Prepared by MERRILL CORPORATION




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AMENDED AND RESTATED CREDIT AGREEMENT  


Dated as of October 12, 2001 


among



LONGS DRUG STORES CALIFORNIA, INC.,
  as the Borrower, 


BANK OF AMERICA, N.A.,

as Administrative Agent and Swing Line Lender, 


FLEET NATIONAL BANK,
  as Syndication Agent and L/C Issuer, 


and



The
Other Lenders Party Hereto 


BANC OF AMERICA SECURITIES LLC,
  as

Sole Lead Arranger and Sole Book Manager 






  



 
 

TABLE OF CONTENTS    
  



	Section
	 	 
	 	Page

	ARTICLE I.	 	DEFINITIONS AND ACCOUNTING TERMS	 	1
	 	1.01	 	Defined Terms	 	1
	 	1.02	 	Other Interpretive Provisions	 	13
	 	1.03	 	Accounting Terms	 	13
	 	1.04	 	Rounding	 	14
	 	1.05	 	References to Agreements and Laws	 	14
	ARTICLE II.	 	THE COMMITMENTS AND CREDIT EXTENSIONS	 	14
	 	2.01	 	Committed Loans	 	14
	 	2.02	 	Borrowings, Conversions and Continuations of Committed Loans	 	14
	 	2.03	 	Letters of Credit	 	15
	 	2.04	 	Swing Line Loans	 	20
	 	2.05	 	Prepayments	 	22
	 	2.06	 	Reduction or Termination of Commitments	 	23
	 	2.07	 	Repayment of Loans	 	23
	 	2.08	 	Interest	 	23
	 	2.09	 	Fees	 	23
	 	2.10	 	Computation of Interest and Fees	 	24
	 	2.11	 	Evidence of Debt	 	24
	 	2.12	 	Payments Generally	 	24
	 	2.13	 	Sharing of Payments	 	26
	 	2.14	 	Increase in Commitments	 	27
	ARTICLE III.	 	TAXES, YIELD PROTECTION AND ILLEGALITY	 	27
	 	3.01	 	Taxes	 	27
	 	3.02	 	Illegality	 	28
	 	3.03	 	Inability to Determine Rates	 	29
	 	3.04	 	Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans	 	29
	 	3.05	 	Funding Losses	 	30
	 	3.06	 	Matters Applicable to all Requests for Compensation	 	30
	 	3.07	 	Survival	 	30
	ARTICLE IV.	 	CONDITIONS PRECEDENT TO CREDIT EXTENSIONS	 	31
	 	4.01	 	Conditions of Initial Credit Extension	 	31
	 	4.02	 	Conditions to all Credit Extensions and Conversions and Continuations	 	32



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	ARTICLE V.	 	REPRESENTATIONS AND WARRANTIES	 	32
	 	5.01	 	Existence, Qualification and Power; Compliance with Laws	 	32
	 	5.02	 	Authorization; No Contravention	 	32
	 	5.03	 	Governmental Authorization	 	33
	 	5.04	 	Binding Effect	 	33
	 	5.05	 	Financial Statements; No Material Adverse Effect	 	33
	 	5.06	 	Litigation	 	33
	 	5.07	 	No Default	 	33
	 	5.08	 	Ownership of Property; Liens	 	33
	 	5.09	 	Environmental Compliance	 	33
	 	5.10	 	Insurance	 	34
	 	5.11	 	Taxes	 	34
	 	5.12	 	ERISA Compliance	 	34
	 	5.13	 	Subsidiaries	 	34
	 	5.14	 	Margin Regulations; Investment Company Act; Public Utility Holding Company Act	 	34
	 	5.15	 	Disclosure	 	35
	ARTICLE VI.	 	AFFIRMATIVE COVENANTS	 	35
	 	6.01	 	Financial Statements	 	35
	 	6.02	 	Certificates; Other Information	 	36
	 	6.03	 	Notices	 	36
	 	6.04	 	Payment of Obligations	 	37
	 	6.05	 	Preservation of Existence, Etc	 	37
	 	6.06	 	Maintenance of Properties	 	37
	 	6.07	 	Maintenance of Insurance	 	37
	 	6.08	 	Compliance with Laws	 	37
	 	6.09	 	Books and Records	 	37
	 	6.10	 	Inspection Rights	 	38
	 	6.11	 	Compliance with ERISA	 	38
	 	6.12	 	Use of Proceeds	 	38
	 	6.13	 	Guarantors	 	38
	ARTICLE VII.	 	NEGATIVE COVENANTS	 	38
	 	7.01	 	Liens and Negative Pledges	 	38
	 	7.02	 	Indebtedness	 	39
	 	7.03	 	Fundamental Changes	 	40
	 	7.04	 	Dispositions	 	40
	 	7.05	 	Restricted Payments	 	41
	 	7.06	 	ERISA	 	41
	 	7.07	 	Change in Nature of Business	 	41
	 	7.08	 	Transactions with Affiliates	 	41
	 	7.09	 	Burdensome Agreements	 	41
	 	7.10	 	Use of Proceeds	 	41
	 	7.11	 	Hostile Acquisitions	 	41
	 	7.12	 	Limitations on Upstreaming	 	42
	 	7.13	 	Acquisitions	 	42
	 	7.14	 	Financial Covenants	 	42
	ARTICLE VIII.	 	EVENTS OF DEFAULT AND REMEDIES	 	42
	 	8.01	 	Events of Default	 	42
	 	8.02	 	Remedies Upon Event of Default	 	44



