayment of Base Rate Revolving Loans; (ii) any prepayment of LIBOR
Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in
excess thereof; and (iii) any prepayment of Base Rate Revolving Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof or, in each
case, if less, the entire principal amount thereof then outstanding. Each such notice shall
specify the date and amount of such prepayment and the Type(s) of Revolving Loans to be
prepaid and, if LIBOR Rate Loans are to be prepaid, the Interest Period(s) of such Loans.
The Administrative Agent will promptly notify each Lender of its receipt of each such
notice, and of the amount of such Lender’s Pro Rata Percentage of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified therein. Any
prepayment of a LIBOR Rate Loan shall be accompanied by all accrued interest on the amount
prepaid, together with
any additional amounts required pursuant to Section 3.05. Each such prepayment
shall be applied to the Revolving Loans of the Lenders in accordance with their respective
Pro Rata Percentages.




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



42









 






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




     (d) Upon the Disposition of assets by the Borrower or any Subsidiary as permitted in
Section 7.05(c) (for the avoidance of doubt, JBO Stock and Equity Interests shall
not be considered assets for purposes of this subsection (d)) 100% of the Net Cash
Proceeds shall be paid within two Business Days to the Administrative Agent to be applied to
the Loans, and the Total Commitments shall be permanently reduced by the amount of the Net
Cash Proceeds of such Disposition provided, however, that, with respect to
any Net Cash Proceeds realized under a Disposition described in this Section
2.05(d), at the election of the Borrower (as notified by the Borrower to the
Administrative Agent on or prior to the date of such Disposition), and so long as no Default
shall have occurred and be continuing, the Borrower or such Subsidiary may reinvest all or
any portion of such Net Cash Proceeds in operating assets (including investments in capital
of Subsidiaries) so long as within 90 days after the receipt of such Net Cash Proceeds, such
purchase shall have been consummated (as certified by the Borrower in writing to the
Administrative Agent); and provided further, however, that any Net
Cash Proceeds not subject to such definitive agreement or so reinvested by such time shall
be immediately applied to the prepayment of the Loans as set forth in this Section
2.05(d) along with a corresponding permanent reduction to the Total Commitments. The
provisions of this Section do not constitute a consent to the consummation of any
Disposition not otherwise permitted in Section 7.05.




     (e) Upon the issuance of any Indebtedness by the Borrower or any Subsidiary not
otherwise permitted in Section 7.03, 100% of the Net Cash Proceeds shall be
immediately paid to the Administrative Agent to be applied to the Loans, and the Total
Commitments shall be permanently reduced by the amount of the Net Cash Proceeds of such
issuance. The provisions of this Section do not constitute a consent to the issuance of any
Indebtedness not otherwise permitted in Section 7.03.




     (f) If at any time the Consolidated Leverage Ratio is greater than **** to ****as set
forth in the most recent Compliance Certificate received by the Administrative Agent
pursuant to Section 6.02(a), there shall be a period of at least thirty (30)
consecutive days during the six-month period following delivery of such Compliance
Certificate (the “Clean Down Period”) during which (i) the Total Outstandings shall
be zero and (ii) no additional Loans shall be made and no Letters of Credit shall be issued;
provided, however, that the Clean Down Period shall terminate prior to the
end of such six-month period if and at such time as the Borrower submits its regularly
scheduled quarterly Compliance Certificate evidencing that the Consolidated Leverage Ratio
is less than or equal to **** to ****.




43












 






     (g) Each prepayment under this Section 2.05 shall be accompanied by
accrued interest on the amount prepaid to the date of such prepayment and amounts, if any,
required to be paid pursuant to Section 3.05.



     2.06 Termination or Reduction of Commitments. The Borrower may, upon notice to the
Administrative Agent, terminate the Total Commitments, or from time to time permanently reduce the
Total Commitments; provided that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to the date of termination
or reduction, (ii) any such partial reduction shall be in an aggregate amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not terminate or reduce
the Total Commitments if, after giving effect thereto and to any concurrent prepayments hereunder,
the Total Outstandings would exceed the Total Commitments, and (iv) if, after giving effect to any
reduction of the Total Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit
exceeds the amount of the Total Commitments, such Sublimit shall be automatically reduced by the
amount of such excess. The Administrative Agent will promptly notify the Lenders of any such
notice of termination or reduction of the Total Commitments. Any reduction of the Total
Commitments shall be applied to the Commitment of each Lender according to its Pro Rata Percentage.
All fees accrued until the effective date of any termination of the Total Commitments shall be
paid on the effective date of such termination. Notwithstanding the foregoing, for the avoidance
of doubt but without prejudice to the right of the Borrower to terminate or permanently reduce the
Total Commitments pursuant to Section 2.06, if the Total Commitments are reduced to zero
due to mandatory prepayments pursuant to Section 2.05(e), the revolving credit facility
hereunder shall not automatically terminate and shall terminate only upon the written request of
the Borrower or the Administrative Agent.



     2.07 Repayment of Loans.




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




     (b) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) unless
otherwise refinanced as a Revolving Loan pursuant to Section 2.04(c), the date five
Business Days after such Loan is made and (ii) the Maturity Date.



     2.08 Interest.




     (a) Subject to the provisions of subsection (b) below, (i) each LIBOR Rate Loan shall
bear interest on the outstanding principal amount thereof for each Interest Period at a rate
per annum equal to the lesser of (A) the LIBOR Rate for such Interest Period plus
the Applicable Margin or (B) the Maximum Rate; (ii) each Base Rate Revolving Loan shall bear
interest on the outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the lesser of (A) the Base Rate plus the Applicable Margin
or (B) the Maximum Rate; and (iii) each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable



44









 






borrowing date at a rate per annum equal to the lesser of (A) the Base Rate
plus the Applicable Margin or (B) the Maximum Rate.




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




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




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




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




     (c) Interest on each Loan shall be due and payable in arrears on each Interest Payment
Date applicable thereto and at such other times as may be specified herein. Interest
hereunder shall be due and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under any Bankruptcy Law.



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




     (a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the
account of each Lender in accordance with its Pro Rata Percentage, a commitment fee equal to
the Applicable Margin times the actual daily amount by which the Total Commitments
exceed the sum of (i) the Outstanding Amount of Revolving Loans and (ii) the Outstanding
Amount of Letter of Credit Obligations. The commitment fee shall accrue at all times during
the Availability Period, including at any time during which one or more of the conditions in
Article IV is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the first such
date to occur after the Closing Date, and on the last day of the Availability Period. The
commitment fee shall be calculated quarterly in arrears, and if there is any change in the
Applicable Margin during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Margin separately for each period during such quarter that such
Applicable Margin was in effect.



45









 






     (b) Other Fees.




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




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



     2.10 Computation of Interest and Fees.




     (a) All computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable, being paid
than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof,
for the day on which the Loan or such portion is paid, provided that any Loan that
is repaid on the same day on which it is made shall, subject to Section 2.12(a),
bear interest for one day. Each determination by the Administrative Agent of an interest
rate or fee hereunder shall be presumptive evidence of such rate or fee, absent manifest
error.




     (b) If, as a result of any restatement of or other adjustment to the financial
statements of the Borrower, the Borrower or the Required Lenders determine in good faith
that (i) the Consolidated Leverage Ratio as calculated by the Borrower as of any applicable
date was inaccurate and (ii) a proper calculation of the Consolidated Leverage Ratio would
have resulted in higher pricing for such period, the Borrower shall immediately and
retroactively be obligated to pay to the Administrative Agent for the account of the
applicable Lenders, promptly on demand by the Administrative Agent (or, after the occurrence
of an actual or deemed entry of an order for relief with respect to the Borrower under the
Bankruptcy Laws, automatically and without further action by the Administrative Agent or any
Lender), an amount equal to the excess of the amount of interest and fees that should have
been paid for such period over the amount of interest and fees actually paid for such
period. This paragraph shall not limit the rights of the Administrative Agent or any Lender
under any other provision of this Agreement. The Borrower’s obligations under this
paragraph shall survive the termination of the Total Commitments and the repayment of all
other Obligations hereunder for a period of one year.



     2.11 Evidence of Debt.




     (a) The Credit Extensions made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the



46









 






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




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



     2.12 Payments Generally; Administrative Agent’s Clawback.




     (a) General. All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to
the Administrative Agent, for the account of the respective Lenders to which such payment is
owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not
later than 2:00 p.m. on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Pro Rata Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such Lender’s Lending
Office. All payments received by the Administrative Agent after 2:00 p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or fee shall
continue to accrue. If any payment to be made by the Borrower shall come due on a day other
than a Business Day, payment shall be made on the next following Business Day, and such
extension of time shall be reflected in computing interest or fees, as the case may be.




(b) (i) Funding by Lenders; Presumption by Administrative Agent. Unless the
Administrative Agent shall have received notice from a Lender prior to the proposed
date of any Revolving Borrowing of LIBOR Loans (or, in the case of any Revolving
Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Revolving
Borrowing) that such Lender will not make available to the Administrative Agent such
Lender’s share of such Revolving Borrowing, the Administrative Agent may assume that
such Lender has made such share



47









 






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




     (ii) Payments by Borrower; Presumptions by Administrative Agent.
Unless the Administrative Agent shall have received notice from the Borrower prior
to the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the Letter of Credit Issuer hereunder that the Borrower will not
make such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Letter of Credit Issuer, 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 Letter of Credit Issuer, as the case may
be, severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or the Letter of Credit Issuer, in immediately
available funds with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on interbank
compensation.




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




     (c) Failure to Satisfy Conditions Precedent. If any Lender makes available to
the Administrative Agent funds for any Loan to be made by such Lender as provided in
the foregoing provisions of this Article II, and such funds are not made
available to the Borrower by the Administrative Agent because the conditions to the
applicable Credit



48









 






Extension set forth in Article IV are not satisfied or waived in
accordance with the terms hereof, the Administrative Agent shall return such funds (in like
funds as received from such Lender) to such Lender, without interest.




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




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



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




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




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



     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



49









 




arrangements may exercise against the Borrower rights of setoff 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.




     2.14 Increase in Commitments.




     (a) Request for Increase. Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower may, no more
than two times through the Maturity Date, request an increase in the Total Commitments by an
aggregate amount not exceeding $50,000,000; provided that any such request for an
increase shall be in a minimum amount of $5,000,000. At the time of sending such notice,
the Borrower (in consultation with the Administrative Agent) shall specify the time period
within which each Lender is requested to respond (which shall in no event be less than ten
Business Days from the date of delivery of such notice to the Lenders).




     (b) Lender Elections to Increase. Each Lender shall notify the Administrative
Agent within such time period whether or not it agrees to increase its Commitment and, if
so, whether by an amount equal to, greater than, or less than its Pro Rata Percentage of
such requested increase. Any Lender not responding within such time period shall be deemed
to have declined to increase its Commitment. No Lender shall be under any obligation to
elect to increase its Commitment.




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




     (d) Effective Date and Allocations. If the Total Commitments are increased in
accordance with this Section, the Administrative Agent and the Borrower shall determine the
effective date (the “Increase Effective Date”) and the final allocation of such
increase. The Administrative Agent shall promptly notify the Borrower and the Lenders of
the final allocation of such increase and the Increase Effective Date.




     (e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan
Party dated as of the Increase Effective Date (in sufficient copies for each Lender) signed
by a Responsible Officer of such Loan Party (i) certifying and attaching the resolutions
adopted by such Loan Party approving or consenting to such increase, and (ii) in the case of
the Borrower, certifying that, before and after giving effect to such
increase, (A) the representations and warranties contained in Article V and the
other Loan Documents are true and correct on and as of the Increase Effective Date, except
to the



50









 






extent that such representations and warranties specifically refer to an earlier
date, in which case they are true and correct as of such earlier date, and except that for
purposes of this Section 2.14, the representations and warranties contained in
subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01,
and (B) no Default exists. The Borrower shall prepay any Revolving Loans outstanding on the
Increase Effective Date (and pay any additional amounts required pursuant to Section
3.05) to the extent necessary to keep the outstanding Revolving Loans ratable with any
revised Pro Rata Percentages arising from any nonratable increase in the Commitments under
this Section.




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



     2.15 Extension of Maturity Date.




     (a) Requests for Extension. The Borrower may, by notice to the Administrative
Agent (who shall promptly notify the Lenders) not earlier than 45 days and not later than 35
days prior to the Maturity Date then in effect hereunder (the “Existing Maturity
Date”), request that each Lender extend such Lender’s Maturity Date for an additional
364 days from the Existing Maturity Date. The Borrower may request no more than two such
extensions of the Maturity Date.




     (b) Lender Elections to Extend. Each Lender, acting in its sole and individual
discretion, shall, by notice to the Administrative Agent given not earlier than 30 days
prior to the Existing Maturity Date and not later than the date (the “Notice Date”)
that is 20 days prior to the Existing Maturity Date, advise the Administrative Agent whether
or not such Lender agrees to such an extension of the Maturity Date for such Lender’s Loans
and Commitments (each Lender that determines not to so extend its Maturity Date shall be
referred to as a “Non-Extending Lender”), and any Lender that does not so advise the
Administrative Agent on or before the Notice Date shall be deemed to be a Non-Extending
Lender. The election of any Lender to agree to such extension shall not obligate any other
Lender to so agree.




     (c) Notification by Administrative Agent. The Administrative Agent shall
notify the Borrower of each Lender’s determination under this Section no later than the date
15 days prior to the Existing Maturity Date (or, if such date is not a Business Day, on the
next preceding Business Day).




     (d) Additional Commitment Lenders. The Borrower shall have the right to
replace each Non-Extending Lender with, and add as “Lenders” under this Agreement in place
thereof, one or more Eligible Assignees (each, an “Additional Commitment Lender”) as
provided in Section 10.06; provided that each of such Additional Commitment
Lenders shall enter into an Assignment and Assumption pursuant to which such Additional
Commitment Lender shall, effective as of the Existing Maturity Date,
undertake a Commitment (and, if any such Additional Commitment Lender is already a



51









 






Lender, its Commitment shall be in addition to such Lender’s Commitment hereunder on such
date).




     (e) Minimum Extension Requirement. If (and only if) the total of the
Commitments of the Lenders that have agreed so to extend their Maturity Date (each, an
“Extending Lender”) and the additional Commitments of the Additional Commitment
Lenders shall be more than 66-2/3% of the aggregate amount of the Commitments in effect
immediately prior to the Existing Maturity Date, then, effective as of the Existing Maturity
Date, the Maturity Date of each Extending Lender and of each Additional Commitment Lender
shall be extended to the date falling 364 days after the Existing Maturity Date (except
that, if such date is not a Business Day, such Maturity Date as so extended shall be the
next preceding Business Day) and each Additional Commitment Lender shall thereupon become a
“ Lender” for all purposes of this Agreement.




     (f) Conditions to Effectiveness of Extensions. As a condition precedent to
such extension, the Borrower shall deliver to the Administrative Agent a certificate of each
Loan Party dated as of the Existing Maturity Date (in sufficient copies for each Extending
Lender and each Additional Commitment Lender) signed by a Responsible Officer of such Loan
Party (i) certifying and attaching the resolutions adopted by such Loan Party approving or
consenting to such extension and (ii) in the case of the Borrower, certifying that, before
and after giving effect to such extension, (A) the representations and warranties contained
in Article V and the other Loan Documents are true and correct on and as of the
Existing Maturity Date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct as of such
earlier date, and except that for purposes of this Section 2.14, the representations
and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed
to refer to the most recent statements furnished pursuant to subsections (a) and (b),
respectively, of Section 6.01, and (B) no Default exists. In addition, on the
Maturity Date of each Non-Extending Lender, the Borrower shall repay such Non-Extending
Lender’s Revolving Loans (except to the extent assigned to an Extending Lender or Additional
Commitment Lender) and shall prepay Revolving Loans of the Extending Lenders and Additional
Commitment Lenders outstanding on such date (and pay any additional amounts required
pursuant to Section 3.05) to the extent necessary to keep outstanding Revolving
Loans ratable with any revised Pro Rata Percentages of the respective Extending Lenders and
Additional Commitment Lenders effective as of such date.




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



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ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY




     3.01 Taxes.




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




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




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




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




     (e) Status of Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which the Borrower
is resident for tax purposes, or any treaty to which such jurisdiction is a party, with
respect to payments hereunder or under any other Loan Document shall deliver to



53









 






the Borrower (with a copy to the Administrative Agent), at the time or times prescribed
by applicable Law or reasonably requested by the Borrower or the Administrative Agent, such
properly completed and executed documentation prescribed by applicable Law as will permit
such payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent, shall
deliver such other documentation prescribed by applicable Law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent
to determine whether or not such Lender is subject to backup withholding or information
reporting requirements.




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




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




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




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




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




     (f) Treatment of Certain Refunds. If the Administrative Agent, any Lender or
the Letter of Credit Issuer determines, in its reasonable discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or
with respect to which the Borrower has paid additional amounts pursuant to this Section, it
shall pay to the Borrower an amount equal to such refund (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this Section with
respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, such Lender or the Letter of



54









 






Credit Issuer, as the case may be, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund), provided that
the Borrower, upon the request of the Administrative Agent, such Lender or the Letter of
Credit Issuer, agrees to repay the amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the Letter of Credit Issuer in the event the
Administrative Agent, such Lender or the Letter of Credit Issuer is required to repay such
refund to such Governmental Authority. This subsection shall not be construed to require
the Administrative Agent, any Lender or the Letter of Credit Issuer to make available its
tax returns (or any other information relating to its taxes that it deems confidential) to
the Borrower or any other Person.



     3.02 Illegality. If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending
Office to make, maintain or fund LIBOR Rate Loans, or to determine or charge interest rates based
upon the LIBOR Rate, or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative
Agent, any obligation of such Lender to make or continue LIBOR Rate Loans or to convert Base Rate
Revolving Loans to LIBOR Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all LIBOR Rate Loans of such
Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such LIBOR Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such LIBOR Rate Loans. Upon any such prepayment or
conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.



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



55









 





     3.04 Increased Costs.




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




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




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




     (iii) impose on any Lender or the Letter of Credit Issuer or the London
interbank market any other condition, cost or expense affecting this Agreement or
LIBOR Rate 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 maintaining any LIBOR Rate Loan (or of maintaining its obligation to make any such
Loan), or to increase the cost to such Lender or the Letter of Credit Issuer of
participating in, issuing or maintaining any Letter of Credit (or of maintaining its
obligation to participate in or to issue any Letter of Credit), or to reduce the amount of
any sum received or receivable by such Lender or the Letter of Credit Issuer hereunder
(whether of principal, interest or any other amount) then, upon request of such Lender or
the Letter of Credit Issuer, the Borrower will pay to such Lender or the Letter of Credit
Issuer, as the case may be, such additional amount or amounts as will compensate such Lender
or the Letter of Credit Issuer, as the case may be, for such additional costs incurred or
reduction suffered.