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	ARTICLE IX.	 	ADMINISTRATIVE AGENT	 	44
	 	9.01	 	Appointment and Authorization of Administrative Agent	 	44
	 	9.02	 	Delegation of Duties	 	45
	 	9.03	 	Liability of Administrative Agent	 	45
	 	9.04	 	Reliance by Administrative Agent	 	45
	 	9.05	 	Notice of Default	 	46
	 	9.06	 	Credit Decision; Disclosure of Information by Administrative Agent	 	46
	 	9.07	 	Indemnification of Administrative Agent	 	47
	 	9.08	 	Administrative Agent in its Individual Capacity	 	47
	 	9.09	 	Successor Administrative Agent	 	47
	 	9.10	 	Other Agents	 	48
	ARTICLE X.	 	MISCELLANEOUS	 	48
	 	10.01	 	Amendments, Etc.	 	48
	 	10.02	 	Notices and Other Communications; Facsimile Copies	 	49
	 	10.03	 	No Waiver; Cumulative Remedies	 	50
	 	10.04	 	Attorney Costs, Expenses and Taxes	 	50
	 	10.05	 	Indemnification by the Borrower	 	50
	 	10.06	 	Payments Set Aside	 	51
	 	10.07	 	Successors and Assigns	 	51
	 	10.08	 	Confidentiality	 	53
	 	10.09	 	Set-off	 	54
	 	10.10	 	Interest Rate Limitation	 	55
	 	10.11	 	Counterparts; Facsimile Signatures; Effectiveness	 	55
	 	10.12	 	Integration	 	55
	 	10.13	 	Survival of Representations and Warranties	 	55
	 	10.14	 	Severability	 	55
	 	10.15	 	Tax Forms	 	56
	 	10.16	 	Removal and Replacement of Lenders	 	56
	 	10.17	 	Governing Law	 	57
	 	10.18	 	Waiver of Right to Trial by Jury	 	57
	
SCHEDULES	
 	

 
	 	

2.01	
 	

Commitments and Pro Rata Shares	
 	

 
	 	5.13	 	Subsidiaries and Other Equity Investments	 	 
	 	7.01	 	Existing Liens	 	 
	 	7.02	 	Existing Indebtedness	 	 
	 	10.02	 	Eurodollar and Domestic Lending Offices, Addresses for Notices	 	 
	
EXHIBITS	
 	

 
	

 	
 	
Form of	
 	

 
	 	

A	
 	

Committed Loan Notice	
 	

 
	 	B	 	Swing Line Loan Notice	 	 
	 	C-1	 	Committed Loan Note	 	 
	 	C-2	 	Swing Line Note	 	 
	 	D	 	Compliance Certificate	 	 
	 	E	 	Assignment and Assumption	 	 
	 	F	 	Guaranty	 	 




iii







  




    This
AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement"), dated as of October 12, 2001, is among LONGS DRUG STORES
CALIFORNIA, INC., a California Corporation (the "Borrower"), each lender from time to time party hereto (collectively, the
"Lenders" and individually, a "Lender"), BANK OF AMERICA,
N.A., as Administrative Agent and Swing Line Lender, and FLEET NATIONAL BANK, as Syndication Agent and L/C Issuer. 


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


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


 
 

ARTICLE I.
  DEFINITIONS AND ACCOUNTING TERMS    
  


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


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


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


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



    "Agent-Related Persons" means the Administrative Agent (including any successor administrative agent), together with its Affiliates
(including, in the case of Bank of America in its capacity as the Administrative Agent, the Arranger), and the officers, directors, employees, agents and attorneys-in-fact of
such Persons and Affiliates. 


    "Aggregate Commitments" has the meaning set forth in the definition of "Commitment." 


    "Agreement" means this Amended and Restated Credit Agreement. 


    "Applicable Rate" means the following percentages per annum, based upon the Consolidated Adjusted Total Debt to Consolidated EBITDAR
Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b): 


 
 

Applicable Rate    
  



	Pricing

Level
 
	 	Consolidated

Adjusted Total Debt

to Consolidated

EBITDAR Ratio
	 	Commitment

Fee
	 	Eurodollar

Rate
	 	Base Rate
	 
	1	 	> 3.00:1	 	0.350	%	1.500	%	0.250	%
	2	 	> 2.50:1 but < 3.00:1	 	0.300	%	1.250	%	0.000	%
	3	 	> 2.00:1 but < 2.50:1	 	0.250	%	1.000	%	0.000	%
	4	 	> 1.50 but < 2.00	 	0.225	%	0.875	%	0.000	%
	5	 	< 1.50:1	 	0.200	%	0.750	%	0.000	%





1





 

    The
Applicable Rate shall be in effect from the date the most recent Compliance Certificate is received by Administrative Agent to but excluding the date the next Compliance
Certificate is received; provided that if the Borrower fails to timely deliver the next Compliance Certificate, the Applicable Rate from
the date such Compliance Certificate was due to but excluding the date such Compliance Certificate is received by Administrative Agent shall be pricing level 1 set forth above, and, thereafter, the
pricing level indicated by such Compliance Certificate when received; and provided further that the Applicable Rate in
effect from the Closing Date to the date the Administrative Agent receives the
Compliance Certificate for the period ending January 31, 2002, shall be determined based upon pricing level 2. 


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


    "Assignment and Assumption" means an Assignment and Assumption substantially in the form of  Exhibit E. 



    "Attorney Costs" means and includes all fees and disbursements of any law firm or other external counsel and the allocated cost of
internal legal services and all disbursements of internal counsel. 


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


    "Audited Financial Statements" means the audited consolidated balance sheet of the Borrower and its Subsidiaries for the fiscal year
ended January 25, 2001, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year of the Borrower and its Subsidiaries. 


    "Bank of America" means Bank of America, N.A. 


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


    "Base Rate Committed Loan" means a Committed Loan that is a Base Rate Loan. 


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


    "Borrower" has the meaning set forth in the introductory paragraph hereto. 


    "Borrowing" means a Committed Borrowing or a Swing Line Borrowing, as the context may require. 


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


2





 


    "Cash Collateralize" means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the
Lenders, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuer (which
documents are hereby consented to by the Lenders). Derivatives of such term shall have corresponding meaning. The Borrower hereby grants the Administrative Agent, for the benefit of the L/C Issuer and
the Lenders, a Lien on all such cash and deposit account balances. Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America or other
institutions satisfactory to the L/C Issuer. 


    "Change of Control" means that (a) any Person or two or more Persons acting in concert (other than (i) R.M. Long or the
descendants of V.M. Long or R.M. Long, (ii) any trustee, personal representative, attorney-in-fact, proxyholder or other representative or agent acting for the
descendants of either, (iii) the Thomas J. Long Foundation, (iv) the J.M. Long Foundation, and (v) any deferred compensation plan or other employee benefit plan established by the
Borrower or the Parent, including, without limitation, the Borrower's existing Employee Profit Sharing Plan and the Borrower's existing 401(k) plan) shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 50% or more of the outstanding shares of voting stock of Parent,
(b) the Borrower shall cease to be a wholly-owned Subsidiary of Parent, or (c) the consolidated total assets of the Borrower and its Subsidiaries shall constitute less than 95% of the
consolidated total assets of the Parent and its Subsidiaries. 