     (b) Capital Requirements. If any Lender or the Letter of Credit Issuer
determines that any Change in Law affecting such Lender or the Letter of Credit Issuer or
any Lending Office of such Lender or such Lender’s or the Letter of Credit Issuer’s holding
company, if any, regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender’s or the Letter of Credit Issuer’s capital or on the capital
of such Lender’s or the Letter of Credit Issuer’s holding company, if any, as a consequence
of this Agreement, the Commitments of such Lender or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the Letter of
Credit Issuer, to a level below that which such Lender or the Letter of Credit Issuer or
such Lender’s or the Letter of Credit Issuer’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or the



56









 






Letter of Credit Issuer’s policies and the policies of such Lender’s or the Letter of
Credit Issuer’s holding company with respect to capital adequacy), then from time to time
the Borrower will pay to such Lender or the Letter of Credit Issuer, as the case may be,
such additional amount or amounts as will compensate such Lender or the Letter of Credit
Issuer or such Lender’s or the Letter of Credit Issuer’s holding company for any such
reduction suffered.




     (c) Certificates for Reimbursement. A certificate of a Lender or the Letter of
Credit Issuer setting forth the amount or amounts necessary to compensate such Lender or the
Letter of Credit Issuer or its holding company, as the case may be, as specified in
subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive
absent manifest error. The Borrower shall pay such Lender or the Letter of Credit Issuer,
as the case may be, the amount shown as due on any such certificate within 10 days after
receipt thereof.




     (d) Delay in Requests. Failure or delay on the part of any Lender or the
Letter of Credit Issuer to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Lender’s or the Letter of Credit Issuer’s
right to demand such compensation, provided that the Borrower shall not be required
to compensate a Lender or the Letter of Credit Issuer pursuant to the foregoing provisions
of this Section for any increased costs incurred or reductions suffered more than nine
months prior to the date that such Lender or the Letter of Credit Issuer, as the case may
be, notifies the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or the Letter of Credit Issuer’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the nine-month period referred to above shall be extended
to include the period of retroactive effect thereof).




     (e) Reserves on LIBOR Rate Loans. The Borrower shall pay to each Lender, as
long as such Lender shall be required to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently known as
“Eurocurrency liabilities”), additional interest on the unpaid principal amount of each
LIBOR Rate Loan equal to the actual costs of such reserves allocated to such Loan by such
Lender (as determined by such Lender in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest is payable on
such Loan, provided the Borrower shall have received at least 10 days’ prior notice
(with a copy to the Administrative Agent) of such additional interest from such Lender. If
a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 10 days from receipt of such notice.



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



57









 






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




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




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


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



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




     3.06 Mitigation Obligations; Replacement of Lenders.




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




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



58









 





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



ARTICLE IV.

CONDITIONS PRECEDENT TO CLOSING




     4.01 Conditions of Closing of Credit Agreement. The obligation of the Letter of Credit Issuer
and each Lender to make Credit Extensions hereunder following the closing of the Credit Agreement
is subject to satisfaction of the following conditions precedent on or prior to the Closing Date:




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




     (i) executed counterparts of this Agreement, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;




     (ii) a Note executed by the Borrower in favor of each Lender requesting a Note;




     (iii) a Pledge Agreement executed by the Borrower and its Subsidiaries (as
required by this Agreement) in favor of the Administrative Agent for the benefit of
the Lenders and evidence that a first priority lien has been granted in all
collateral covered by such Pledge Agreement in favor of the Administrative Agent;




     (iv) stock certificates, if any, for 100% of all voting Equity Interests of
each Material Domestic Subsidiary and for 65% of all voting Equity Interests of each
Material Foreign Subsidiary and stock powers, sufficient in number for distribution
to the Administrative Agent, each Lender and the Borrower; it being understood that
such pledged stock shall not include JBO Stock;




     (v) a Guaranty executed by each Guarantor in favor of the Administrative Agent
and Lenders;




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



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




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




     (ix) copies of central filing UCC searches of the Borrower and its
Subsidiaries, each such search showing no Liens except Liens permitted pursuant to
Section 7.01;




     (x) a certificate of a Responsible Officer of each Loan Party either (A)
attaching copies of all consents, licenses and approvals (other than Board
approvals) required in connection with the execution, delivery and performance by
such Loan Party and the validity against such Loan Party of the Loan Documents to
which it is a party, and such consents, licenses and approvals shall be in full
force and effect, or (B) stating that no such consents, licenses or approvals (other
than Board approvals) are so required with respect thereto;




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




     (xii) evidence that all insurance required to be maintained pursuant to the
Loan Documents has been obtained and is in effect;




     (xiii) the Audited Financial Statements and quarterly financial statements
required under Section 6.01(b) for the fiscal quarter ended December 31,
2009;




     (xiv) financial projections of the Borrower’s consolidated operations
including, on a quarterly basis, quarterly balance sheets, income statements and
statements of cash flows of the Borrower and its Subsidiaries;




     (xiv) an organizational chart of the Borrower and its Subsidiaries;



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     (xv) a Compliance Certificate, duly and properly executed by the chief
executive officer, chief financial officer, treasurer or controller of the Borrower
dated the date hereof but with all calculations made as of March 31, 2010;




     (xvi) executed counterparts of the Intercreditor Agreement;




     (xvii) a copy of each 2017 Notes Offering Document and each other document
relating to the 2017 Notes Offering as reasonably requested by Administrative Agent;




     (xviii) evidence that all conditions precedent to the closing of the 2017 Notes
Offering shall have been completed; and




     (xix) such other assurances, certificates, documents, consents or opinions as
the Administrative Agent, the Letter of Credit Issuer, the Swing Line Lender or the
Required Lenders reasonably may require.




     (b) Any fees required to be paid on or before the Closing Date shall have been paid,
including those fees required to be paid in the Fee Letter.




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




     (d) Except as disclosed in the Borrower’s public securities filings, since the Audited
Financial Statements, there shall not have occurred (i) any event, development, or
circumstance that has caused or would reasonably be expected to cause a Material Adverse
Effect, or (ii) any event, development, or circumstance that has caused or would reasonably
be expected to cause the projections previously provided in Section 4.01(a)(xv) or
any of the material assumptions on which such projections were prepared to be materially
incorrect so as to render such projections materially incorrect.




     (e) Except as disclosed in the Borrower’s public securities filings, no action, suit,
investigation or proceeding pending or, to the knowledge of the Borrower, threatened in any
court or before any arbitrator or governmental authority against the Borrower or a
Subsidiary that would reasonably be expected to have a Material Adverse Effect.




     (f) The Administrative Agent shall have completed a due diligence investigation of the
Borrower and its Subsidiaries in scope, and with results, reasonably satisfactory to the
Administrative Agent and shall have been given such access to the
management, records, books of account, contracts and properties of the Borrower and its



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Subsidiaries and shall have received such material financial, business and other information
regarding the Borrower and its Subsidiaries as the Administrative Agent shall have
reasonably requested, including, without limitation, information requested as to probable
material contingent liabilities, tax matters, collective bargaining and labor agreements,
insurance and other material contracts, and its material real and personal property.




     (g) There shall not have occurred any material disruption or material adverse change in
the financial, banking, or capital markets which the Administrative Agent, in its reasonable
discretion, deems to materially impair the syndication of this revolving credit facility.



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



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




     (a) The representations and warranties of the Borrower and each other Loan Party
contained in Article V or any other Loan Document, or which are contained in any
document furnished at any time under or in connection herewith or therewith, shall be true
and correct on and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they
shall be true and correct as of such earlier date, and except that for purposes of this
Section 4.02, (i) the representations and warranties contained in subsections (a)
and (b) of Section 5.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of Section 6.01 and (ii)
for purposes of representations and warranties relating to information contained on
Schedule 5.05 and 5.13, such representations and warranties shall relate to
any updated schedule provided as of the end of the most recently ended fiscal quarter.




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




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



     Each Request for Credit Extension (other than a Revolving Loan Notice requesting only a
conversion of Revolving Loans to the other Type or a continuation of LIBOR Rate Loans)



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submitted by
the Borrower shall be deemed to be a representation and warranty that the conditions specified in
Sections 4.02(a) and (b) have been satisfied on and as of the date of the
applicable Credit Extension.




ARTICLE V.

REPRESENTATIONS AND WARRANTIES




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



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



     5.02 Authorization; No Contravention. The execution, delivery and performance by each Loan
Party of each Loan Document and the transaction contemplated thereby to which such Person is party,
have been duly authorized by all necessary corporate or other organizational action, and do not and
will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with
or result in any breach or contravention of, or the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is a party or
affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any
order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such
Person or its property is subject; or (c) violate any Law.



     5.03 Governmental Authorization; Other Consents. Other than as previously obtained and in
full force and effect, and other than the filing of security interests and notices to, and in the
case of enforcement consents from, applicable regulatory authorities with respect to the Pledge
Agreement, no approval, consent, exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority or any other Person is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, any Loan Party of this
Agreement, any other Loan Document or the transactions contemplated thereby.



     5.04 Binding Effect. This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.
This Agreement constitutes, and each other Loan Document when so delivered will constitute, a
legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is
party thereto in accordance with its terms, subject to the effect of applicable
insolvency and bankruptcy laws and equitable principles and, in the case of the enforcement of
the Pledge Agreement, applicable regulatory restrictions.



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




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




     (b) The unaudited consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries dated December 31, 2009, and the related consolidated and consolidating
statements of income or operations, shareholders’ equity and cash flows for the fiscal
quarter ended on that date (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted therein, and (ii)
fairly present the financial condition of the Borrower and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby, subject, in the case
of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments. Schedule 5.05 sets forth all (x) Indebtedness of the Borrower (with
respect to clauses (a), (e) and (f) of the definition of “Indebtedness”) and all capital
leases and (y) Indebtedness of the Subsidiaries, in each case with a principal amount of
more than $5,000,000 as of the date of such financial statements.




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




     (d) To the best knowledge of the Borrower, no Internal Control Event exists or has
occurred since the date of the Audited Financial Statements that has resulted in or would
reasonably be expected to result in a misstatement in any material respect, in any financial
information delivered or to be delivered to the Administrative Agent or the Lenders, of (i)
covenant compliance calculations provided hereunder or (ii) the assets, liabilities,
financial condition or results of operations of the Borrower and its Subsidiaries on a
consolidated basis.




     (e) The consolidated forecasted statements of income of the Borrower and its
Subsidiaries delivered pursuant to Section 6.01(c) were prepared in good faith on
the basis of the assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and represented, at the time
of delivery, the Borrower’s best estimate of its future financial condition and
performance.



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     5.06 Litigation. Other than those disclosed in public filings, if any, or provided to the
Administrative Agent and the Lenders in writing, there are no actions, suits, proceedings, claims
or disputes pending or, to the knowledge of the Borrower after due and diligent investigation,
threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority,
by or against the Borrower or any of its Subsidiaries or against any of their properties or
revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document, or any
of the transactions contemplated hereby, or (b) either individually or in the aggregate, if
determined adversely, would reasonably be expected to have a Material Adverse Effect.



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



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



     5.09 Environmental Compliance. The Borrower has reasonably concluded that the Borrower and
its Subsidiaries are in compliance with Environmental Laws and there are no claims that would,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.



     5.10 Insurance. The properties of the Borrower and its Subsidiaries are, to the best of the
Borrower’s knowledge, insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are
reasonable for its business.



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




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     5.12 ERISA Compliance.




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




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




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



     5.13 Subsidiaries; Equity Interests. The Borrower has no Subsidiaries other than those
specifically disclosed in Part (a) of Schedule 5.13, and all of the outstanding Equity
Interests in such Subsidiaries have been validly issued, are fully paid and nonassessable and,
except as set forth on Schedule 5.13, are owned by a Loan Party in the amounts specified on
Part (a) of Schedule 5.13 free and clear of all Liens (other than restrictions set forth in
the Organizational Documents of such Subsidiary). The Borrower has no equity investments in any
other corporation or entity other than those specifically disclosed in Part (b) of Schedule
5.13 and other than those in the ordinary course of business. All of the outstanding Equity
Interests in the Borrower have been validly issued and are fully paid and nonassessable.



     5.14 Margin Regulations; Investment Company Act; Other Regulations.




     (a) The Borrower is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the FRB), or extending credit for the purpose of



66









 







purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB).




     (b) None of the Borrower, any Person Controlling the Borrower, or any Subsidiary is
subject to regulation under the Investment Company Act of 1940, the Energy Policy Act of
2005, the Federal Power Act, the Interstate Commerce Act, or any state public utilities
code.



     5.15 Disclosure. The Borrower has disclosed to the Administrative Agent and the Lenders (or
has disclosed as a public filing) all agreements, instruments and corporate or other restrictions
to which it or any of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, would reasonably be expected to result in a Material Adverse
Effect. No report, financial statement, certificate or other information furnished (whether in
writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified or supplemented by
other information so furnished) contains as of the date provided or as of which it speaks 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, 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. Any disclosure by Borrower and/or its Subsidiaries called for under this
Agreement, other than disclosures under Section 6.01, shall be satisfied if such
information is publicly filed by the Borrower with the SEC.



     5.16 Compliance with Laws. Each Loan Party and each Subsidiary thereof is in compliance in
all material respects with the requirements of all Laws and all orders, writs, injunctions and
decrees applicable to it or to its properties (including the USA PATRIOT Act (Title III of Pub. L.
107-56)), except in such instances in which (a) such requirement of Law or order, writ, injunction
or decree is being contested in good faith by appropriate proceedings diligently conducted or (b)
the failure to comply therewith, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.



     5.17 Taxpayer Identification Number. The Borrower’s true and correct U.S. taxpayer
identification number is set forth on Schedule 10.02.



     5.18 Intellectual Property; Licenses, Etc. The Borrower and its Subsidiaries own, or possess
the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent
rights, franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of the Borrower, no
slogan or other advertising device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrower or any Subsidiary infringes upon any
rights held by any other Person other than as would not be reasonably expected to have a Material
Adverse Effect. No claim or litigation regarding any of the foregoing is pending or, to the
best



67









 







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



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



     5.20 Common Enterprise. The Borrower and its Subsidiaries are engaged in the businesses
described on Schedule 5.20 as of the Closing Date: These operations require financing on a
basis such that the credit supplied can be made available from time to time to the Borrower and
various of its Subsidiaries, as required for the continued successful operation of the Borrower and
its Subsidiaries as a whole. The Borrower has requested the Lender to make credit available
hereunder primarily for the purposes set forth in Section 6.11 and generally for the
purposes of financing the operations of the Borrower and its Subsidiaries. The Borrower and each
of its Subsidiaries expects to derive benefit (and the Board of Directors of the Borrower has
determined that such Subsidiary may reasonably be expected to derive benefit), directly or
indirectly, from a portion of the credit extended by the Lenders hereunder, both in its separate
capacity and as a member of the group of companies, since the successful operation and condition of
the Borrower and each of its Subsidiaries is dependent on the continued successful performance of
the functions of the group as a whole.



     5.21 Burdensome Agreements. Neither the Borrower nor any Subsidiary is in default under any
indenture, loan agreement, credit agreement, lease or other agreement or instrument, or subject to
any restriction of its constituent documents, that would, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Default has occurred and is
continuing or would result from the consummation of the transactions contemplated by this Agreement
or any other Loan Document.



     5.22 Collateral. For the avoidance of doubt, Administrative Agent and each Lender recognizes
and acknowledges that the Collateral includes Equity Interests in Broker Dealer Subsidiaries of
Borrower and that (i) the disposition or transfer of such Equity Interests, (ii) any direct or
indirect change of control of any Broker Dealer Subsidiary, (iii) any direct or indirect exercise
of management control or other control over any Broker Dealer Subsidiary, and (iv) payment of
dividends and distributions by any Broker Dealer Subsidiary is subject to regulatory restrictions
(including the need to obtain the consent or approval of applicable self regulatory authorities and
other applicable regulatory authorities) and that the creation of the pledge in such Equity
Interests may require notification to applicable regulatory authorities. For the avoidance of
doubt, Administrative Agent and each Lender recognizes and agrees that the representations and
warranties and covenants in this Agreement or the other Loan Documents shall not be breached solely
by reason of the existence of regulatory restrictions, or requirements for obtaining consent or
approval from regulatory authorities solely in respect of the enforcement of any rights and
remedies under the Loan Documents or the enforcement of any pledge of the securities of or exercise
of rights over any Broker Dealer Subsidiary. Without limiting the foregoing, Administrative Agent
and each Lender acknowledges and agrees that in respect of Penson Financial Services Canada Inc.,
the Investment Industry Regulatory Organization of
Canada, the Montreal Exchange, the Toronto Stock Exchange, the TSX Venture Exchange and/or any
other applicable governmental, regulatory or self-regulatory agency or body having



68









 







jurisdiction
over Penson Financial Services Canada Inc., and/or each of their respective successor organizations
shall each be considered applicable self regulatory authorities.



ARTICLE VI.

AFFIRMATIVE COVENANTS




     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the
Borrower shall, and shall (except in the case of the covenants set forth in Sections 6.01,
6.02, and 6.03) cause each Subsidiary to:



     6.01 Financial Statements. Deliver to the Administrative Agent and each Lender, in form and
detail reasonably satisfactory to the Administrative Agent and the Required Lenders:




     (a) as soon as available, but in any event within 90 days after the end of each fiscal
year of the Borrower (commencing with the fiscal year ended December 31, 2010), a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year, and the related consolidated statements of income or operations, shareholders’ equity
and cash flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in accordance
with GAAP, such consolidated statements to be audited and accompanied by (i) a report and
opinion of a Registered Public Accounting Firm of nationally recognized standing reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and applicable Securities Laws and shall not be
subject to any “going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit or with respect to the absence of any material
misstatement and (ii) if and when applicable, an opinion of such Registered Public
Accounting Firm independently assessing the Borrower’s internal controls over financial
reporting in accordance with Item 308 of SEC Regulation S-K, PCAOB Auditing Standard No. 2,
and Section 404 of Sarbanes-Oxley expressing a conclusion that contains no statement that
there is a material weakness in such internal controls, except for such material weaknesses
as to which the Required Lenders do not object; and




     (b) as soon as available, but in any event within 45 days after the end of each fiscal
quarter of each fiscal year of the Borrower (commencing with the fiscal quarter ended March
31, 2010 and including each fiscal quarter ending December 31 of each fiscal year), a
consolidated and consolidating balance sheet of the Borrower and its Subsidiaries as at the
end of such fiscal quarter, and the related consolidated and consolidating statements of
income or operations, shareholders’ equity and cash flows for such fiscal quarter and for
the portion of the Borrower’s fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the previous fiscal
year and the corresponding portion of the previous fiscal year, all in
reasonable detail, such consolidated and consolidating statements to be certified by
the chief executive officer, chief financial officer, treasurer or controller of the
Borrower as fairly presenting the financial condition, results of operations, shareholders’
equity and



69









 







cash flows of the Borrower and its Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes and such
consolidating statements to be certified by the chief executive officer, chief financial
officer, treasurer or controller of the Borrower to the effect that such statements are
fairly stated in all material respects when considered in relation to the consolidated
financial statements of the Borrower and its Subsidiaries; and




     (c) as soon as available, but in any event before the end of each fiscal year of the
Borrower, forecasts prepared by management of the Borrower, in form reasonably satisfactory
to the Administrative Agent and the Required Lenders, of consolidated statements of income
or operations of the Borrower and its Subsidiaries on a monthly basis for the immediately
following fiscal year (including the fiscal year in which the Maturity Date occurs).