    "Closing Date" means the first date all the conditions precedent
in Section 4.01 are satisfied or waived in accordance
with Section 4.01 (or, in the case
of Section 4.01(b), waived by the Person entitled to receive the applicable payment). 


    "Code" means the Internal Revenue Code of 1986. 


    "Commitment" means, as to each Lender, its obligation to (a) make Committed Loans to the Borrower pursuant
to Section 2.01, (b) purchase participations in L/C Obligations, and (c) purchase participations in
Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule 2.01, as such amount may be reduced or adjusted from time to time in accordance with this Agreement
(collectively, the "Aggregate Commitments"). 


    "Committed Borrowing" means a borrowing consisting of simultaneous Committed Loans of the same Type and having the same Interest Period
made by each of the Lenders pursuant to Section 2.01. 


    "Committed Loan" has the meaning specified in Section 2.01. 



    "Committed Loan Note" means a promissory note made by the Borrower in favor of a Lender evidencing Committed Loans made by such Lender,
substantially in the form of Exhibit C-1. 


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


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


    "Consolidated Adjusted Total Capitalization" means, as of any date of determination, for the Parent and its Subsidiaries on a
consolidated basis, the sum of (a) Consolidated Funded Indebtedness, (b) Consolidated Shareholders' Equity, and (c) an amount equal to (i) Consolidated Rental Expense for
the most recent four fiscal quarter period ending on or before such date multiplied by (ii) six. 



    "Consolidated Adjusted Total Debt" means, as of any date of determination, for the Parent and its Subsidiaries on a consolidated basis,
the sum of (a) Consolidated Funded Indebtedness and (b) an 


3





 


amount equal to (i) Consolidated Rent Expense for the most recent four fiscal quarter period ending on or before such date multiplied by (ii) six. 



    "Consolidated Adjusted Total Debt to Consolidated Adjusted Total Capitalization Ratio" means, as of any date of determination, the
ratio of (a) Consolidated Adjusted Total Debt to (b) Consolidated Adjusted Total Capitalization. 


    "Consolidated Adjusted Total Debt to Consolidated EBITDAR Ratio" means, for any four fiscal quarter period, the ratio of
(a) Consolidated Adjusted Total Debt as at the end of such period to (b) Consolidated EBITDAR for such period. 


    "Consolidated EBITDAR" means, for any period, for the Parent and its Subsidiaries on a consolidated basis, an amount equal to
Consolidated Net Income, plus or minus (as indicated) the following, without duplication, to the extent used or included in the determination of such Consolidated Net Income: (a) plus
Consolidated Interest Charges, plus (b) Consolidated Rent Expense, plus (c) the amount of taxes, based on or measured by income, plus (d) the amount of depreciation and
amortization expense, plus (e) non-cash, non-recurring charges, minus (f) non-recurring gains, minus (g) undistributed earnings from joint
ventures, minus (h) any benefit in connection with the reserve established for the Parent's "2001 Closure Plan" as described in the Parent's SEC Form 10-Q for the quarterly
period ended July 26, 2001, and plus (i) any charge in connection with such 2001 Closure Plan reserve to the extent that (x) the aggregate amount of all reserves established in
connection with such 2001 Closure Plan shall not exceed $32,000,000 and (y) such charge is made during any fiscal quarter ending during or after January 2001 and during or before
January 2002. 


    "Consolidated Funded Indebtedness" means, as of any date of determination, for the Parent and its Subsidiaries on a consolidated basis,
the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including the outstanding principal amount of Obligations
hereunder) and the outstanding principal amount of all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) Attributable Indebtedness in respect
of capital leases and Synthetic Lease Obligations, and (c) without duplication, all Guaranty Obligations with respect to Indebtedness of the types specified in subsections (a) and
(b) above of Persons other than the Parent or any Subsidiary. 


    "Consolidated Interest Charges" means, for any period, for the Parent and its Subsidiaries on a consolidated basis, the sum of
(a) all interest, premium payments, fees, charges and related expenses of the Parent and its Subsidiaries 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 Parent and its Subsidiaries with
respect to such period under capital leases that is treated as interest in accordance with GAAP. 


    "Consolidated Net Income" means, for any period, for the Parent and its Subsidiaries on a consolidated basis, the net income of the
Parent and its Subsidiaries in accordance with GAAP. 


    "Consolidated Rent Expense" means, for any period, for the Parent and its Subsidiaries on a consolidated basis, all rental expense in
respect of operating leases deducted in determining Consolidated Net Income for such period. 


    "Consolidated Shareholders' Equity" means, as of any date of determination for the Parent and its Subsidiaries on a consolidated basis,
shareholders' equity as of that date determined in accordance with GAAP. 


    "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. 


4





 


    "Credit Extension" means each of the following: (a) a Committed Borrowing, (b) a borrowing of a Swing Line Loan, and
(c) an L/C Credit Extension. 


    "Debtor Relief Laws" means the Bankruptcy Code of the United States of America, 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 of America or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors generally. 


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


    "Default Rate" means an interest rate equal to (a) the Base
Rate plus (b) the Applicable Rate, if any, applicable to Base Rate
Loans plus (c) 2% per
annum; provided that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the
interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws. 


    "Disposition" or "Dispose" means the sale, transfer, license 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. 



    "Dollar" and "$" means lawful money of the United States of America. 


    "Eligible Assignee" has the meaning specified
in Section 10.07(g). 


    "Environmental Laws" means all Laws relating to environmental, health, safety and land use matters applicable to any property of the
Borrower or its Subsidiaries. 


    "ERISA" means the Employee Retirement Income Security Act of 1974 and any regulations issued pursuant thereto. 



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


    "ERISA Event" means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected to constitute 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 PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate. 


5





 


    "Eurodollar Rate" means for any Interest Period with respect to any Eurodollar Rate Loan: 



    (a) the
rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on page 3750 of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association LIBOR Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or 


    (b) if
the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate
per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement
Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period, or 


    (c) if
the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the
rate of interest at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the London interbank eurodollar market at their
request at approximately 4:00 p.m. (London time) two Business Days prior to the first day of such Interest Period. 




    "Eurodollar Rate Committed Loan" means a Committed Loan that bears interest at a rate based on the Eurodollar Rate. 


    "Eurodollar Rate Loan" means a Eurodollar Rate Committed Loan. 


    "Event of Default" means any of the events or circumstances specified in  Article VIII. 


    "Existing Credit Agreement" means that certain Credit Agreement, dated as of October 14, 1999, among the Borrower, each lender
from time to time party thereto, and Bank of America, N.A., as administrative agent. 


    "Existing Letters of Credit" means the letters of credit outstanding under the Existing Credit Agreement on the Closing Date. 


    "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 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 charged to Bank of America on such day on such transactions as determined by the Administrative Agent. 


    "Fee Letter" has the meaning set forth in Section 2.09(b). 


    "Fixed Charge Coverage Ratio" means for any four fiscal quarter period the ratio of (a) Consolidated EBITDAR to (b) the
sum, without duplication, of Consolidated Interest Charges plus Consolidated Rental Expense. 


    "Foreign Lender" has the meaning specified in Section 10.15(a). 


6





 


    "FRB" means the Board of Governors of the Federal Reserve System of the United States of America. 



    "Fund" has the meaning set forth in Section 10.07(g). 


    "GAAP" means generally accepted accounting principles 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, that are applicable to the circumstances as of the date of determination, consistently applied. 



    "Governmental Authority" means any nation or government, any state or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of
or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing. 


    "Guarantor" means any Person now or hereafter obligated as a guarantor under the Guaranty. 



    "Guaranty" means the Guaranty in the form of Exhibit F with such changes as the
Administrative Agent may approve. 


    "Guaranty Obligation" means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guarantying or
having the economic effect of guarantying 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 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; provided that the term "Guaranty
Obligation" shall not include endorsement of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guarantying Person in good faith. 