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



     6.02 Certificates; Other Information. Deliver to the Administrative Agent and each Lender, in
form and detail reasonably satisfactory to the Administrative Agent and the Required Lenders:




     (a) concurrently with the delivery of the financial statements referred to in
Sections 6.01(a) and (b) (commencing with the delivery of the financial
statements for the fiscal quarter ended June 30, 2010), a duly completed Compliance
Certificate signed by the chief executive officer, chief financial officer, treasurer or
controller of the Borrower;




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




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




     (d) promptly, and in any event within five Business Days after receipt thereof by any
Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received
from the SEC (or comparable agency in any applicable



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non-U.S. jurisdiction) concerning any
investigation or possible investigation or other inquiry by such agency regarding financial
or other operational results of any Loan Party or any Subsidiary thereof, unless such
investigation is in the ordinary course of business or would not reasonably be expected to
have a Material Adverse Effect;




     (e) promptly notify the Administrative Agent of the formation of any Subsidiary of the
Borrower; and




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



     Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials otherwise filed
with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on
the Borrower’s website on the Internet at the website address listed on Schedule 10.02; or
(ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative Agent); provided
that: (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or
any Lender that requests the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Borrower
shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents. Notwithstanding anything contained herein,
in every instance the Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.02(a) to the Administrative Agent. Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery
or to maintain copies of the documents referred to above, and in any event shall have no
responsibility to monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such
documents.



     6.03 Notices. Promptly notify the Administrative Agent and each Lender:




     (a) of the occurrence of any Default;




     (b) of any matter that has resulted or would reasonably be expected to result in a
Material Adverse Effect, including as a result of (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between the Borrower or any
Subsidiary and any Governmental Authority; or (iii) the commencement of, or any
material development in, any litigation or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental Laws;



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     (c) of the occurrence of any ERISA Event;




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




     (e) of the determination by the Registered Public Accounting Firm providing the opinion
required under Section 6.01(a)(ii) (in connection with its preparation of such
opinion) or the Borrower’s determination at any time of the occurrence or existence of any
Internal Control Event;




     (f) of any event or circumstances initiating a mandatory offer to purchase or redeem
any portion of the 2017 Senior Notes or the 2014 Convertible Notes;




     (g) any initiation of any optional redemption of any portion of the 2017 Senior Notes
or the 2014 Convertible Notes; and




     (h) of the sale by the Borrower of any of its capital stock or other Equity Interest
(other than (a) as contemplated under the 2000 Stock Incentive Plan or securities issued
upon exercise of stock options issued to employees, directors or contractors of the Borrower
or its Subsidiaries, (b) any conversion of 2014 Convertible Notes representing less than 50%
in the aggregate of the aggregate principal amount of all 2014 Convertible Notes issued
pursuant to the 2014 Notes Offering, and (c) as contemplated in connection with the Ridge
Acquisition or the 2017 Notes Offering; provided, however, at the request of
the Administrative Agent, the Borrower shall provide any information regarding such sales to
the Administrative Agent);



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



     6.04 Payment of Obligations. (a) Except to the extent no Material Adverse Effect would result
or an Event of Default under Section 8.01(e) would not occur from the applicable failure,
pay and discharge as the same shall become due and payable, (i) all tax liabilities, assessments
and governmental charges or levies upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Borrower or such Subsidiary, and (ii) all
Indebtedness, as and when due and payable, but subject to any subordination provisions contained in
any instrument or agreement evidencing such Indebtedness and (b) pay and discharge all lawful
claims which, if unpaid, would by Law become a Lien upon its property except to the extent such
Lien is otherwise permitted by another Section of this
Agreement, unless the same are being contested in good faith by appropriate proceedings
diligently conducted and adequate reserves in accordance with GAAP are being maintained by the
Borrower or such Subsidiary.



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     6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and
effect its legal existence and good standing under the Laws of the jurisdiction of its organization
except in a transaction permitted by Section 7.04 or 7.05 or to the extent no
Material Adverse Effect would result; (b) take commercially reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary in the normal conduct of its
business, except to the extent that failure to do so would not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which would reasonably be expected to have a
Material Adverse Effect.



     6.06 Maintenance of Properties. (a) Maintain, preserve and protect all of its tangible
properties and equipment in the operation of its business in good working order and condition,
ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals and
replacements thereof, except in case of clauses (a) and (b) if the failure to do so would not
reasonably be expected to have a Material Adverse Effect or would not violate Section 7.05
hereof.



     6.07 Maintenance of Insurance. Maintain with financially sound and reputable insurance
companies not Affiliates of the Borrower, insurance with respect to its properties and business, in
such amounts, with such deductibles and covering such risks as are reasonable for its business and
providing for not less than 30 days’ prior notice to the Administrative Agent of termination, lapse
or cancellation of such insurance and designating the Administrative Agent as an additional
insured, if applicable; provided, however, if such insurance company refuses to
provide insurance on such terms, Borrower may maintain insurance on such other terms as is
customarily maintained by companies in the same or similar businesses similarly situated.



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



     6.09 Books and Records. (a) Maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made of all financial
transactions and matters involving the assets and business of the Borrower or such Subsidiary, as
the case may be; and (b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory jurisdiction over the
Borrower or such Subsidiary, as the case may be.



     6.10 Inspection Rights. Permit representatives and independent contractors of the
Administrative Agent and each Lender to visit and inspect any of its properties, to examine its
corporate, financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Administrative Agent and each Lender and at such
reasonable times during normal business hours and as often as may be reasonably desired, upon



73









 







reasonable advance notice to the Borrower; provided, however, that when an Event of
Default exists the Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of the Borrower at any time
during normal business hours and without advance notice.



     6.11 Use of Proceeds. Use the proceeds of the Credit Extensions (a) to provide equity capital
or loans to its Subsidiaries not in contravention of any Law or any Loan Document and (b) for
general corporate purposes, including providing working capital for itself and its Subsidiaries not
in contravention of any Law or of any Loan Document, which shall include uses such as financing for
permitted acquisitions and to pay transaction fees, costs and expenses related to this Agreement.



     6.12 Additional Subsidiaries and Collateral. Within twenty days after the time that any
Person becomes a Material Domestic Subsidiary as a result of the creation of such Material Domestic
Subsidiary, an acquisition, or otherwise, then, unless such Material Domestic Subsidiary is merged
into the Borrower (with the Borrower being the surviving Person) prior to the expiration of such
twenty day period, (a) 100% of such Material Domestic Subsidiary’s Equity Interests shall be
pledged to secure the Obligations, and (b) the Administrative Agent shall receive such board
resolutions, officer’s certificates, corporate and other documents and opinions of counsel as the
Administrative Agent shall reasonably request in connection with such pledge. Within forty-five
days after the time that any Person becomes a Material Foreign Subsidiary as a result of the
creation of such Material Foreign Subsidiary, an acquisition or otherwise, (a) 65% of such Material
Foreign Subsidiary’s Equity Interests shall be pledged to secure the Obligations, and (b) the
Administrative Agent shall receive such board resolutions, officer’s certificates, corporate and
other documents and opinions of counsel as the Administrative Agent shall reasonably request in
connection with such pledge; provided, however, that if a pledge of the Equity
Interests of a Material Foreign Subsidiary would result in adverse tax consequences, the Borrower
may provide an opinion of counsel acceptable to the Administrative Agent addressing such adverse
tax consequences and, upon the consent of the Required Lenders (such consent not to be unreasonably
withheld), such pledge shall not be required. Provided further, that if a Material
Domestic Subsidiary or Material Foreign Subsidiary is a Subsidiary of an entity which is already
the subject of a pledge in favor of Administrative Agent under the Loan Documents, such Material
Domestic Subsidiary or Material Foreign Subsidiary need not be so pledged. Notwithstanding the
foregoing, in no event shall any Broker Dealer Subsidiary be required to be a Guarantor or a
pledgor. In the event that a Subsidiary Guarantees the obligations of the Borrower under the 2017
Senior Notes, such Subsidiary shall also become a Guarantor. In addition, to the extent the
Borrower or any Subsidiary or Affiliate thereof shall pledge any assets as collateral for the
obligations of the Borrower under the 2017 Senior Notes, such collateral shall also be pledged as
collateral under the Loan Documents.



     6.13 Further Assurances. Promptly upon request by the Administrative Agent, the Borrower
shall (and shall cause any of its Subsidiaries to) take such action as the Administrative Agent may
reasonably require from time to time in order to carry out more effectively the terms of this
Agreement or any other Loan Document.



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ARTICLE VII.

NEGATIVE COVENANTS




     So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation
hereunder shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, the
Borrower shall not, nor shall it permit any Subsidiary to, directly or indirectly:



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




     (a) Liens pursuant to any Loan Document;




     (b) Liens existing on the date hereof and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby is
not changed, (ii) the amount secured or benefited thereby is not increased except as
contemplated by Section 7.03(b), (iii) the direct or any contingent obligor with
respect thereto is not changed, and (iv) any renewal or extension of the obligations secured
or benefited thereby is permitted by Section 7.03(b);




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




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




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




     (f) deposits to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory or regulatory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature and security deposits incurred in the ordinary
course of business;




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




     (h) Liens securing judgments for the payment of money not constituting an Event of
Default under Section 8.01(h);



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     (i) Liens securing Indebtedness permitted under Section 7.03(d);
provided that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (ii) the Indebtedness secured thereby does not
exceed the cost or fair market value, whichever is lower, of the property being acquired on
the date of acquisition; and




     (j) Liens securing the Short Term Subsidiary Indebtedness permitted under Section
7.03(e); provided that such Liens do not at any time encumber any property other
than the property financed by such Short Term Subsidiary Indebtedness (and proceeds thereof)
and the rights of Persons making deposits with the Borrower and the Subsidiaries to the
extent of rights in respect of such deposits.




     (k) any interest or title of a lessor or licensor in the property subject to any
capital lease or operating lease or license;




     (l) Liens arising from filing Uniform Commercial Code financing statements regarding
leases or precautionary filings;




     (m) Liens in favor of the Borrower or a Subsidiary in the ordinary course of business;




     (n) Liens arising from the rendering of a final judgment or order against the Borrower
or a Subsidiary that does not give rise to an Event of Default;




     (o) Liens which constitute rights of set-off of a customary nature or bankers’ liens or
securities intermediaries’ liens with respect to amounts on deposit or investment property,
as applicable, whether arising by operation of law or by contract, in connection with
arrangements entered into with banks or securities intermediaries in the ordinary course of
business;




     (p) Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods;




     (q) Liens securing the 2017 Senior Notes and subject to the Intercreditor Agreement;
and




     (r) Liens otherwise expressly permitted by the Loan Documents.



     7.02 Investments. Make any Investments, except:




     (a) Investments held by the Borrower or such Subsidiary in the form of cash, Cash
Equivalents and short-term marketable securities and other Investments purchased, sold or
held by Broker Dealer Subsidiaries in the ordinary course of business;




     (b) advances to officers, directors and employees of the Borrower and Subsidiaries in
an aggregate amount not to exceed $500,000 at any time outstanding or



76









 







$50,000 for any
individual at any time outstanding, for travel, entertainment, relocation and analogous
ordinary business purposes;




     (c) Investments of the Borrower in any wholly-owned or majority owned Subsidiary and
Investments of any wholly-owned or majority owned Subsidiary in the Borrower or in another
wholly-owned or majority owned Subsidiary;




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




     (e) Investments existing on the date hereof and as set forth on Schedule 7.02;




     (f) Investments constituting acquisitions of the Equity Interests of a Person or
acquisitions of assets or other property to the extent that (i) such Investments do not
exceed $5,000,000 for any single acquisition or $20,000,000 in the aggregate during any
fiscal year and (ii) the Borrower’s Consolidated Leverage Ratio does not exceed **** to ****
as of the date of the most recently submitted Compliance Certificate; provided,
however, that this clause (f) shall not include any Equity Repurchases;




     (g) Equity Repurchases;




     (h) Investments otherwise permitted in this Agreement;




     (i) The Ridge Acquisition; and




     (j) Provided that the Borrower’s Consolidated Leverage Ratio is less than **** to ****,
other Investments in an aggregate principal amount not to exceed $10,000,000 during any
fiscal year.



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




     (a) Indebtedness under the Loan Documents;




     (b) Indebtedness outstanding on the date hereof and listed on Schedule 5.05 and
any refinancings, refundings, renewals or extensions thereof; provided that (i) the
amount of such Indebtedness is not increased at the time of such refinancing,
refunding, renewal or extension except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in connection with such
refinancing and by an amount equal to any existing commitments unutilized thereunder and
(ii) the terms relating to principal amount, amortization, maturity, collateral (if any) and
subordination (if any), and other material terms taken as a whole, of any such refinancing,
refunding, renewing or extending Indebtedness, and of any agreement entered into and of any
instrument issued in connection therewith, are no less favorable in any material respect to
the Loan Parties or the Lenders than the terms of any



77









 







agreement or instrument governing the
Indebtedness being refinanced, refunded, renewed or extended and the interest rate
applicable to any such refinancing, refunding, renewing or extending Indebtedness does not
exceed the then applicable market interest rate;




     (c) obligations (contingent or otherwise) of the Borrower or any Subsidiary existing or
arising under any Swap Contract, provided that (i) such obligations are (or were)
entered into by such Person in the ordinary course of business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets, or property
held or reasonably anticipated by such Person, or changes in the value of securities issued
by such Person, and not for purposes of speculation or taking a “market view;” and (ii) such
Swap Contract does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;




     (d) Indebtedness in respect of capital leases, Synthetic Lease Obligations, and
purchase money obligations for fixed or capital assets within the limitations set forth in
Section 7.01(i); provided, however, that the aggregate amount of all
such Indebtedness permitted in this Section 7.03(d) at any one time outstanding
shall not exceed $25,000,000;




     (e) the Short Term Subsidiary Indebtedness and deposits and assets received from
customers and their Affiliates with respect to customers of Broker Dealer Subsidiaries;




     (f) Indebtedness of types incurred by the Borrower or any of the Subsidiaries
consistent with the historical practices and the ordinary course of business of any of the
Subsidiaries or of the Borrower (determined as of the date hereof), including (i) Guarantees
related to a customer’s or Subsidiary’s ordinary trade activities, including but not limited
to those made in favor of exchanges, market centers, third party clearing firms,
counterparties, record keeping centers or technology providers and (ii) Guarantees made in
favor of lenders to a Subsidiary’s customers required in connection with such customers’
purchase of exchange seats or memberships, provided that the relevant
exchange seat or membership’s value is, at the time the Guarantee is made, at least twice
the principal amount of the Indebtedness so Guaranteed;




     (g) Guarantees by the Borrower not otherwise permitted by this Section 7.03 of
obligations in an aggregate amount not to exceed $35,000,000 at any one time; provided that
no single Guarantee shall exceed a notional or principal amount of $10,000,000, and further
provided that all Guarantees existing or contemplated as of the date hereof are listed on
the attached Schedule 7.03(g);




     (h) Guarantees by any Subsidiary of the Borrower with respect to the 2017 Senior Notes;




     (i) Indebtedness associated with the 2014 Notes Offering Documents and the 2017 Notes
Offering Documents;



78









 






     (j) the Seller Notes, without duplication of amounts permitted under Section
7.03(i); and




     (k) provided that the Borrower’s Consolidated Leverage Ratio is less than **** to ****,
other Indebtedness in an aggregate principal amount outstanding not to exceed $10,000,000.



     7.04 Fundamental Changes. Merge, dissolve, liquidate, consolidate with or into another
Person, or Dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any
Person, except that, so long as no Default exists or would result therefrom:




     (a) any Subsidiary may merge with (i) the Borrower, provided that the Borrower
shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries,
provided that when any wholly-owned Subsidiary or Guarantor is merging with another
Subsidiary, the wholly-owned Subsidiary or such Guarantor (as applicable) shall be the
continuing or surviving Person; and




     (b) any Subsidiary may Dispose of all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or to another Subsidiary consistent with
the terms of this Agreement, including Section 7.02 and Section 7.05;
provided that if the transferor in such a transaction is a Guarantor, then the
transferee must either be the Borrower or a Guarantor.



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




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




     (b) Dispositions permitted by Section 7.04;




     (c) other Dispositions of assets not included in clauses (a), (b) or (d) where the
aggregate sales price does not exceed $20,000,000 in the aggregate for all
Dispositions in any fiscal year and the Net Cash Proceeds are paid to the
Administrative Agent as required by Section 2.05(d); and




     (d) Dispositions of assets in the ordinary course of business consistent with
historical practice


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




     7.06 Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, or issue or sell any Equity Interests,
except that, so long as no Default shall have occurred and be continuing at the time of any action
described below or would result therefrom:



79









 






     (a) each Subsidiary may make Restricted Payments to the Borrower and any other Person
that owns an Equity Interest in such Subsidiary, ratably according to their respective
holdings of the type of Equity Interest in respect of which such Restricted Payment is being
made;




     (b) the Borrower and each Subsidiary may declare and make dividend payments or other
distributions payable solely in the common stock or other common Equity Interests of such
Person;




     (c) the Borrower and each Subsidiary may purchase, redeem or otherwise acquire Equity
Interests issued by it with the proceeds received from the substantially concurrent issue of
new shares of its common stock or other common Equity Interests;




     (d) the Borrower may issue and sell its common Equity Interests and JBO Stock;




     (e) the Borrower may issue (i) restricted stock units issued pursuant to the 2000 Stock
Incentive Plan, (ii) securities issuable upon exercise of stock options, and (iii)
securities pursuant to the Borrower’s employee stock purchase plan;




     (f) Equity Repurchases;




     (g) the Borrower may issue Equity Interests in connection with the 2014 Notes Offering
and the conversion of 2014 Convertible Notes;




     (h) the Borrower may make Restricted Payments in connection with the 2014 Convertible
Notes pursuant to the terms of the 2014 Notes Offering Documents;




     (i) the Borrower and its Subsidiaries may make cash payments in lieu of fractional
entitlements to securities or may round fractional entitlements to a whole security; and




     (j) the Borrower may issue Equity Interests in connection with the Ridge Acquisition,
so long as the Net Cash Proceeds (if any) from such issuance are applied to pay a portion of
the Ridge Acquisition’s purchase price.