    "Indebtedness" means, as to any Person at a particular time, 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; 



7







  



    (c) net
obligations under any Swap Contract in an amount equal to the Swap Termination Value thereof; 


    (d) all
obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business); 


    (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; and 


    (g) all
Guaranty Obligations 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 (subject only to customary
exceptions acceptable to the Administrative Agent). 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. 


    "Indemnified Liabilities" has the meaning set forth in Section 10.05. 


    "Indemnitees" has the meaning set forth in Section 10.05. 



    "Information" has the meaning set forth in Section 10.08. 


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



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



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



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


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




    "Investment" means, as to any Person, any 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, guaranty 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, or (c) the purchase or other acquisition (in one transaction or
a series of transactions) of assets of another Person that constitute a business unit. For purposes of 


8





 


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. 



    "IRS" means the United States Internal Revenue Service. 


    "Laws" means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law. 


    "L/C Advance" means, with respect to each Lender, such Lender's participation in any L/C Borrowing in accordance with its Pro Rata
Share. 


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


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


    "L/C Issuer" means Fleet National Bank, in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of
Credit hereunder. 


    "L/C Obligations" means, as at any date of determination, the aggregate undrawn face amount of all outstanding Letters of Credit  plus the aggregate of all Unreimbursed
Amounts, including all L/C Borrowings. 


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


    "Lending Office" means, as to any Lender, the office or offices of such Lender described as such on  Schedule 10.02, or such other office or offices as a Lender may
from time to time notify the Borrower and the Administrative Agent. 


    "Letter of Credit" means any letter of credit issued hereunder. 


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


    "Letter of Credit Sublimit" means an amount equal to the lesser of the Aggregate Commitments and $20,000,000. The Letter of Credit
Sublimit is part of, and not in addition to, the Aggregate Commitments. 


    "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable Laws of any jurisdiction), including
the interest of a purchaser of accounts receivable. 


    "Loan" means an advance of funds by a Lender to the Borrower under Article II in
the form of a Committed Loan or a Swing Line Loan. 


    "Loan Documents" means this Agreement, each Note, the Fee Letter, each Request for Credit Extension, each Compliance Certificate and
the Guaranty. 


    "Loan Parties" means, collectively, the Borrower and each Guarantor. 


9





 


    "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or financial prospects of the Borrower or 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 Subsidiary" means at any time any Subsidiary which accounts for more than (i) 5% of the consolidated assets of
Borrower and its Subsidiaries or (ii) 5% of consolidated revenue of Borrower and its Subsidiaries. 


    "Maturity Date" means (a) October 12, 2004, or (b) such earlier date upon which the Aggregate Commitments may be
terminated in accordance with the terms hereof. 


    "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 three calendar years, has made or been obligated to make contributions. 


    "Negative Pledge" means a Contractual Obligation that restricts Liens on property. 


    "Notes" means, collectively, the Committed Loan Notes and the Swing Line Note. 



    "Obligations" means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any
Loan Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest that accrues
after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding. 


    "Other Taxes" has the meaning set forth in Section 3.01(b). 



    "Organization Documents" means, (a) with respect to any corporation, the certificate or articles of incorporation and the
bylaws; (b) with respect to any limited liability company, the articles of formation 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 and any agreement, instrument, filing or notice with respect thereto filed in connection with its
formation with the secretary of state or other department in the state of its formation, in each case as amended from time to time. 


    "Outstanding Amount" means (i) with respect to Committed 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 Committed Loans and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount
available for drawing under Letters of Credit taking effect on such date. 


    "Parent" means Longs Drug Stores Corporation, a Maryland corporation. 


    "Participant" has the meaning specified in Section 10.07(d). 


    "PBGC" means the Pension Benefit Guaranty Corporation. 


    "Pension Plan" means any "employee pension benefit plan" (as such term is defined in Section 3(2) of ERISA), other than a
Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any 


10





 


ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer plan (as 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. 


    "Plan" means any "employee benefit plan" (as such term is defined in Section 3(3) of ERISA) established by the Borrower or any
ERISA Affiliate. 