     7.07 Change in Nature of Business. Engage in any material line of business substantially
different from those lines of business conducted by the Borrower and its Subsidiaries on the date
hereof or any business substantially related or incidental thereto (it being agreed that a change
in customer mix or the addition of new types of customers shall not be deemed to be a change in the
nature of the business).



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



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     7.09 Burdensome Agreements. Enter into any Contractual Obligation (other than this Agreement,
any other Loan Document, the 2017 Notes Offering Documents or the Seller Notes) that (a) limits the
ability (i) of any Subsidiary to make Restricted Payments to the Borrower or any Subsidiary or to
otherwise transfer property to the Borrower or any Subsidiary, (ii) of any Subsidiary to Guarantee
the Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person; provided, however, that
this clause (iii) shall not prohibit any negative pledge incurred or provided in favor of any
holder of Indebtedness permitted under Section 7.03(d) solely to the extent any such
negative pledge relates to the property financed by or the subject of such Indebtedness; or (b)
requires the Borrower or any Subsidiary to grant a Lien to secure an obligation of any Person if
the Borrower or any Subsidiary were to grant a Lien to secure another of its obligations to another
Person.



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



     7.11 Sale and Leaseback. Enter into any Sale and Leaseback Transactions with a value in
excess of $20,000,000 in the aggregate per fiscal year (directly or indirectly) with any Person
other than among the Borrower and any Subsidiary (to the extent such transaction is otherwise
permitted hereunder).



     7.12 Change in Fiscal Year or Accounting Methods. Change its fiscal year or its method of
accounting (other than immaterial changes in methods or as required by GAAP).



     7.13 Prepayment of Indebtedness. Prepay any Indebtedness other than (a) the Obligations, (b)
Indebtedness under the Seller Note, to the extent permitted by the Subordination Agreement and not
otherwise prohibited by this Agreement, (c) other Indebtedness not to exceed
$20,000,000 in the aggregate during any fiscal year, (d) to the extent that (i) the Borrower’s
Consolidated Leverage Ratio did not exceed **** to **** as of the most recently provided Compliance
Certificate and (ii) no Default exists and is continuing, Indebtedness under the 2017 Notes
Offering Documents (whether optional or required under the terms of the 2017 Notes Offering
Documents), to the extent permitted by the Intercreditor Agreement, (e) to the extent that (i) the
Borrower’s Consolidated Leverage Ratio did not exceed **** to **** as of the most recently provided
Compliance Certificate and (ii) no Default exists and is continuing, Indebtedness under the 2014
Notes Offering Documents (provided that cash settlement of a redemption by the holder of 2014
Convertible Notes or cash payments in respect of fractional entitlements shall not be a prepayment
for these purposes), (f) to the extent that (i) the Borrower’s Consolidated Leverage Ratio does not
exceed **** to **** on a pro forma basis at time of such prepayment and remains at or below **** to
**** following such prepayment and (ii) no Default exists and is continuing, prepayments made out
of the proceeds of the issuance of Equity Interests or (g) Short Term Subsidiary Indebtedness and
deposits and assets received from customers and their Affiliates with respect to customers of
Broker Dealer Subsidiaries; provided,



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however, that the conversion of 2014
Convertible Notes shall not be considered a prepayment under this Section 7.13.



     7.14 Material Contracts. Amend, supplement or otherwise modify the terms of any Material
Contract or take any other action in connection with any Material Contract that would impair the
value of the interests or rights of the Borrower or any Subsidiary except as would not have a
Material Adverse Effect.



     7.15 Management Fees. Pay any management fee or similar compensation except such to Persons
and in amounts consistent with historical practice and in the ordinary course of business or to
Borrower or its Subsidiaries.



     7.16 Financial Covenants.




     (a) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth at
any time to be less than $****; (i) increasing quarterly by (A) an amount equal to ****% of
the net aggregate increases in Shareholders’ Equity of the Borrower and its Subsidiaries
after the date hereof by reason of the issuance and sale of Equity Interests of the Borrower
or any Subsidiary (other than issuances to the Borrower or a wholly-owned Subsidiary,
issuances of restricted stock units pursuant to the 2000 Stock Incentive Plan, securities
issued upon the exercise of stock options, or issuances of securities pursuant to the
Borrower’s employee stock purchase plan), including upon any conversion of debt securities
of the Borrower into such Equity Interests and (B) an amount equal to ****% of Consolidated
Net Income for the fiscal year then ended and (ii) decreasing quarterly by an amount equal
to goodwill and other intangibles associated with acquisitions completed prior to the
Closing Date and previously disclosed to the Administrative Agent and the Ridge Acquisition.




     (b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed
Charge Coverage Ratio as of the end of any fiscal quarter measured quarterly in arrears on a
rolling four quarter basis of the Borrower to be less than **** to ****.




     (c) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of
the end of any fiscal quarter measured quarterly in arrears on a rolling four quarter basis
to be greater than (i) from the Closing Date through the fiscal quarter ending March 31,
2011, **** to ****, (ii) from the fiscal quarter ending June 30, 2011 through the fiscal
quarter ending September 30, 2011, **** to ****, (iii) from the fiscal quarter ending
December 31, 2011 through the fiscal quarter ending September 30, 2012, **** to ****, and
(iv) from the fiscal quarter ending December 31, 2012 and thereafter, **** to ****.




     (d) Minimum Capital Requirement. Permit PFS to maintain Regulatory Capital
less than **** percent (****%) of its Debit Balances for more than three consecutive
Borrower business days.



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     (e) Minimum Liquidity Requirement. Permit the Borrower to maintain
Unencumbered Liquidity in an amount less than the Total Outstandings at any time.




     (f) Capital Expenditures. Make or become legally obligated to make any Capital
Expenditure, except for Capital Expenditures not exceeding, in the aggregate for the
Borrower and its Subsidiaries, $**** during each fiscal year.



     7.17 Amendments to Organization Documents. Amend or otherwise modify the terms of any
Organization Document if such amendment or modification would materially and adversely impact the
Lenders’ rights under the Loan Documents.



     7.18 Amendments to 2014 and 2017 Notes Offering Documents. Amend or otherwise modify the
material terms of the 2014 Notes Offering Documents or the 2017 Notes Offering Documents if such
amendment, or modification would materially and adversely impact the Lenders’ rights under the Loan
Documents.



     7.19 Ridge Acquisition. Close the Ridge Acquisition unless and until fully executed copies of
the Seller Note, the Outsourcing Agreement and the Subordination Agreement been provided to the
Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent and
the Required Lenders.



ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES




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




     (a) Non-Payment. The Borrower or any other Loan Party fails to pay (i) when
due, any amount of principal of any Loan or any Letter of Credit Obligation, or (ii) within
three days after the same becomes due, any interest on any Loan or on any Letter
of Credit Obligation, or any fee due hereunder, or (iii) within five days after the
same becomes due, any other amount payable hereunder or under any other Loan Document; or




     (b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.03, 6.05,
6.10, or 6.11 or Article VII; or




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




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








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     (e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder
and Indebtedness under Swap Contracts) having an aggregate principal amount (including
amounts owing to all creditors under any combined or syndicated credit arrangement) of more
than the Threshold Amount in the aggregate, or (B) fails to observe or perform any other
agreement or condition relating to any such Indebtedness or Guarantee or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other event occurs,
the effect of which default or other event is to cause, or to permit the holder or holders
of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become due or to be
repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to
repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect thereof to be
demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined
in such Swap Contract) resulting from (A) any event of default under such Swap Contract as
to which the Borrower or any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which
the Borrower or any Subsidiary is an Affected Party (as so defined) and, in either event,
the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is
greater than the Threshold Amount in the aggregate; or




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




     (g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary
becomes unable or admits in writing its inability or fails generally to pay its debts as
they become due, or (ii) any writ or warrant of attachment or execution or similar process
is issued or levied against all or any material part of the property of any such Person and
is not released, vacated or fully bonded within 60 days after its issue or levy; or




     (h) Judgments. There is entered against the Borrower or any Subsidiary (i) one
or more final judgments or orders for the payment of money in an aggregate amount (as to all
such judgments or orders) exceeding the Threshold Amount (to the extent not covered by
independent third-party insurance as to which the insurer does not



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dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or order, or
(B) there is a period of 10 consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect; or




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




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




     (k) Change of Control. There occurs any Change of Control; or




     (l) Indentures. There occurs any “Fundamental Change” as defined in the 2014
Indenture or there occurs and is continuing any “Event of Default” as defined in the 2017
Indenture; or




     (m) Seller Notes. There occurs and is continuing any material “Event of
Default” as defined in the Seller Notes; or




     (n) Intercreditor Agreement. There occurs and is continuing any default under
the Intercreditor Agreement that has, or would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.



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




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




     (b) declare the unpaid principal amount of all outstanding Loans, all interest accrued
and unpaid thereon, and all other amounts owing or payable hereunder or under



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any other Loan
Document to be immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;




     (c) require that the Borrower Cash Collateralize the Letter of Credit Obligations (in
an amount equal to the then Outstanding Amount thereof); and




     (d) exercise on behalf of itself, the Lenders and the Letter of Credit Issuer all
rights and remedies available to it, the Lenders and the Letter of Credit Issuer under the
Loan Documents;


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




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




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




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




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




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




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




     Sixth, to payment of that portion of the Obligations constituting all amounts
owed under any Swap Contract included in the Obligations (at the Swap Termination Value),
ratably among the Lenders in proportion to the respective amounts described in this clause
Sixth held by them;




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




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


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




ARTICLE IX.

ADMINISTRATIVE AGENT




     9.01 Appointment and Authority. Each of the Lenders and the Letter of Credit Issuer hereby
irrevocably appoints Regions Bank to act on its behalf as the Administrative Agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof
or thereof, together with such actions and powers as are reasonably incidental thereto. The
provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and
the Letter of Credit Issuer, and the Borrower shall not have rights as a third party beneficiary of
any of such provisions.



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



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




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




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




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




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



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



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



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



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



     9.06 Resignation or Removal of Administrative Agent. The Administrative Agent may at any time
give notice of its resignation to the Lenders, the Letter of Credit Issuer and the Borrower, and
the Administrative Agent may be removed at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the right, in consultation
with the Borrower, to appoint a successor, which shall be a bank with an office in the United
States, or an Affiliate of any such bank with an office in the United States. If no such successor
shall have been so appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent’s giving of notice of its resignation or the
Required Lenders’ removal of the retiring Administrative Agent, then the retiring Administrative
Agent may on behalf of the Lenders and the Letter of Credit Issuer, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation or removal shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents and (2) all payments,
communications and determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender and the Letter of Credit Issuer directly, until such
time as the Required Lenders appoint a successor Administrative Agent as provided for above in this
Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and



89









 




become vested with all of the rights, powers, privileges and duties of the retiring (or
retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its
duties and obligations hereunder or under the other Loan Documents (if not already discharged
therefrom as provided above in this Section). The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative Agent’s resignation or
removal hereunder and under the other Loan Documents, the provisions of this Article and
Section 10.04 shall continue in effect for the benefit of such retiring Administrative
Agent, its sub-agents and their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.




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



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



     9.08 No Other Duties, Etc. Anything herein to the contrary notwithstanding, neither the Lead
Arranger nor any other arranger or agent shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, Syndication Agent, Documentation Agent, a Lender or the Letter of Credit
Issuer hereunder.



     9.09 Administrative Agent May File Proofs of Claim. In case of the pendency of any proceeding
under any Bankruptcy Law or any other judicial proceeding relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan or Letter of Credit
Obligation shall then be due and payable as herein expressed or by declaration or



90









 




otherwise and irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise





     (a) to file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, Letter of Credit Obligations and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary or advisable
in order to have the claims of the Lenders, the Letter of Credit Issuer and the
Administrative Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the Letter of Credit Issuer and the
Administrative Agent and their respective agents and counsel and all other amounts due the
Lenders, the Letter of Credit Issuer and the Administrative Agent under Sections
2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and




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


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




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



     9.10 Collateral and Guaranty Matters. Lenders and the Letter of Credit Issuer irrevocably
authorize Administrative Agent, at its option and in its discretion,




     (a) to release any Lien on any property granted to or held by Administrative Agent
under any Loan Document (i) upon termination of the commitment of each Lender to make Loans
and payment in full of all Obligations (other than contingent indemnification obligations)
and the expiration or termination of all Letters of Credit, (ii) that is sold or to be sold
as part of or in connection with any sale permitted hereunder or under any other Loan
Document, or (iii) subject to Section 10.01, if approved, authorized or ratified in
writing by the Required Lenders; and




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



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Upon request by Administrative Agent at any time, the Required Lenders will confirm in writing
Administrative Agent’s authority to release or subordinate its interest in particular types or
items of property, or to release any Guarantor from its obligations under any Guaranty pursuant to
this Section 9.10.




ARTICLE X.

MISCELLANEOUS




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




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




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




     (c) postpone any date fixed by this Agreement or any other Loan Document for any
payment (not including any mandatory prepayment) of principal, interest, fees or other
amounts due to the Lenders (or any of them) or any scheduled or mandatory reduction of the
Total Commitments hereunder or under any other Loan Document without the written consent of
each Lender directly affected thereby;




     (d) reduce the principal of, or the rate of interest specified herein on, any Loan or
Letter of Credit Borrowing, or (subject to clause (iv) of the second proviso to this
Section 10.01) any fees or other amounts payable hereunder or under any other Loan
Document without the written consent of each Lender directly affected thereby;
provided, however, that only the consent of the Required Lenders shall be
necessary to amend the definition of “Default Rate” or to waive any obligation of the
Borrower to pay interest or Letter of Credit Fees at the Default Rate;




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




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



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     (g) release any Guarantor from any Guaranty or all or substantially all of the value of
any Guaranty without the written consent of each Lender, except to the extent the release of
any Guarantor is permitted pursuant to Section 9.10 (in which case such release may
be made by Administrative Agent acting alone); or




     (h) release all or substantially all of the collateral securing the Obligations without
the written consent of each Lender, except for collateral sold or otherwise disposed as
permitted in the Loan Documents, and except to the extent the release of any collateral is
permitted pursuant to Section 9.10 (in which case such release may be made by
Administrative Agent acting alone) or this Section 10.01;


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




     10.02 Notices; Effectiveness; Electronic Communication.




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




     (i) if to the Borrower, the Administrative Agent, the Letter of Credit Issuer
or the Swing Line Lender, to the address, telecopier number, electronic mail address
or telephone number specified for such Person on Schedule 10.02; and




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




Notices sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal business



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hours for the recipient, shall be deemed to have been given at the opening of business on
the next business day for the recipient). Notices delivered through electronic
communications to the extent provided in subsection (b) below, shall be effective as
provided in such subsection (b).




     (b) Electronic Communications. Notices and other communications to the Lenders
and the Letter of Credit Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not apply to
notices to any Lender or the Letter of Credit Issuer pursuant to Article II if such
Lender or the Letter of Credit Issuer, as applicable, has notified the Administrative Agent
that it is incapable of receiving notices under such Article by electronic communication.
The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to procedures
approved by it, provided that approval of such procedures may be limited to
particular notices or communications.




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




     (c) Change of Address, Etc. Each of the Borrower, the Administrative Agent,
the Letter of Credit Issuer and the Swing Line Lender may change its address, telecopier or
telephone number for notices and other communications hereunder by notice to the other
parties hereto. Each other Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the Borrower, the Administrative
Agent, the Letter of Credit Issuer and the Swing Line Lender. In addition, each Lender
agrees to notify the Administrative Agent from time to time to ensure that the
Administrative Agent has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other communications may
be sent and (ii) accurate wire instructions for such Lender.




     (d) Reliance by Administrative Agent, Letter of Credit Issuer and Lenders. The
Administrative Agent, the Letter of Credit Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Revolving Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not
made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the terms



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thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify the Administrative Agent, the Letter of Credit Issuer, each Lender and the Related
Parties of each of them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other telephonic communications with the Administrative Agent may be
recorded by the Administrative Agent, and each of the parties hereto hereby consents to such
recording.



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



     10.04 Expenses; Indemnity; Damage Waiver.




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




     (b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), the Syndication Agent, the Documentation
Agent, any other agent, each Lender and the Letter of Credit Issuer, and each Related Party
of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the reasonable fees, charges and disbursements
of any counsel for any Indemnitee), incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by the Borrower or any other Loan
Party arising out of, in connection with, or as a result of (i) the execution or delivery of



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this Agreement, any other Loan Document or any agreement or instrument contemplated hereby
or thereby, the performance by the parties hereto of their respective obligations hereunder
or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in
the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties
only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or
Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal
by the Letter of Credit Issuer to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with the terms of
such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of
its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by the Borrower or any other Loan Party, and
regardless of whether any Indemnitee is a party thereto, IN ALL CASES, WHETHER OR NOT CAUSED
BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE
OF THE INDEMNITEE; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or related expenses
(x) are determined by a court of competent jurisdiction by final and nonappealable judgment
to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y)
result from a claim brought by the Borrower or any other Loan Party against an Indemnitee
for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if the Borrower or such Loan Party has obtained a final and nonappealable judgment
in its favor on such claim as determined by a court of competent jurisdiction.




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




     (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Borrower shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection with, or as



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a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of
the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any
damages arising from the use by unintended recipients of any information or other materials
distributed to such unintended recipients by such Indemnitee through telecommunications, electronic
or other information transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for direct or actual
damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined
by a final and nonappealable judgment of a court of competent jurisdiction.




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




     (f) Survival. The agreements in this Section shall survive the resignation or
removal of the Administrative Agent, the Letter of Credit Issuer and the Swing Line Lender,
the replacement of any Lender, the termination of the Total Commitments and the repayment,
satisfaction or discharge of all the other Obligations.



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



     10.06 Successors and Assigns.




     (a) Successors and Assigns Generally. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither the Borrower nor any other
Loan Party may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an
assignee in accordance with the provisions of subsection (b) of this Section,



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(ii) by way of participation in accordance with the provisions of subsection (d) of this Section,
or (iii) by way of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the
extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the
Letter of Credit Issuer and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.




     (b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans (including for purposes of this subsection (b),
participations in Letter of Credit Obligations and in Swing Line Loans) at the time owing to
it); provided that any such assignment shall be subject to the following conditions:




     (i) Minimum Amounts. The aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative Agent
or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $7,500,000 or an amount equal to the entire remaining
amount of the assigning Lender’s Commitment and the Loans at the time owing to it,
unless each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents (each such consent not
to be unreasonably withheld or delayed).