    "Pro Rata Share" means, with respect to each Lender, the percentage (carried out to the ninth decimal place) of the Aggregate
Commitments set forth opposite the name of such Lender on Schedule 2.01, as such share may be adjusted as contemplated herein. 


    "Register" has the meaning set forth in Section 10.07(c). 



    "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 Committed Loans, a Committed
Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice. 


    "Required Lenders" means, as of any date of determination, Lenders whose Voting Percentages aggregate more than 50%. 



    "Responsible Officer" means as to any Person the president, chief financial officer, treasurer or controller of such Person. Any
document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action
on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. Unless otherwise stated, a reference to a Responsible Officer is
to a Responsible Officer of the Borrower. 


    "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any
capital stock 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 of any option, warrant or other right to acquire any such capital stock. 


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


11





 


agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published
by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any
related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement. 


    "Swap 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 any
Lender). 


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


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


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


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


    "Swing Line Note" means a promissory note made by the Borrower in favor of the Swing Line Lender evidencing Swing Line Loans made by
such Lender, substantially in the form of Exhibit C-2. 


    "Swing Line Loan Notice" means a request for 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) $15,000,000 and (b) the Aggregate Commitments. The Swing
Line Sublimit is part of, and not in addition to, the Aggregate Commitments. 


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


    "Threshold Amount" means $25,000,000. 


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


    "UCP" has the meaning set forth in Section 2.03(h). 


    "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. 


    "Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i). 


    "Voting Percentage" means, as to any Lender, (a) at any time when the Aggregate Commitments are in effect, such Lender's Pro
Rata Share and (b) at any time after the termination of the Aggregate Commitments, the percentage (carried out to the ninth decimal place) which (i) the sum of (A) the 


12





 


Outstanding Amount of such Lender's Committed Loans, plus (B) such Lender's Pro Rata Share of the Outstanding Amount of L/C Obligations,  plus
(C) such Lender's Pro Rata Share of the Outstanding Amount of Swing Line Loans, then comprises of (ii) the Outstanding Amount of all
Loans and L/C Obligations; provided that if any Lender has failed to fund any portion of the Committed Loans, participations in L/C Obligations or
participations in Swing Line Loans required to be funded by it hereunder, such Lender's Voting Percentage shall be deemed to be zero, and the respective Pro Rata Shares and Voting Percentages of the
other Lenders shall be recomputed for purposes of this definition and the definition of "Required Lenders" without regard to such Lender's Commitment or the outstanding amount of its Committed Loans,
L/C Advances and funded participations in Swing Line Loans, as the case may be. 


    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
meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. 


    (b) (i)  The
words "herein" and "hereunder" and words of
similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof. 



    (ii) Article,
Section, Exhibit and Schedule references are to the Loan Document in which such reference appears. 


    (iii) The
term "including" is by way of example and not limitation. 



    (iv) The
term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports,
financial statements and other writings, however evidenced, whether in physical or electronic form. 




    (c) 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." 


    (d) 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) All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data 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) 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. 


13







  




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


 
 

ARTICLE II.
  THE COMMITMENTS AND CREDIT EXTENSIONS    
  


    2.01  Committed Loans.  Subject to the terms and conditions set forth herein, each Lender severally
agrees to make loans (each such loan, a "Committed Loan") to the Borrower from time to time on any Business Day during the period from the Closing Date
to the Maturity Date, in an aggregate amount not to exceed at any time outstanding the amount of such Lender's Commitment; provided that after giving
effect to any Committed Borrowing, (i) the aggregate Outstanding Amount of all Loans and L/C Obligations shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding
Amount of the Committed Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations,  plus such Lender's Pro
Rata Share 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. Committed Loans may be Base Rate Loans
or Eurodollar Rate Loans, as further provided herein. 