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




     (iii) Consents. In addition to the consent required by subsection
(b)(i) of this Section, the following consents are required:




     (A) the consent of the Borrower (such consent not to be unreasonably
withheld or delayed) shall be required unless (1) an Event of Default has
occurred and is continuing at the time of such assignment or (2) such
assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;



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     (B) the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for each assignment; and




     (C) the consent of the Letter of Credit Issuer (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment that
increases the obligation of the assignee to participate in exposure under
one or more Letters of Credit (whether or not then outstanding);




     (iv) Assignment and Assumption. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee in the amount of $3,500 for each
assignment; provided, however, (A) no fee shall be due and payable
if any Assignor is assigning to an Affiliate of such Assignor and (B) the
Administrative Agent may, in its sole discretion, elect to waive such processing and
recordation fee in the case of any assignment. The assignee, if it is not a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire.




     (v) No Assignment to Borrower. No such assignment shall be made to the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.




     (vi) No Assignment to Natural Persons. No such assignment shall be
made to a natural person.




Subject to acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and,
to the extent of the interest assigned by such Assignment and Assumption, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall,
to the extent of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and Assumption
covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits
of Sections 3.01, 3.04, 3.05, and 10.04 with respect to
facts and circumstances occurring prior to the effective date of such assignment. Upon
request, the Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any
assignment or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with subsection
(d) of this Section.




     (c) Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitments of, and principal amounts of



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the Loans and
Letter of Credit Obligations owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”). The entries in the Register shall be presumptively correct,
and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name
is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.




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




     Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to Section 10.01 that affects such Participant.
Subject to subsection (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the
same extent as if it were a Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section. To the extent permitted by law, each Participant also shall
be entitled to the benefits of Section 10.08 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.13 and
Section 10.07 as though it were a Lender.




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




     (f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including under its Note,



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




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




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



     10.07 Treatment of Certain Information; Confidentiality. Each of the Administrative Agent,
the Lenders and the Letter of Credit Issuer agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed



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



     For purposes of this Section, “Information” means all information received from the
Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any of their respective
businesses and customers, other than any such information that is available to the Administrative
Agent, any Lender or the Letter of Credit Issuer on a nonconfidential basis prior to disclosure by
the Borrower or any Subsidiary. 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 commercially reasonable efforts to protect the confidentiality of such
Information.



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



     10.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each
Lender, the Letter of Credit Issuer and each of their respective Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by applicable Law, to set off and
apply any and all deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any time owing by such
Lender, the Letter of Credit Issuer or any such Affiliate to or for the credit or the account of
the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such
Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender
or the Letter of Credit Issuer, irrespective of whether or not such Lender or the Letter of Credit
Issuer shall have made any demand under this Agreement or any other Loan Document and although such
obligations of the Borrower or such Loan Party may be



102









 




contingent or unmatured or are owed to a branch or office of such Lender or the Letter of Credit
Issuer different from the branch or office holding such deposit or obligated on such indebtedness.
The rights of each Lender, the Letter of Credit Issuer and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of setoff) that such
Lender, the Letter of Credit Issuer or their respective Affiliates may have. Each Lender and the
Letter of Credit Issuer agrees to notify the Borrower and the Administrative Agent promptly after
any such setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.




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



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



     10.11 Survival of Representations and Warranties. All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or
in connection herewith or therewith shall survive the execution and delivery hereof and thereof.
Such representations and warranties have been or will be relied upon by the Administrative Agent
and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or
on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default at the time of any Credit Extension, and shall continue in full force
and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied
or any Letter of Credit shall remain outstanding.



     10.12 Severability. If any provision of this Agreement or the other Loan Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the



103









 







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



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




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




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




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




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



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



     10.14 Governing Law; Jurisdiction; Etc.




     (a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF TEXAS.




     (b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS,



104









 







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




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




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



     10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR



105









 




ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.




     10.16 No Advisory or Fiduciary Responsibility. In connection with all aspects of each
transaction contemplated hereby, the Borrower and each other Loan Party acknowledges and agrees,
and acknowledges its Affiliates’ understanding, that: (i) the credit facility provided for
hereunder and any related arranging or other services in connection therewith (including in
connection with any amendment, waiver or other modification hereof or of any other Loan Document)
are an arm’s-length commercial transaction between the Borrower, each other Loan Party and their
respective Affiliates, on the one hand, and the Administrative Agent and the Lead Arranger, on the
other hand, and the Borrower and each other Loan Party is capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent
and the Lead Arranger, each is and has been acting solely as a principal and is not the financial
advisor, agent or fiduciary, for the Borrower, any other Loan Party or any of their respective
Affiliates, stockholders, creditors or employees or any other Person; (iii) neither the
Administrative Agent nor the Lead Arranger has assumed or will assume an advisory, agency or
fiduciary responsibility in favor of the Borrower or any other Loan Party with respect to any of
the transactions contemplated hereby or the process leading thereto, including with respect to any
amendment, waiver or other modification hereof or of any other Loan Document (irrespective of
whether the Administrative Agent or the Lead Arranger has advised or are currently advising the
Borrower, any other Loan Party or any of their
respective Affiliates on other matters) and neither the Administrative Agent nor the Lead
Arranger has any obligation to the Borrower, any other Loan Party or any of their respective
Affiliates with respect to the transactions contemplated hereby except those obligations expressly
set forth herein and in the other Loan Documents; (iv) the Administrative Agent and the Lead
Arranger and their respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower, the other Loan Parties and their
respective Affiliates, and neither the Administrative Agent nor the Lead Arranger has any
obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Administrative Agent and the Lead Arranger has not provided and will not
provide any legal, accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby (including any amendment, waiver or other modification hereof or of any other
Loan Document) and each of the Borrower and the other Loan Parties has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate. Each of the
Borrower and the other Loan Parties hereby waives and releases, to the fullest extent permitted by
law, any claims that it may have against the Administrative Agent and the Lead Arranger with
respect to any breach or alleged breach of agency or fiduciary duty.



106









 





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



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



[Remainder of the Page Intentionally Left Blank.

Signature Pages to Follow.]




107












 





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



	 	 	 	 	 
	 	PENSON WORLDWIDE, INC.

 	 
	 	By:  	/s/ Daniel P. Son
 	 
	 	 	Name:  	Daniel P. Son 	 
	 	 	Title:  	President 	 
	 



Signature Page to Second Amended and Restated Credit Agreement







 









 








	 	 	 	 	 
	 	REGIONS BANK,



as Administrative Agent, a Lender, Letter of Credit

Issuer and Swing Line Lender

 	 
	 	By:  	/s/ Robin Ingari
 	 
	 	 	Name:  	Robin Ingari 	 
	 	 	Title:  	Sr. Vice President 	 
	 



Signature Page to Second Amended and Restated Credit Agreement







 









 








	 	 	 	 	 
	 	COMPASS BANK, successor in interest to 
Guaranty
Bank, as a Lender

 	 
	 	By:  	/s/ Stephanie Cox
 	 
	 	 	Name:  	Stephanie Cox 	 
	 	 	Title:  	Sr. Vice President 	 
	 



Signature Page to Second Amended and Restated Credit Agreement







 









 








	 	 	 	 	 
	 	CAPITAL ONE, N.A., as a Lender and as

Co-Documentation Agent

 	 
	 	By:  	/s/ Jacob Villere
 	 
	 	 	Name:  	Jacob Villere 	 
	 	 	Title:  	Vice President, U.S. Corporate Dept. 	 
	 



Signature Page to Second Amended and Restated Credit Agreement







 









 








	 	 	 	 	 
	 	TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, as a
Lender and as Co-Documentation Agent

 	 
	 	By:  	/s/ Paul Howell
 	 
	 	 	Name:  	Paul Howell 	 
	 	 	Title:  	Sr. Vice President 	 
	 



Signature Page to Second Amended and Restated Credit Agreement







 









 








	 	 	 	 	 
	 	THE PRIVATEBANK AND TRUST 
COMPANY, as a Lender
and as Syndication Agent

 	 
	 	By:  	/s/ Ronald Fontenot
 	 
	 	 	Name:  	Ronald Fontenot 	 
	 	 	Title:  	Associate Managing Director 	 
	 



Signature Page to Second Amended and Restated Credit Agreement







 









 








	 	 	 	 	 
	 	UNION BANK, N.A., as a Lender

 	 
	 	By:  	/s/ Megan R. Webster
 	 
	 	 	Name:  	Megan R. Webster 	 
	 	 	Title:  	Vice President 	 
	 



Signature Page to Second Amended and Restated Credit Agreement





 












 





EXHIBIT A




FORM OF REVOLVING LOAN NOTICE




Date:                     ,           





	To:  	 	Regions Bank, as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of
May 6, 2010 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as therein
defined), among Penson Worldwide, Inc., a Delaware corporation (the “Borrower”), the
Lenders from time to time party thereto, and Regions Bank, as Administrative Agent, Letter of
Credit Issuer and Swing Line Lender.



     The undersigned hereby requests (select one):




 ̈ A Revolving Borrowing;




 ̈ A conversion of Revolving Loans;




 ̈ A continuation of LIBOR Rate Loans;




	 	1.	 	On                                                              (a Business Day).
	 
	 	2.	 	In the amount of $                                        .
	 
	 	3.	 	Comprised of                                         .

[Type of Revolving Loan requested]
	 
	 	4.	 	For LIBOR Rate Loans: with an Interest Period of                months.





     The Revolving Borrowing, if any, requested herein complies with the provisos to the first
sentence of Section 2.01 of the Agreement.



	 	 	 	 	 
	 	PENSON WORLDWIDE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



A-1

Form of Revolving Loan Notice






 









 








EXHIBIT B




FORM OF SWING LINE LOAN NOTICE





     Date:                     ,           




	To:  	 	Regions Bank, as Swing Line Lender

Regions Bank, as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of
May 6, 2010 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as therein
defined), among Penson Worldwide, Inc., a Delaware corporation (the “Borrower”), the
Lenders from time to time party thereto, and Regions Bank, as Administrative Agent, Letter of
Credit Issuer and Swing Line Lender.



     The undersigned hereby requests a Swing Line Borrowing:




	 	1.	 	On                                                                              
    (a Business Day).
	 
	 	2.	 	In the amount of $                              .





     The Swing Line Borrowing requested herein complies with the requirements of the provisos to
the first sentence of Section 2.04(a) of the Agreement.



	 	 	 	 	 
	 	PENSON WORLDWIDE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



B-1

Form of Swing Line Loan Notice





 









 








EXHIBIT C




FORM OF NOTE




			
	 	 	 
	$                              
	 	                              , 20     






     FOR VALUE RECEIVED, the undersigned (the “Borrower”) hereby promises to pay to
                                         or registered assigns (the “Lender”), in accordance with the
provisions of the Agreement (as hereinafter defined), the principal amount of
                                          DOLLARS ($                
    ) or such lesser amount as may from time to time be advanced by the Lender to
the Borrower and outstanding, including accrued interest thereon, under that certain Second Amended
and Restated Credit Agreement, dated as of the date hereof (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the “Agreement;” the terms
defined therein being used herein as therein defined), among the Borrower, the Lenders from time to
time party thereto, and Regions Bank, as Administrative Agent, Letter of Credit Issuer and Swing
Line Lender.



     The Borrower promises to pay interest on the unpaid principal amount of each Loan from the
date of such Loan until such principal amount is paid in full, at such interest rates and at such
times as provided in the Agreement. Except as otherwise provided in Section 2.04(f) of the
Agreement with respect to Swing Line Loans, all payments of principal and interest shall be made to
the Administrative Agent for the account of the Lender in Dollars in immediately available funds at
the Administrative Agent’s Office. If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date
of actual payment (and before as well as after judgment) computed at the per annum rate set forth
in the Agreement.



     This Note is one of the Notes referred to in the Agreement, is entitled to the benefits
thereof and may be prepaid in whole or in part subject to the terms and conditions provided
therein. Upon the occurrence and continuation of one or more of the Events of Default specified in
the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable all as provided in the Agreement. Loans made by the Lender shall
be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary
course of business. The Lender may also attach schedules to this Note and endorse thereon the
date, amount and maturity of its Loans and payments with respect thereto.



     The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, demand, dishonor and non-payment of this Note.



     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.



	 	 	 	 	 
	 	PENSON WORLDWIDE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



C-1

Form of Note






 









 








EXHIBIT D




FORM OF COMPLIANCE CERTIFICATE




Financial Statement Date:                     ,





	To:  	 	Regions Bank, as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of
May 6, 2010 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as therein
defined), among Penson Worldwide, Inc., a Delaware corporation (the “Borrower”), the
Lenders from time to time party thereto, and Regions Bank, as Administrative Agent, Letter of
Credit Issuer and Swing Line Lender.



     The undersigned Responsible Officer hereby certifies as of the date hereof that he/she is the
                                                             of the Borrower, and that, as such, he/she is authorized to execute and deliver this Certificate to
the Administrative Agent on the behalf of the Borrower, and in such capacity, on behalf of
Borrower, that:



[Use following paragraph 1 for fiscal year-end financial statements]




     1. Attached hereto as Schedule 1 are the year-end audited financial statements
required by Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as
of the above date, together with the report and opinion of a Registered Public Accounting Firm
required by such section.



[Use following paragraph 1 for fiscal quarter-end financial statements]




     1. Attached hereto as Schedule 1 are the unaudited financial statements required by
Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as of the
above date. Such financial statements fairly present the financial condition, results of
operations, shareholders’ equity and cash flows of the Borrower and its Subsidiaries in accordance
with GAAP as at such date and for such period, subject only to normal year-end audit adjustments
and the absence of footnotes.



     2. The undersigned has reviewed and is familiar with the terms of the Agreement and has made,
or has caused to be made under his/her supervision, a review of the transactions and condition
(financial or otherwise) of the Borrower during the accounting period covered by the attached
financial statements.



     3. A review of the activities of the Borrower during such fiscal period has been made under
the supervision of the undersigned with a view to determining whether during such fiscal period the
Borrower performed and observed all its Obligations under the Loan Documents, and



D-1

Form of Compliance Certificate





 









 








[select one:]




     [to the best knowledge of the undersigned, the Borrower is in compliance with each covenant
and condition of the Loan Documents applicable to it, and no Default has occurred and is
continuing.]



—or—




     [the Borrower is not in compliance with the following covenants or conditions and the
following is a list of each Default which has occurred and is continuing and its nature and
status:]



     4. The representations and warranties of the Borrower contained in Article V of the
Agreement, and any representations and warranties of any Loan Party that are contained in any
document furnished at any time under or in connection with the Loan Documents, are true and correct
on and as of the date hereof, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct as of such earlier
date, and except that for purposes of this Compliance Certificate, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01 of the Agreement, including the statements in connection with
which this Compliance Certificate is delivered.



     5. The financial covenant analyses and information set forth on Schedule 2 attached
hereto are true and accurate on and as of the date of this Certificate.



     IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as of
                    ,           .



	 	 	 	 	 
	 	PENSON WORLDWIDE, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



D-2

Form of Compliance Certificate






 









 








SCHEDULE 1

to the Compliance Certificate




Financial Statements



D-3

Form of Compliance Certificate





 











 





For the Quarter/Year ended __________________(“Statement Date”)



SCHEDULE 2

to the Compliance Certificate




	 	 	 	 	 	 	 	 	 	 	 	 	 

	I.	 	Section 7.16(a) — Consolidated Tangible Net Worth.	 	 	 	 
	 	 	A.	 	Consolidated Tangible Net Worth at Statement Date:	 	 	 	 
	 

	 	 	 	1.	 	 	 	Shareholders’ Equity of Borrower and its Subsidiaries:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	2.	 	 	 	Intangible Assets of Borrower and its Subsidiaries:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	3.	 	 	 	Consolidated Tangible Net Worth (Line I.A.1 less Line I.A.2):
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	$****	 	 	$	 ****	 
	 	 	C.	 	100% of the net aggregate increases in Shareholders’ Equity of the
Borrower and its Subsidiaries after the Closing Date from issuance and sale
of Equity Interests (other than issuances to the Borrower or a wholly-owned
Subsidiary, issuances of restricted stock units pursuant to the 2000 Stock
Incentive Plan, securities issued upon the exercise of stock options, or
issuances of securities pursuant to the Borrower’s employee stock purchase
plan) (including from conversion of debt securities):	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	D.	 	50% of Consolidated Net Income for the fiscal year ended on the Statement
Date:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	E.	 	Goodwill and other intangibles associated with (1) acquisitions completed
prior to the Closing Date and previously disclosed to the Administrative
Agent and (2) the Ridge Acquisition:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	F.	 	Minimum required Consolidated Tangible Net Worth
(Line I.B plus Line I.C plus Line 1.D minus Line 1.E):	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	G.	 	Excess (deficiency) for covenant compliance (Line I.A.3 - I.F):	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	H.	 	Compliance (Yes/No):	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	II.	 	Section 7.16 (b) — Consolidated Fixed Charge Coverage Ratio.	 	 	 	 
	 	 	A.	 	Consolidated EBITDA for four consecutive fiscal quarters ending on above
date (“Subject Period”):	 	 	 	 
	 

	 	 	 	1.	 	 	 	Consolidated Net Income for Subject Period:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	2.	 	 	 	Interest Charges for Subject Period:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	3.	 	 	 	Provision for Federal, state, local and foreign income taxes
payable by Borrower and its Subsidiaries for Subject Period:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 






D-4

        Form of Compliance Certificate






 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 

	 

	 	 	 	4.	 	 	 	Depreciation and amortization expense:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	5.	 	 	 	Non-cash stock based compensation:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	6.	 	 	 	Costs, expenses and fees incurred in connection with the
Ridge Acquisition, the 2017 Notes Offering, the 2014 Notes
Offering, the Existing Credit Agreement, and this Agreement:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	7.	 	 	 	Federal, state, local and foreign income tax credits of
Borrower and its Subsidiaries for Subject Period:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	8.	 	 	 	Non-cash items increasing Consolidated Net Income for
Subject Period:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	9.	 	 	 	For the 12-month period following the closing of the Ridge
Acquisition, $1,050,000 for any month (commencing with the
first full month after the closing of the Ridge Acquisition)
for which the actual EBITDA earned by PFS and attributable to
correspondent clearing contracts acquired in the Ridge
Acquisition is not included in the calculation of Consolidated
EBITDA:
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	10.	 	 	 	Consolidated EBITDA (Lines II.A.1 + IIA.2 + IIA.3 + IIA.4 +
IIA.5 + IIA.6) - (Lines IIA.7 + IIA.8) + Line IIA.9 (if
applicable):
	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Interest Charges for Subject Period:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	C.	 	Aggregate principal amount of regularly scheduled principal payments or
redemptions or similar acquisitions for value of outstanding debt for
borrowed money (it being understood the Total Outstandings shall be assumed
to be amortized over a five year period solely in order to calculate
scheduled payments of the Loans):	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	D.	 	Aggregate amount of Federal, state, local and foreign income taxes paid
in cash of or by the Borrower and its Subsidiaries for Subject Period:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	E.	 	Consolidated Fixed Charge Coverage Ratio (Line II.A.10  ̧ (Lines
II.B + II.C + II.D))	 	 	_____ to ****

	 	 	F.	 	Minimum required:	 	**** to ****

	 	 	G.	 	Compliance (Yes/No):	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	III.	 	Section 7.16 (c) — Consolidated Leverage Ratio.	 	 	 	 
	 	 	A.	 	Consolidated Funded Indebtedness at Statement Date:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Consolidated EBITDA for Subject Period (Line IIA.10):	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 







D-5

        Form of Compliance Certificate





 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	C.	 	Consolidated Leverage Ratio (Line III.A  ̧ Line III.B):	 	_______ to ****

	 	 	D.	 	Maximum permitted (see Section 7.16(c)):	 	_______ to ****

	 	 	E.	 	Compliance (Yes/No):	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	IV.	 	Section 7.16(d) — Minimum Capital Requirement.	 	 	 	 
	 	 	A.	 	Regulatory Capital at Statement Date:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Debit Balances at Statement Date:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	C.	 	Minimum required (Line IV.B. x 5.5%):	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	D.	 	Compliance (Yes/No):	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	V.	 	Section 7.16 (e) — Minimum Liquidity Requirement.	 	 	 	 
	 	 	A.	 	Unencumbered Liquidity at Statement Date:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Total Outstandings at Statement Date:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	C.	 	Compliance (Yes/No):	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	VI.	 	Section 7.16(f) — Capital Expenditures.	 	 	 	 
	 	 	A.	 	Capital Expenditures for Borrower and its Subsidiaries at Statement Date
since beginning of fiscal year:	 	 $	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Maximum Allowed (per fiscal year):	 	$	****	 
	 	 	C.	 	Compliance (Yes/No):	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 






D-6

        Form of Compliance Certificate






 









 






EXHIBIT E




ASSIGNMENT AND ASSUMPTION




     This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between
[the][each]1 Assignor identified in item 1 below ([the][each, an]
“Assignor”) and [the][each]2 Assignee identified in item 2 below
([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations
of [the Assignors][the Assignees]3 hereunder are several and not
joint.]4Capitalized terms used but not defined herein shall have the meanings given
to them in the Second Amended and Restated Credit Agreement identified below (the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard
Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated
herein by reference and made a part of this Assignment and Assumption as if set forth herein in
full.



     For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns
to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases
and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the
Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’]
rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under
the Credit Agreement and any other documents or instruments delivered pursuant thereto to the
extent related to the amount and percentage interest identified below of all of such outstanding
rights and obligations of [the Assignor][the respective Assignors] under the respective facilities
identified below (including, without limitation, the Letters of Credit and the Swing Line Loans
included in such facilities5) and (ii) to the extent permitted to be assigned under
applicable Law, all claims, suits, causes of action and any other right of [the Assignor (in its
capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)]
against any Person, whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee
pursuant to clauses (i) and (ii) above being referred to herein collectively as
[the][an] “Assigned Interest”). Each such sale and assignment is without recourse
to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without
representation or warranty by [the][any] Assignor.





 




			
	1	 	For bracketed language here and elsewhere in
this form relating to the Assignor(s), if the assignment is from a single
Assignor, choose the first bracketed language. If the assignment is from
multiple Assignors, choose the second bracketed language.
	 
	2	 	For bracketed language here and elsewhere in
this form relating to the Assignee(s), if the assignment is to a single
Assignee, choose the first bracketed language. If the assignment is to
multiple Assignees, choose the second bracketed language.
	 
	3	 	Select as appropriate.
	 
	4	 	Include bracketed language if there are either
multiple Assignors or multiple Assignees.
	 
	5	 	Include all applicable subfacilities.





E-1

Form of Assignment and Assumption





 









 












	1.	 	Assignor[s]: ____________________
	 
	2.	 	Assignee[s]: ____________________ [for each Assignee,
indicate [Affiliate][Approved Fund] of [identify
Lender]]
	 
	3.	 	Borrower: Penson Worldwide, Inc.
	 
	4.	 	Administrative Agent: Regions Bank, as the administrative agent under the Credit
Agreement
	 
	5.	 	Credit Agreement: Second Amended and Restated Credit Agreement, dated as of May 6,
2010, among Penson Worldwide, Inc., the Lenders from time to time party thereto, and Regions
Bank, as Administrative Agent, Letter of Credit Issuer, and Swing Line Lender
	 
	6.	 	Assigned Interest[s]:





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Assignor[s]6  	 	Assignee[s]7	 	 	Facility

Assigned8
	 	 	Aggregate

Amount of

Commitment/Loans

for all Lenders9
 	 	 	Amount of

Commitment/

Loans

Assigned
 	 	 	Percentage

Assigned of

Commitment/

Loans10
 	 	 	CUSIP

Number	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 $		 	 	 $		 	 	 	 		% 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 $		 	 	 $		 	 	 	 		% 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 $		 	 	 $		 	 	 	 		% 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 






	[7. Trade Date: __________________]11




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




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



	 	 	 	 	 
	 	ASSIGNOR



[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 





 




			
	6	 	List each Assignor, as appropriate.
	 
	7	 	List each Assignee, as appropriate.
	 
	8	 	Fill in the appropriate terminology for the
types of facilities under the Credit Agreement that are being assigned under
this Assignment.
	 
	9	 	Amounts in this column and in the column
immediately to the right to be adjusted by the counterparties to take into
account any payments or prepayments made between the Trade Date and the
Effective Date.
	 
	10	 	Set forth, to at least 9 decimals, as a
percentage of the Commitment/Loans of all Lenders thereunder.
	 
	11	 	To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of
the Trade Date.





E-2

Form of Assignment and Assumption





 









 









	 	 	 	 	 
	 	ASSIGNEE



[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 



	 	 	 	 	 
	Consented to and Accepted:



REGIONS BANK, as

Administrative Agent
 
	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 	 
	Consented to:



PENSON WORLDWIDE, INC.

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 	 



E-3

Form of Assignment and Assumption





 









 








ANNEX 1 TO ASSIGNMENT AND ASSUMPTION




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION





     1. Representations and Warranties.



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




          1.2. Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all the requirements to be an assignee under Section
10.06(b)(iii), (v) and (vi) of the Credit Agreement (subject to such consents,
if any, as may be required under Section 10.06(b)(iii) of the Credit Agreement), (iii) from
and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a
Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire
assets of the type represented by [the][such] Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire [the][such] Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement,
and has received or has been accorded the opportunity to receive copies of the most recent
financial statements delivered pursuant to Section 6.01(a) or (b) thereof, as
applicable, and such other documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to purchase [the][such]
Assigned Interest, (vi) 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 Assignment and Assumption and to purchase
[the][such] Assigned Interest; and (vii) if it is a Foreign Lender, attached hereto is any
documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and
without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based
on such documents and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Loan Documents, and




E-4

Form of Assignment and Assumption





 









 







(ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan
Documents are required to be performed by it as a Lender.




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



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



E-5

Form of Assignment and Assumption






 









 








EXHIBIT F




OPINION MATTERS




Form of Opinion



[See attached.]



Exhibit F

Opinion Matters





 











 





PENSON WORLDWIDE, INC.



May __, 2010




Regions Bank, as Administrative Agent,

under the Second Amended and Restated Credit Agreement referred to herein,

and the Lenders referred to below



Ladies and Gentlemen:




     I have acted as counsel to Penson Worldwide Inc., a Delaware corporation (the “Borrower”), in
connection with the Second Amended and Restated Credit Agreement dated as of May __, 2010 (the
“Credit Agreement”), among the Borrower, the lenders party thereto (the “Lenders”), Regions Bank,
as Administrative Agent for the Lenders (the “Agent”), and the other parties thereto. I have also
acted as counsel to SAI Holdings, Inc., a Texas corporation (“SAI”), and Penson Holdings, Inc., a
Delaware corporation (“Penson Holdings”), in connection with Credit Agreement. SAI and Penson
Holdings are sometimes collectively referred to herein as the “Guarantors.” The Borrower, SAI and
Penson Holdings are sometimes collectively referred to herein as the “Pledgors.” The Borrower, the
Guarantors and the Pledgors are sometimes collectively referred to herein as the “Penson Entities.”
Terms defined in the Credit Agreement are used as therein defined, unless otherwise defined
herein. Unless otherwise indicated, references to the “UCC” shall mean the UCC as defined in the
Pledge Agreement (as herein defined). This opinion letter is being delivered to you pursuant to
Section 4.01(a)(viii) of the Credit Agreement.



     In connection with this opinion, I have examined an executed copy of (a) the Credit Agreement,
(b) the Guaranty dated the date hereof by each of SAI and Penson Holdings in favor of Regions Bank,
as Administrative Agent for the Lenders, (c) the Pledge Agreement dated the date hereof between
each of the Borrower, SAI and Penson Holdings and Regions Bank, as Administrative Agent and Secured
Party; (d) the promissory notes by the Borrower on the date hereof in favor of any Lenders
requesting a Note pursuant to the terms of the Credit Agreement; and (e) unfiled copies of the
Amendments to the UCC-1 Financing Statements referred to in Schedule 1 hereto (the “Amendments to
the UCC-1 Financing Statements”) (the documents referred to in clauses (a)-(d) are referred to
herein at times as the “Applicable Loan Documents”), and such other documents, records, agreements
and certificates as I have deemed appropriate. I have also reviewed such matters of Texas, Delaware
General Corporation Law and Federal law (collectively, “Applicable Law”) as I have considered
relevant for the purpose of this opinion.



     I have assumed the genuineness of all signatures, the legal capacity of all natural persons,
the authenticity of all documents submitted to me as originals, the conformity to the original
documents of all documents submitted to me as certified, facsimile, pdf or photostatic copies, and
the authenticity of the originals of all documents submitted to me



 









 




as copies. I have also assumed that the Applicable Loan Documents have been duly executed by the
Administrative Agent, Letter of Credit Issuer, Swingline Bank and Lenders and delivered by the
parties thereto. As to certain factual matters, I have relied, without any independent
verification, upon certificates provided by public officials and certificates of officers of the
Borrower. I have also assumed the accuracy and completeness of representations and warranties of
each of the respective Penson Entities set forth in the Applicable Loan Documents and the due
performance by each party of its respective obligations under such documents, and that each of the
Applicable Loan Documents constitutes a valid and binding obligation of all parties other than the
Penson Entities and are enforceable in accordance with their terms against all parties other than
the Penson Entities. As to any facts that are relevant to the opinions hereinafter expressed, I
have relied solely upon the representations of the respective Penson Entities set forth in the
Applicable Loan Documents together with a certificate in support of this opinion dated the date
hereof of the Chief Executive Officer of the Borrower, the Executive Vice President of SAI and the
President of Penson Holdings. Except as specifically set forth herein, I have not undertaken any
search of any filings of any governmental authority or agency or with any court or arbitrator, nor
have I undertaken any independent investigation to determine the accuracy of facts material to any
such statement or opinion, and no inference as to such statement or opinion should be drawn from
the fact of my representation of the Penson Entities.




     In rendering the opinions set forth herein, whenever a statement or opinion herein is
qualified by “to my knowledge,” or by words of similar import, it is intended to indicate that,
during the course of my representation of the Penson Entities, no information has come to my
attention that gives me actual knowledge of the inaccuracy of such statement or opinion. Except as
specifically set forth herein, I have not undertaken any independent investigation to determine the
accuracy of facts material to any such statement or opinion, and no inference as to such statement
or opinion should be drawn from the fact of my representation of the Penson Entities or employment
with the Borrower. In making judgments in respect of matters of materiality, I have relied upon
other representatives of the Penson Entities in assessing the possible impact of such items.



     Based upon the foregoing, and to the limitations set forth below as well as in the Applicable
Loan Documents (and their respective schedules and exhibits), I am of the opinion that:




	 	1.	 	Each of the Borrower and Penson Holdings is a corporation validly existing and in
good standing under the laws of the State of Delaware with the corporate power and
authority to own its properties and to carry on its business as it is now conducted. SAI
is a corporation validly existing and in good standing under the laws of the State of
Texas with the corporate power and authority to own its properties and to carry on its
business as it is now conducted. Each of the Borrower and Penson Holdings is duly
qualified to do business as a foreign corporation in the State of Texas.




 









 












	 	2.	 	Each of the Penson Entities has the corporate power and corporate authority to
execute, deliver, and perform its obligations under the respective Applicable Loan
Documents to which it is a party.
	 
	 	3.	 	The execution, delivery, and performance by each of the respective Penson Entities of
the Applicable Loan Documents to which it is a party, and compliance with the terms and
provisions thereof, have been duly authorized by all requisite corporate action on such
party’s part and such Applicable Loan Documents, to which it is a party have been duly
executed and delivered by the respective Penson Entities party thereto.
	 
	 	4.	 	Each Applicable Loan Document is the valid and binding obligation of each Penson
Entity party thereto, enforceable against such Penson Entity in accordance with its terms.
	 
	 	5.	 	Execution and delivery by each of the respective Penson Entities of, and performance
of its agreements in, the Applicable Loan Documents do not (i) violate such party’s
respective Organization Documents, or breach, or result in a default under, any existing
obligation of such party under any agreements or obligations to which it is a party or by
which it is bound that are appended as exhibits to Borrower’s most recent Form 10-K on
file with the SEC, as to which a waiver has not been given or will not be given as of the
Closing Date or which has not been terminated prior to the Closing Date, (ii) breach or
otherwise violate any existing obligation of the Penson Entities under any court order
disclosed in the Applicable Loan Documents or an exhibit, annex or schedule thereto
delivered to the Administrative Agent, or (iii) result in any violation of any Federal law
of the United States, the law of the State of Texas or any regulation thereunder, or any
provision of the Delaware General Corporation Law.
	 
	 	6.	 	No consent, approval, waiver, license or authorization or other action by or filing
with any Governmental Authority on or prior to the Closing Date is required under the
Applicable Law in connection with the execution and delivery by the Borrower of the
Applicable Loan Documents to which it is a party, except for those already obtained or
completed.
	 
	 	7.	 	None of the Penson Entities are required to register as an “investment company” as
defined in the Investment Company Act of 1940, as amended.
	 
	 	8.	 	The provisions of the Pledge Agreement are effective to create in favor of the Agent,
to secure the Obligations, a valid security interest in all of each Pledgor’s right, title
and interest in and to that portion of the Collateral (as defined in the Pledge Agreement)
in which a security interest may be created under the UCC.
	 
	 	9.	 	The Amendments to the UCC-1 Financing Statements are in proper form to be accepted
for filing in the offices identified in Schedule 1 hereto. Under the UCC, the proper
places to file the Amendments to the UCC-1 Financing Statements are in the offices
identified in Schedule 1 hereto. To the extent that the filing of a




 









 






	 	 	 	financing statement can be effective to perfect a security interest in the Collateral (as
defined in the Pledge Agreement) under the UCC, the security interest in favor of the Agent
in that portion of the Collateral described in the Amendments to the UCC-1 Financing
Statements will be perfected upon the proper filing of the Amendments to the UCC-1
Financing Statements in the offices identified in Schedule 1 hereto.






	 	10.	 	There are no actions or proceedings against the Penson Entities pending or to my
knowledge, overtly threatened in writing, before any court, governmental agency or
arbitrator which (i) seek to affect the enforceability of the Applicable Loan Documents or
(ii) except as disclosed in the Applicable Loan Documents or an exhibit, annex or schedule
thereto or document or filing referenced therein, violate the standard expressly
established in the Credit Agreement for disclosure of the matters referred to in Section
5.06 of the Credit Agreement.





     My opinions expressed above are subject to the following additional limitations, exceptions,
qualifications and assumptions:




	 	A.	 	The opinions expressed herein are subject to Bankruptcy Laws and similar laws
affecting the rights and remedies of creditors generally and general principles of equity,
including concepts of materiality, unconscionability, reasonableness, good faith and fair
dealing.
	 
	 	B.	 	Provisions of the Applicable Loan Documents relating to indemnification, contribution
or exculpation may be limited by public policy or by law. The opinions expressed above are
limited to Applicable Law and I express no opinion as to the respect to the effect or
applicability of the laws of any other State or jurisdiction.
	 
	 	C.	 	For purposes of the opinions expressed in Section 1 as to the valid existence and
good standing of the Penson Entities and the due qualification of certain of the Penson
Entities as foreign corporations in the State of Texas, I have relied solely upon good
standing or similar certificates issued by the appropriate authorities in the subject
jurisdictions, and my opinion is as of the date of those certificates.
	 
	 	D.	 	For purposes of the opinion in paragraph 5(iii), I have considered only such laws and
regulations that in my experience are typically applicable to a transaction of the nature
contemplated by the Applicable Loan Documents.
	 
	 	E.	 	Certain waivers by the Penson Entities in the Applicable Loan Documents may relate to
matters that cannot, as a matter of law, be effectively waived.
	 
	 	F.	 	The enforceability of the Applicable Loan Documents may be limited by the
unenforceability under certain circumstances of provisions imposing penalties,
forfeitures, late payment charges or an increase in interest rate upon delinquency in
payment or an occurrence of default.
	 
	 	G.	 	Certain remedial and exculpatory provisions of the Applicable Loan Documents




 









 






	 	 	 	are or may be rendered unavailable or unenforceable in whole or in part under the laws of
the State of Texas, but in my opinion the laws of the State of Texas contain adequate
remedial provisions for the practical realization of the benefits intended to be provided
for in the Applicable Loan Documents.






	 	H.	 	I wish to point out that the provisions of the Applicable Loan Documents that permit
the Agent or the Lenders to take action or make determinations may be subject to a
requirement that such action be taken or such determination be made in a commercially
reasonable manner and in good faith.
	 
	 	I.	 	I express no opinion as to (i) any waivers or variations of rights of a debtor,
including a guarantor, or duties of a secured party under provisions referred to in
Section 9.602 of the UCC or (ii) any provision in the Applicable Loan Documents (a) that
may be deemed to permit Agent or any other person to sell or otherwise foreclose upon any
Collateral, or to apply the proceeds thereof, except in compliance with the UCC,
applicable laws of the United States of America and other applicable state and local laws,
or (b) that may be deemed to impose on Agent standards for the care of the Collateral in
the possession or control of the Agent that would violate Sections 9.207 or 9.208 of the
UCC or to render such standards inapplicable. Without limitation of the foregoing, I
express no opinion with respect to any provision to the extent that it authorizes the
Agent to purchase Collateral at a private sale, if such Collateral is neither customarily
sold in a recognized market nor the subject of widely distributed standard price
quotations. I call to your attention that Sections 9.611, 9.612 and 9.613 of the UCC
include requirements for notice in connection with a private sale or other disposition of
Collateral as well as a public sale, unless the Collateral is perishable or threatens to
decline speedily in value or is a type customarily sold in a recognized market.
	 
	 	J.	 	My opinions are subject to the effect of Section 552 of the United States Bankruptcy
Code (limiting security interests in property acquired after the commencement of a case
under the United States Bankruptcy Code). I call to your attention that under the
provisions of the UCC, certain third parties, such as buyers and lessees of goods in the
ordinary course of business, licensees of general intangibles (including software) in the
ordinary course of business, holders in due course of negotiable instruments, protected
purchasers of securities or certain purchasers of security entitlements or financial
assets, could acquire an interest in the Collateral free of the security interests of the
Agent, even though such security interests are perfected.
	 
	 	K.	 	I express no opinion with respect to (i) the existence, non-existence, ownership or
value of any Collateral, (ii) any part of the Collateral that is or may be such that a
security interest therein is not covered by Article 9 of the UCC by virtue of Section
9.109, and (iii) the perfection of the security interests in any portion of the Collateral
to the extent that filing of a financing statement is not or may not be sufficient to
perfect a security interest therein (whether as a result of requirements for control or
possession of such collateral, the applicability of preemptive United States laws or of
certificate of title statutes or otherwise).










 









 












	 	L.	 	I call to your attention that the security interest of the Agent in the Collateral
constituting “general intangibles” may be subject to the rights, claims and defenses of
account debtors and the terms of agreements with account debtors. In the case of any
Collateral which is in itself secured by other property, I express no opinion with respect
to the Agent’s rights in and to such underlying property.
	 
	 	M.	 	I call to your attention that the security interest of the Agent created under the
Applicable Loan Documents in any proceeds is limited to the extent set forth in Section
9.315 of the UCC.
	 
	 	N.	 	I express no opinion as to any actions that may be required to be taken periodically
under the UCC or other applicable law for the effectiveness of the Amendments to the UCC-1
Financing Statements or the validity or perfection of any security interest to be
maintained.
	 
	 	O.	 	Additionally, I express no opinion as to compliance with:






	 	(i)	 	applicable antifraud statutes, regulations or rules of applicable
state and federal laws concerning the offer, issuance or sale of securities,
including, without limitation, the accuracy and completeness of the information
provided by the Penson Entities in connection with the Applicable Loan Documents;
	 
	 	(ii)	 	any federal or state securities laws, tax laws, environmental laws,
pension and employee benefit laws, antitrust laws, usury laws or any local laws;
	 
	 	(iii)	 	the effect of the law of any jurisdiction which limits the rate of
interest legally chargeable or collectible;
	 
	 	(iv)	 	the enforceability of any provision of the Applicable Loan Documents
permitting modification thereof only by means of an agreement in writing signed by
the parties thereto;
	 
	 	(v)	 	enforceability of any provision of the Applicable Loan Documents
purporting to waive the right to trial by jury;
	 
	 	(vi)	 	enforceability of any provision of the Applicable Loan Documents
purporting to waive or limit the rights of any Penson Entity to assert claims
against or recover damages from any Lender or the Agent; and
	 
	 	(vii)	 	Provisions providing for venue in a particular jurisdiction.










 









 











     This opinion letter is effective only as of the date hereof. I do not assume responsibility
for updating this letter as of any subsequent date and I assume no responsibility for advising you
of any changes with respect to any matters described in this opinion letter that may occur
subsequent to the date of this opinion letter or from the discovery, subsequent to the date of
this opinion letter, of information not previously known to me pertaining to the events occurring
prior to such date. This opinion letter is solely for the benefit of the Administrative Agent and
Lenders only in connection with the execution of the Applicable Loan Documents and may not be used
or relied upon by the Administrative Agent, Lenders or any other person or entity for any other
purpose whatsoever, without my express prior written consent. This opinion letter may not be
quoted or used, or filed with any agency or person, without my express prior written consent.



	 	 	 	 	 
	 	Very truly yours,



Owen M. Scheurich, Esq.

 	 
	 	 	 
	 	 	 
	 	 	 
	 








 









 











Schedule 1




Amendments to UCC-1 Financing Statements



	 	 	 
	PLEDGOR	 	FILING OFFICE
	 
	 	 
	1. The Borrower

	 	Delaware Secretary of State
	 
	 	 
	2. SAI

	 	Texas Secretary of State
	 
	 	 
	3. Penson Holdings

	 	Delaware Secretary of State






 









 






EXHIBIT G




FORM OF GUARANTY




[See attached.]



Exhibit G 
Form of Guaranty

 












 





Amended and Restated Guaranty




     THIS AMENDED AND RESTATED GUARANTY AGREEMENT (this agreement, together with all amendments and
restatements and Joinders, this “Guaranty Agreement”), dated as of May 6, 2010, is made by each of
the signatories hereto and each other Person who becomes a party hereto pursuant to Section
23 (including any permitted successors and assigns, collectively, the “Guarantors” and each a
“Guarantor”) in favor of REGIONS BANK, in its capacity as Administrative Agent (as defined in the
Credit Agreement described below), for the benefit of each Creditor (Administrative Agent in such
capacity, “Administrative Agent”).



BACKGROUND.




     Penson Worldwide, Inc., a Delaware corporation (the “Borrower”), the Administrative Agent, and
the lenders party thereto previously executed that certain Amended and Restated Credit Agreement
dated as of May 1, 2009 (such agreement, together with all amendments prior to the date of this
Agreement, the “Existing Credit Agreement”).



     In connection with the Existing Credit Agreement, the Guarantors and the Administrative Agent
executed that certain Guaranty Agreement dated as of May 1, 2009 (such agreement, together with all
amendments prior to the date of this Agreement, the “Existing Guaranty”) to guarantee the
obligations described therein.



     The Borrower, the Administrative Agent, and the lenders party thereto are now entering into
that certain Second Amended and Restated Credit Agreement dated as of the date hereof (as may be
amended, restated, supplemented or modified from time to time, the “Credit Agreement”).



     It is a condition precedent to the effectiveness of the Credit Agreement that each Guarantor
shall have executed and delivered this Guaranty Agreement.



     It is the intention of the parties hereto to ratify and confirm the obligations of each
Guarantor pursuant to the Existing Guaranty, as amended and restated hereby.



     Each Guarantor is a Subsidiary of the Borrower, and each Guarantor will derive substantial
direct and indirect benefit from the making of the Loans and the issuance of Letters of Credit to
the Borrower under the Credit Agreement.



AGREEMENT.




     NOW, THEREFORE, in consideration of the premises set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order
to induce Creditors to (a) make the Loans and issue Letters of Credit under the Credit Agreement
and to extend other credit and financial accommodations under the Loan Documents, each Guarantor
hereby agrees with Administrative Agent, for the benefit of Creditors, as follows:



     1. Defined Terms.



          (a) As used herein, the following terms have the following meaning:







 









 








     “Creditor” or “Creditors” means (a) Administrative Agent, (c) Lenders, (d) the Letter of
Credit Issuer, and (e) any Related Party to whom any indemnification obligation is owed by any Loan
Party pursuant to any Loan Document.



     “Joinder” means a Guaranty Joinder in substantially the form of Exhibit A.



     “Permitted Liens” means Liens permitted by Section 7.01 of the Credit Agreement.



     “Release Date” means the date on which all of the conditions set forth in Section
9.10(a)(i) (other than in respect of inchoate obligations) of the Credit Agreement have been
satisfied.



          (b) Unless otherwise defined herein, terms herein shall have the meanings given to them in the
Credit Agreement.




          (c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Guaranty Agreement shall refer to this Guaranty Agreement as a whole and not to any particular
provision of this Guaranty Agreement, and section and paragraph references are to this Guaranty
Agreement unless otherwise specified.




          (d) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.




     2. Guarantee.



          (a) Subject to the provisions of Section 3, each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to Administrative Agent, for the benefit of
Creditors and their respective successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.




          (b) Each Guarantor further agrees to pay or reimburse Administrative Agent and each of the
Creditors for all their respective reasonable costs and expenses (including, without limitation,
the fees and disbursements of any counsel to Administrative Agent and any of the Creditors) which
may be paid or incurred by any of such Persons in enforcing or preserving any rights under this
Guaranty Agreement, including, without limitation, any rights with respect to, or collecting, any
or all of the Obligations and/or enforcing any rights with respect to, or collecting against, such
Guarantor under this Guaranty Agreement. With respect to each Guarantor, this Guaranty Agreement
shall remain in full force and effect until the earlier to occur of (i) the Release Date, and (ii)
the release of this Guaranty Agreement as to such Guarantor in accordance with Section 2(f)
(the “Guaranty Termination Date”).




          (c) Each Guarantor agrees that the Obligations may at any time and from time to time exceed
the amount of the liability of such Guarantor hereunder without impairing this Guaranty Agreement
or affecting the rights and remedies of Administrative Agent or any Creditor hereunder.







2









 








          (d) No payment or payments made by the Borrower, any of the Guarantors, any other guarantor or
any other Person or received or collected by Administrative Agent or any Creditor from the
Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such
payment or payments, other than payments made by such Guarantor in respect of the Obligations or
payments received or collected from such Guarantor in respect of the Obligations, remain liable for
the Obligations outstanding until the Guaranty Termination Date, subject to Section 3
below.




          (e) Each Guarantor agrees that all payments under this Guaranty Agreement shall be made to
Administrative Agent for the benefit of Creditors. Notwithstanding the preceding sentence if, at
any time any Guarantor shall make any payment to any Creditor on account of its liability
hereunder, it will notify Administrative Agent in writing that such payment is made under this
Guaranty Agreement for such purpose and promptly forward such payment, together with any necessary
endorsement, to Administrative Agent.




          (f) The Guaranty Agreement shall be released as to a specific Guarantor in accordance with the
terms of Section 9.10(b) of the Credit Agreement.




     3. Fraudulent Transfer Limitation. Anything in this Guaranty Agreement to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be limited to a maximum
aggregate amount equal to the largest amount that would not render its obligations hereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the
United States Code or any applicable provisions of comparable Law (collectively, the “Fraudulent
Transfer Laws”), in each case after giving effect to all other liabilities of such Guarantor,
contingent or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Guarantor in respect of intercompany indebtedness to
other Loan Parties or Affiliates of other Loan Parties to the extent that such indebtedness would
be discharged in an amount equal to the amount paid or property conveyed by such Guarantor under
the Loan Documents) and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation or contribution
of such Guarantor pursuant to (a) applicable Law or (b) any agreement providing for an equitable
allocation among such Guarantor and other Loan Parties of obligations arising under the Loan
Documents.



     4. Right of Contribution. The Guarantors desire to allocate among themselves, in a fair and
equitable manner, their obligations arising under this Guaranty Agreement. Accordingly, in the
event any payment or distribution is made by any Guarantor under this Guarantee (a “Funding
Guarantor”) that exceeds its Fair Share (as defined below), that Funding Guarantor shall be
entitled to a contribution from each of the other Guarantors in the amount of such other
Guarantor’s Fair Share Shortfall (as defined below), with the result that all such contributions
will cause each Guarantor’s Aggregate Payments (as defined below) to equal its Fair Share. “Fair
Share” means, with respect to a Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Adjusted Maximum Amount (as defined below) with respect to such Guarantor to
(ii) the aggregate of the Adjusted Maximum Amounts with respect to all Guarantors, multiplied by
(b) the aggregate amount paid or distributed on or before such



3









 




date by all Funding Guarantors under this Guarantee in respect of the obligations guaranteed.
“Fair Share Shortfall” means, with respect to a Guarantor as of any date of determination, the
excess, if any, of the Fair Share of such Guarantor over the Aggregate Payments of such Guarantor.
“Adjusted Maximum Amount” means, with respect to a Guarantor, the maximum aggregate amount of the
obligations of such Guarantor under this Guaranty Agreement, determined in accordance with
Section 3; provided that solely for purposes of calculating the “Adjusted
Maximum Amount” with respect to any Guarantor for purposes of this Section 4, the assets or
liabilities arising by virtue of any rights to or obligations of contribution hereunder shall not
be considered as assets or liabilities of such Guarantor. “Aggregate Payments” means, with respect
to a Guarantor as of any date of determination, the aggregate amount of all payments and
distributions made on or before such date by such Guarantor in respect of this Guaranty Agreement
(including, without limitation, in respect of this Section 4). The amounts payable as
contributions hereunder shall be determined as of the date on which the related payment or
distribution is made by the applicable Funding Guarantor. The allocation among Guarantors of their
obligations as set forth in this Section 4 shall not be construed in any way to limit the
liability of any Guarantor hereunder.




     5. Right of Set-off. In addition to any rights and remedies Administrative Agent and of the
Creditors provided by Law (including, without limitation, other rights of set-off), each Guarantor
hereby irrevocably authorizes Administrative Agent and each Creditor at any time and from time to
time without prior notice to such Guarantor or any other Guarantor, any such notice being expressly
waived by each Guarantor to the extent not prohibited by applicable Law, upon any amount becoming
due and payable by such Guarantor hereunder (whether at the stated maturity of the Obligations, by
acceleration or otherwise) to set off and appropriate and apply against such amount, to the extent
not prohibited by applicable law any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured at
any time held or owing by such Creditor (or any branch or agency thereof) to or for the credit or
the account of Administrative Agent or such Guarantor, whether or not Administrative Agent or such
Creditor has made any demand for payment. Administrative Agent and each Creditor shall notify such
Guarantor (and each Creditor shall notify Administrative Agent) promptly of any such set-off and
the application made by Administrative Agent or such Creditor, provided that, to the extent not
prohibited by applicable law, the failure to give such notice shall not affect the validity of such
set-off and application.



     6. No Subrogation, Contribution, Reimbursement or Indemnity. Notwithstanding anything to the
contrary in this Guaranty Agreement, until the Obligations (other than inchoate Obligations) have
been paid, each Guarantor hereby agrees not to assert any rights which may have arisen in
connection with the guarantees contained in this Guaranty Agreement to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code (or similar action under any
successor law or under any comparable Law), including Section 509 thereof, under any other
Bankruptcy Law, under common law or otherwise) of Administrative Agent and any of the Creditors
against the Borrower or against Administrative Agent and any Creditor for the payment of the
Obligations; provided, however, that each Guarantor shall be entitled to make any
filings or take other actions as such Guarantor may reasonably deem necessary to preserve any
claims it may have against the Borrower. Each Guarantor, until the Obligations (other than
inchoate Obligations) have been paid, hereby agrees not to assert any



4









 




contractual, common law, statutory and other rights of reimbursement, contribution,
exoneration or indemnity (or any similar right) from or against the Borrower or any other Person
which may have arisen in connection with the guarantees contained in this Guaranty Agreement. If
any amount shall be paid by or on behalf of the Borrower to any Guarantor on account of any of the
rights postponed in this Section 6, such amount shall be held by such Guarantor in trust,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor,
be turned over to Administrative Agent in the exact form received by such Guarantor (duly indorsed
by such Guarantor to Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, as provided in the Credit Agreement. The provisions of this
Section 6 shall survive the termination of the guarantees contained in this Guaranty
Agreement.




     7. Amendments, etc. with Respect to the Obligations: Waiver of Rights. Each Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any
of the Obligations made by Administrative Agent or any Creditor may be rescinded by such party and
any of the Obligations continued, and the Obligations, or the liability of any other party upon or
for any part thereof, or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released, and the Credit Agreement, any
other Loan Documents, or any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or part, from time to time, and any
collateral security, guarantee or right of offset at any time existing for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Each Guarantor hereby
knowingly, intentionally and specifically waives any rights it may have at law or in equity to
repudiate or abrogate or otherwise disclaim or limit its obligations hereunder as a result of any
of the foregoing. Neither Administrative Agent nor any Creditor shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by or for it as security for the
Obligations or for this Guaranty Agreement or any property subject thereto, and each Guarantor
hereby knowingly, intentionally and specifically waives any rights it otherwise may have at law or
in equity in the event of any failure by Administrative Agent or any Creditor to so protect,
secure, perfect or insure any such Lien. When making any demand hereunder against any of the
Guarantors, Administrative Agent or any Creditor may, but shall be under no obligation to, make a
similar demand on the Borrower or any other Guarantor or guarantor, and any failure by
Administrative Agent or any Creditor to make any such demand or to collect any payments from the
Borrower or any such other Guarantor or guarantor or any release of the Borrower or such other
Guarantor or guarantor shall not relieve any of the Guarantors in respect of which a demand or
collection is not made or any of the Guarantors not so released of their several obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies, express or implied,
or as a matter of law, of Administrative Agent or any Creditor against any of the Guarantors. For
the purposes hereof, “demand” shall include the commencement and continuance of any legal
proceedings.



     8. Guaranty Agreement Absolute and Unconditional. Each Guarantor waives any and all notice of
the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of
reliance by Administrative Agent or any Creditor upon this Guaranty Agreement or acceptance of this
Guaranty Agreement, and the Obligations, and any of them, shall



5









 




conclusively be deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon this Guaranty Agreement; and all dealings between the Borrower
and any of the Guarantors, on the one hand, and Administrative Agent and the Creditors, on the
other hand, likewise shall be conclusively presumed to have been had or consummated in reliance
upon this Guaranty Agreement. Each Guarantor knowingly, intentionally and specifically waives
diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon
the Borrower or any of the Guarantors with respect to the Obligations. Each Guarantor understands
and agrees that this Guaranty Agreement shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to, and hereby irrevocably waives any defenses it
may now or hereafter have in any way relating to, the following: (a) the validity, regularity or
enforceability of the Credit Agreement, any other Loan Document, any of the Obligations or any
other collateral security therefor or guarantee or right of offset with respect thereto at any time
or from time to time held by or for Administrative Agent or any Creditor, (b) any defense, set-off
or counterclaim (other than a defense of payment or performance) which may at any time be available
to or be asserted by the Borrower against Administrative Agent or any Creditor, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor)
which constitutes, or might be construed to constitute, an equitable or legal discharge of the
Borrower for the Obligations, or of such Guarantor under this Guaranty Agreement, in bankruptcy or
in any other instance, including, without limitation, any diminution in value, for whatever reason,
of any of the collateral security for the Obligations. When pursuing its rights and remedies
hereunder against any Guarantor, Administrative Agent or a Creditor may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the Borrower or any other
Person or against any collateral security or guarantee for the Obligations or any right of offset
with respect thereto (and each Guarantor hereby knowingly, intentionally and specifically waives
any right it may have to require Administrative Agent or a Creditor to do so), and any failure by
Administrative Agent or any Creditor to pursue such other rights or remedies or to collect any
payments from the Borrower or any such other Person or to realize upon any such collateral security
or guarantee or to exercise any such right of offset, or any release of the Borrower or any such
other Person or any such collateral security, guarantee or right of offset, shall not relieve such
Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of Administrative Agent or Creditors
against such Guarantor. This Guaranty Agreement shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon each Guarantor and the successors
and assigns thereof, and shall inure to the benefit of Administrative Agent and Creditors, and
their respective successors, endorsees, transferees and assigns, until the Guaranty Termination
Date.




     9. Reinstatement. This Guaranty Agreement shall continue to be effective, or be reinstated,
as the case may be, if at any time payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by Administrative Agent or any Creditor upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.



6









 





     10. Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to
Administrative Agent without set-off or counterclaim in Dollars and immediately available funds at
the office of Administrative Agent set forth in the Credit Agreement.



     11. Representations and Warranties. Each Guarantor hereby represents and warrants to
Administrative Agent and each Creditor that:



          (a) such Guarantor is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization and has the power and authority and the legal right to own and
operate its property, to lease the property such Guarantor operates and to conduct the business in
which such Guarantor is currently engaged, except to the extent that failure to do so would not
reasonably be expected to have a Material Adverse Effect;




          (b) such Guarantor has the power and authority and the legal right to execute and deliver, and
to perform its obligations under, this Guaranty Agreement, and has taken all necessary action to
authorize the execution, delivery and performance of this Guaranty Agreement;




          (c) this Guaranty Agreement has been duly executed and delivered by such Guarantor and
constitutes the legal, valid and binding obligation of such Guarantor enforceable against such
Guarantor in accordance with its terms, except as enforceability may be limited by applicable
Bankruptcy Laws and general equitable principles (whether considered in a proceeding in equity or
at law);




          (d) the execution, delivery and (subject to Section 2.6 of the Pledge Agreement) performance
of this Guaranty Agreement will not (i) contravene the terms of such Guarantor’s Organization
Documents, (ii) violate any Law, (iii) be in conflict with, result in a breach of, constitute
(alone or with notice or lapse of time or both) a default under or give rise to any right to
accelerate any material obligation under any Contractual Obligation of such Guarantor or (iv) will
not result in, or require, the creation or imposition of any Lien on any of the properties of such
Guarantor, or any revenues, income or profits therefrom, whether now owned or hereafter acquired,
pursuant to any order, injunction, writ or decree of a Governmental Authority or any arbitral award
to which such Guarantor is subject or Contractual Obligation of such Guarantor (other than
Permitted Liens);




          (e) no action, consent or authorization of, registration or filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person (including, without
limitation, any shareholder or any Affiliate of such Guarantor) is required to be obtained or made
by such Guarantor in connection with the execution, delivery, performance, validity or
enforceability of this Guaranty Agreement other than such as have been obtained or made and are in
full force and effect;




          (f) other than disclosed in public filings, if any, or provided to the Administrative Agent
and the Lenders in writing, no material litigation is pending or, to the knowledge of such
Guarantor, threatened by or against such Guarantor or against any of such Guarantor’s properties,
revenues, income or profits therefrom with respect to this Guaranty Agreement or any of the
transactions contemplated hereby;







7









 








          (g) as of the date on which this representation and warranty is made or deemed made, each of
the Guarantors is Solvent, both before and after giving effect to the transactions contemplated by
the Loan Documents consummated on such date and to the incurrence of all Indebtedness and other
obligations incurred on such date in connection with the Loan Documents; and




          (h) each of the other representations and warranties contained in Article V of the
Credit Agreement, insofar as such representations and warranties are applicable to such Guarantor,
is true and correct in all material respects.




     Each Guarantor agrees that the foregoing representations and warranties shall be deemed to
have been made by such Guarantor on the date of each Credit Extension under any Loan Document on
and as of such date of such Credit Extension as though made hereunder on and as of such date.



     All representations and warranties made hereunder shall survive the execution and delivery
hereof. Such representations and warranties have been or will be relied upon by Administrative
Agent and each Creditor, regardless of any investigation made by Administrative Agent or any
Creditor or on their behalf and notwithstanding that Administrative Agent or any Creditor may have
had notice or knowledge of any Default at the time of any credit extension, and shall continue in
full force and survive the Guaranty Termination Date.



     12. Covenants. Each Guarantor hereby covenants and agrees with Administrative Agent and each
Creditor that, from and after the date of this Guaranty Agreement and until the occurrence of the
Guaranty Termination Date, such Guarantor shall not take, and shall refrain from taking, any action
that would result in a breach or violation of any of the covenants of the Borrower contained in the
Credit Agreement.



     13. Authority of Administrative Agent. Each Guarantor acknowledges that the rights and
responsibilities of Administrative Agent under the Guaranty Agreement with respect to any action
taken by Administrative Agent or the exercise or non-exercise by Administrative Agent of any
option, right, request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guaranty Agreement shall, as among Administrative Agent and the other Creditors
be governed by the Credit Agreement and by such other agreements with respect thereto as may exist
form time to time among them, but, as between Administrative Agent and such Guarantor,
Administrative Agent shall be conclusively presumed to be acting as agent for the other Creditors
with full and valid authority so to act or refrain from acting, and no Guarantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.



     14. Notices. All notices and other communications provided for hereunder shall be effectuated
in the manner provided for in the Credit Agreement; provided that if a notice or communication
hereunder is sent to a Guarantor, said notice shall be addressed to such Guarantor, in care of the
Borrower.



     15. Counterparts. This Guaranty Agreement may be executed by one or more of the Guarantors on
any number of separate counterparts (including by facsimile or attachment to electronic
transmission), and all of said counterparts taken together shall be deemed to constitute



8









 




one and the same instrument. A set of the counterparts of this Guaranty Agreement signed by
all the Guarantors shall be lodged with Administrative Agent.




     16. Severability. Any provision of the Guaranty Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.



     17. Integration. This Guaranty Agreement and the other Loan Documents represent the agreement
of each Guarantor with respect to the subject matter hereof and there are no promises or
representations by Administrative Agent or any Creditor relative to the subject matter hereof not
reflected herein.



     18. Amendments in Writing; No Waiver; Cumulative Remedies.



          (a) None of the terms or provisions of this Guaranty Agreement may be waived, amended,
supplemented or otherwise modified except in accordance with the provisions of the Credit
Agreement.




          (b) Neither Administrative Agent nor any Creditor shall by any act (except by a written
instrument pursuant to this Section 18), delay, indulgence, omission or otherwise be deemed
to have waived any right or remedy hereunder or to have acquiesced in any default or in any breach
of any of the terms and conditions hereof. No failure to exercise, nor delay in exercising, on the
part of Administrative Agent or any Creditor, any right, power of privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any other right, power of
privilege. A waiver by Administrative Agent or any Creditor of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which Administrative Agent
or such Creditor would otherwise have on any future occasion.




          (c) The rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by Law.




     19. Section Headings. The section headings used in this Guaranty Agreement are for
convenience of reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.



     20. Successors and Assigns. This Guaranty Agreement shall be binding upon the successors and
assigns of each Guarantor and shall inure to the benefit of Administrative Agent and Creditors and
their respective successors and assigns; provided, that no Guarantor may assign any of its
rights or obligations under this Guaranty Agreement without the prior written consent of
Administrative Agent and any such purported assignment shall be null and void.



     21. GOVERNING LAW; WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND SERVICE OF PROCESS.



9









 





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




          (b) EACH GUARANTOR, ADMINISTRATIVE AGENT AND EACH CREDITOR IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF TEXAS SITTING IN DALLAS COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT
OF TEXAS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH
GUARANTOR, ADMINISTRATIVE AGENT AND EACH CREDITOR IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE
COURT OR, TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH
GUARANTOR, ADMINISTRATIVE AGENT AND EACH CREDITOR, 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 GUARANTY AGREEMENT SHALL AFFECT
ANY RIGHT THAT ADMINISTRATIVE AGENT OR ANY CREDITOR MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS GUARANTY AGREEMENT AGAINST ANY GUARANTOR OR ITS PROPERTIES IN THE
COURTS OF OR ANY JURISDICTION.




          (c) EACH GUARANTOR, ADMINISTRATIVE AGENT AND EACH CREDITOR, IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT IN ANY COURT REFERRED TO IN SECTION 21(b). EACH GUARANTOR, ADMINISTRATIVE
AGENT AND EACH CREDITOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT NOT PROHIBITED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT. THIS SECTION 21 SHALL SURVIVE THE TERMINATION OF THIS
GUARANTY AGREEMENT, AND ANY SATISFACTION AND DISCHARGE OF EACH GUARANTOR BY VIRTUE OF ANY PAYMENT,
COURT ORDER, OR LAW.




     22. Waiver of Right to Trial by Jury. EACH GUARANTOR, ADMINISTRATIVE AGENT AND EACH CREDITOR
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING UNDER THIS GUARANTY AGREEMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW
EXISTING OR



10









 




HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH GUARANTOR,
ADMINISTRATIVE AGENT AND EACH CREDITOR HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
THIS SECTION 22 SHALL SURVIVE THE TERMINATION OF THIS GUARANTY AGREEMENT, AND ANY
SATISFACTION AND DISCHARGE OF EACH GUARANTOR BY VIRTUE OF ANY PAYMENT, COURT ORDER, OR LAW.




     23. Additional Guarantors. Any Person who was not a “Guarantor” under this Guaranty Agreement
at the time of initial execution hereof shall become a “Guarantor” hereunder if required pursuant
to the terms of the Loan Documents by executing and delivering to Administrative Agent a Joinder.
Such Person shall also deliver such items to Administrative Agent in connection with the execution
of such Joinder as required by the terms of the Loan Documents and this Guaranty Agreement. Any
such Person shall thereafter be deemed a “Guarantor” for all purposes under this Guaranty
Agreement.



     24. Loan Document. This Guaranty Agreement is a Loan Document.



     25. Amendment and Restatement. This Guaranty Agreement is an amendment and restatement of,
but not a release or novation of, the Existing Guaranty. Each Guarantor ratifies and confirms its
obligations pursuant to the Existing Guaranty, as amended and restated by this Guaranty Agreement.



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



The Remainder of This Page Is Intentionally Left Blank.











11









 








          IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty Agreement to be duly
executed and delivered by its duly authorized officer as of the day and year first written above.




	 	 	 	 	 
	 	SAI HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	PENSON HOLDINGS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Amended and Restated Guaranty — Signature Page




 









 








Exhibit A




Guaranty Joinder





     THIS GUARANTY JOINDER dated _______________, to the Amended and Restated Guaranty dated as of
May 6, 2010 (such agreement, together with all amendments and restatements, the “Guaranty
Agreement”), is made by the parties thereto (collectively, the “Guarantors”) in favor of Regions
Bank, as Administrative Agent (in such capacity, the “Administrative Agent”).



BACKGROUND.




     Capitalized terms not otherwise defined herein have the meaning specified in the Guaranty
Agreement. The Guaranty Agreement provides that additional parties may become Guarantors under the
Guaranty Agreement by execution and delivery of this form of Joinder. Pursuant to the provisions
of Section 23 of the Guaranty Agreement, the undersigned is becoming a Guarantor under the
Guaranty Agreement. The undersigned desires to become a Guarantor under the Guaranty Agreement in
order to induce Creditors to continue to make and maintain financial accommodations under the Loan
Documents.



AGREEMENT.




     NOW, THEREFORE, in consideration of the premises set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order
to induce Creditors to continue to make and maintain financial accommodations under the Loan
Documents, the undersigned hereby agrees with Administrative Agent, for the benefit of Creditors,
as follows:



     1. Joinder. In accordance with the Guaranty Agreement, the undersigned hereby becomes a
Guarantor under the Guaranty Agreement with the same force and effect as if it were an original
signatory thereto as a Guarantor and the undersigned hereby (a) agrees to all the terms and
provisions of the Guaranty Agreement applicable to it as a Guarantor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Guarantor thereunder are true
and correct on and as of the date hereof. Each reference to a “Guarantor” in the Guaranty
Agreement shall be deemed to include the undersigned.



     2. Representations and Warranties. The undersigned hereby makes each representation and
warranty set forth in Section 11 of the Guaranty Agreement to the same extent as each other
Guarantor.



     3. Notices. All communications and notices hereunder shall be in writing and given as
provided in the Guaranty Agreement.



     4. Governing Law. THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE; PROVIDED, THAT ADMINISTRATIVE AGENT AND EACH CREDITOR SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.



 









 





     5. Full Force of Guaranty Agreement. Except as expressly supplemented hereby, the Guaranty
Agreement remains in full force and effect in accordance with its terms.



     6. Counterparts. This Joinder may be executed in any number of counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.



The Remainder of This Page Is Intentionally Left Blank.











2









 







IN WITNESS WHEREOF, the undersigned has caused this Joinder to be duly executed and delivered by
its officer thereunto duly authorized as of the date first above written.




	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	Print Name:  	 	 
	 	 	Print Title:  	
 	 
	 



Joinder Agreement (Guaranty Agreement) — Signature Page





 









 








	 	 	 	 	 
	ACCEPTED BY:



REGIONS BANK, as Administrative Agent

 	 	 
	By:  	 	 	 
	 	Print Name:  	 	 	 
	 	Print
Title:  	

 	 	 
	 



Joinder Agreement (Guaranty Agreement) — Signature Page






 











 





SCHEDULE 2.01





COMMITMENTS

AND PRO RATA PERCENTAGES



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Pro Rata
	Lender	 	Commitment	 	Percentage
	 
	 
	Regions Bank
	 	$	*	***	 	 	*	***%
	Compass Bank, as successor in interest to Guaranty Bank
	 	$	*	***	 	 	*	***%
	Capital One, N.A.
	 	$	*	***	 	 	*	***%
	Texas Capital Bank, National Association
	 	$	*	***	 	 	*	***%
	The PrivateBank and Trust Company
	 	$	*	***	 	 	*	***%
	Union Bank, N.A.
	 	$	*	***	 	 	*	***%
	 
	Total
	 	$	*	***	 	 	*	***%






Schedule 2.01 of Amended and Restated Credit Agreement



 









 





SCHEDULE 5.05




EXISTING INDEBTEDNESS



****




Schedule 5.05 of Amended and Restated Credit Agreement



 









 





SCHEDULE 5.13




SUBSIDIARIES AND

OTHER EQUITY INVESTMENTS



Part (a). Subsidiaries.



Percentages shown reflect percentage ownership Equity Interests held by named entity:



SAI Holdings, Inc. (100% ownership by Penson Worldwide, Inc.)



Penson Financial Services, Inc. (100% ownership by SAI Holdings, Inc.)



Nexa Technologies, Inc. (100% ownership by SAI Holdings, Inc.)



Penson Holdings, Inc. (100% ownership by SAI Holdings, Inc.)



Penson Financial Futures, Inc. (100% ownership by SAI Holdings, Inc.)



Penson Execution Services, Inc. (100% ownership by SAI Holdings, Inc.)



Penson Financial Services Limited (100% ownership by Penson Holdings, Inc.)



Worldwide Nominees Ltd. (100% ownership by Penson Financial Services Limited)



Penson Financial Services Canada Inc. (100% ownership by Penson Holdings, Inc.)



Penson Financial Services Ventures Inc. (100% ownership by Penson Holdings, Inc.)



Penson Asia Limited (100% ownership by Penson Holdings, Inc.)



Penson Financial Services Asia Limited (100% ownership by Penson Asia Limited)



Market Essentials Group Inc. (100% ownership by Penson Financial Services Ventures Inc.)



Turnpike Trading Systems Inc. (51% ownership by Penson Financial Services Ventures Inc.)



GHP1, Inc. (100% ownership by SAI Holdings, Inc.)



GHP2, LLC (100% ownership by GHP1, Inc.)



Penson GHCO (99.4% ownership by GHP1, Inc. and 0.6% ownership by GHP2, LLC)



First Capital Group, LLC (100% ownership by GHP1, Inc.)



Penson Financial Services Australia Pty Ltd (100% ownership by Penson Holdings, Inc.)




Schedule 5.13 of Amended and Restated Credit Agreement



 









 




Penson Australia Nominees Pty Ltd (100% ownership by Penson Financial Services Australia Pty
Ltd.)



Part (b). Equity Investments.



None.




Schedule 5.13 of Amended and Restated Credit Agreement



 









 





SCHEDULE 5.20




COMMON ENTERPRISE



The business of the Borrower and its Subsidiaries includes the provisions of a broad range of
securities processing products and services to the global securities and investment industry.
Borrower and its Subsidiaries provide product and service offerings that include securities and
futures clearing, foreign currency products, derivatives, margin lending, stock lending,
alternative trading systems, facilities management, prime brokerage, conduit and non-conduit loans,
data, technology products and services and other related offerings.




Schedule 5.20 of Amended and Restated Credit Agreement



 









 





SCHEDULE 7.01




EXISTING LIENS



****




Schedule 7.01 of Amended and Restated Credit Agreement



 









 





SCHEDULE 7.02




EXISTING INVESTMENTS



****




Schedule 7.02 of Amended and Restated Credit Agreement



 









 





SCHEDULE 10.02




ADMINISTRATIVE AGENT’S OFFICE;

CERTAIN ADDRESSES FOR NOTICES




BORROWER:




Penson Worldwide, Inc.

1700 Pacific Avenue, Suite 1400

Dallas, Texas 75201

Attention: Chairman

Telephone: 512-794-9100

Telecopier: (512) 231-8526

Electronic Mail: rengemoen@penson.com

Website Address: www.penson.com

U.S. Taxpayer Identification Number: 75-2896356




With copy to:




Penson Worldwide, Inc.

1700 Pacific Avenue, Suite 1400

Dallas, Texas 75201

Attention: General Counsel

Telephone: (415) 409-1531

Telecopier: (214) 953-3503

Electronic Mail: akoslow@penson.com




ADMINISTRATIVE AGENT:




Administrative Agent’s Office

(for payments and Requests for Credit Extensions):




Regions Bank

100 Congress Avenue, Suite 1700

Austin, Texas 78701

Attention: Robin Ingari

Telephone: (512) 372-2303

Telecopier: (512) 226-0241

Electronic Mail: robin.ingari@regions.com




With copy to:




Regions Capital Markets

3050 Peachtree Road, Suite 400

Atlanta, GA 30305

Attention: Sara Horehled




Schedule 10.02 of Amended and Restated Credit Agreement



 









 





Telephone: 404.279.7480

Telecopier: 404.995.7665

Electronic Mail: sara.horehled@regions.com

Account No.: 001102450408511

Ref: Penson Worldwide, Inc.

ABA# 062005690




LETTER OF CREDIT ISSUER:




Regions Bank

100 Congress Avenue, Suite 1700

Austin, Texas 78701

Attention: Robin Ingari

Telephone: (512) 372-2303

Telecopier: (512) 226-0241

Electronic Mail: robin.ingari@regions.com




SWING LINE LENDER:




Regions Bank

100 Congress Avenue, Suite 1700

Austin, Texas 78701

Attention: Robin Ingari

Telephone: (512) 372-2303

Telecopier: (512) 226-0241

Electronic Mail: robin.ingari@regions.com




With copy to:




Regions Capital Markets

3050 Peachtree Road, Suite 400

Atlanta, GA 30305

Attention: Sara Horehled

Telephone: 404.279.7480

Telecopier: 404.995.7665

Electronic Mail: sara.horehled@regions.com

Account No.: 001102450408511

Ref: Penson Worldwide, Inc.

ABA# 062005690




Schedule 10.02 of Amended and Restated Credit Agreement