    2.02  Borrowings, Conversions and Continuations of Committed Loans.  


    (a) Each
Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Committed Loans as the same Type 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 10:00 a.m., California time, (i) three Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Committed Loans or of any conversion of Eurodollar Rate Committed Loans to Base Rate Committed Loans, and (ii) on the requested date of any Borrowing of Base Rate
Committed Loans. Each such telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible
Officer of the Borrower or by any other Person designated in writing by such a Responsible Officer. Each Committed Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans shall
be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Committed Borrowing of or conversion to Base Rate Committed Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting a Committed
Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Committed Loans as the same Type, (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 Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans
to be borrowed or to which existing Committed 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 Committed Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the 


14





 


applicable Committed Loans shall be made or continued as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest
Period then in effect with respect to the applicable Eurodollar Rate Committed Loans. If the Borrower requests a Committed Borrowing of, conversion to, or continuation of Eurodollar Rate Committed
Loans in any such Committed 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 Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of its Pro Rata Share of the applicable Committed 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 Committed Borrowing, each Lender shall make the amount of its Committed Loan available to the Administrative Agent in immediately available
funds at the Administrative Agent's Office not later than 11:00 a.m., California time, on the Business Day specified in the applicable Committed 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 by crediting the account of the Borrower on the books of Bank of America with the amount of such funds; provided that if, on the date of the Committed Borrowing there are L/C
Borrowings outstanding, then the proceeds of such Borrowing shall be applied, first, to the payment in full of any such L/C Borrowings and  second, to the
Borrower as provided above. 


    (c) Except
as otherwise provided herein, a Eurodollar Rate Committed Loan may be continued or converted only on the last day of the Interest Period for such Eurodollar
Rate Committed Loan.
During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Committed 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 Eurodollar Rate Committed Loan upon determination
of such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be conclusive in the absence of manifest error. The Administrative Agent shall notify the Borrower and
the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public announcement of such change. 


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


    2.03  Letters of Credit.  


    (a) The Letter of Credit Commitment.



     (i) Subject
to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other 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 Maturity Date, to issue Letters of Credit for the account of the Borrower or
certain Subsidiaries, and to amend or renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Letters of Credit; and (B) the
Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower; provided that the L/C Issuer shall not be obligated
to make any L/C Credit Extension with respect to any Letter of Credit, and no Lender shall be obligated to participate in any Letter of Credit, if as of the date of such L/C Credit Extension,
(x) the Outstanding Amount of all L/C Obligations and all Loans would exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loans of any Lender,  plus such
Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations, plus such Lender's
Pro Rata Share of the Outstanding Amount of all Swing Line Loans would exceed 



15





 


such Lender's Commitment, or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. 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. 


    (ii) The
L/C Issuer shall be under no obligation to issue any Letter of Credit if: 



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


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


    (C) the
expiry date of such requested Letter of Credit would occur after the Maturity Date, unless all the Lenders have approved such expiry date; 


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


    (E) such
Letter of Credit is not a commercial Letter of Credit, is in an amount less than $100,000, or is denominated in a currency other than Dollars. 




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




    (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 L/C Issuer in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of the Borrower. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof;
(C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the
case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of
Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C
Issuer may require. 


    (ii) Immediately
upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C
Issuer a risk 



16





 


participation in such Letter of Credit in an amount equal to the product of such Lender's Pro Rata Share times the amount of such Letter of Credit. On
the first Business Day of each week, or upon request of the Administrative Agent, the L/C Issuer shall provide the Administrative Agent with a list of all outstanding Letters 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 L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment. 




    (c) Drawings and Reimbursements; Funding of Participations.



     (i) Upon
any drawing under any Letter of Credit, the L/C Issuer shall notify the Borrower thereof at least one Business Day prior to the date of any payment by the L/C
Issuer under such Letter of Credit (each such date, an "Honor Date"). Unless the Borrower has reimbursed the L/C Issuer in an amount equal to the amount of such drawing not later than
10:00 a.m., California time, on each Honor Date, the L/C Issuer shall notify the Administrative Agent not later than 10:30 a.m.,
California time, on such date, of Borrower's failure to reimburse, and the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the
"Unreimbursed Amount"), and such Lender's Pro Rata Share thereof. In such event, the Borrower shall be deemed to have requested a Committed Borrowing of
Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in  Section 2.02 for the principal amount of
Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and
the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the
Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing;  provided that the lack of such
an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
 


    (ii) Each
Lender (including the Lender acting as L/C Issuer) shall upon any notice pursuant to  Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the L/C Issuer at
the Administrative Agent's Office
in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 11:30 a.m., California time, 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 Committed
Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer. 



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



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



17





 


    (v) Each Lender's obligation to make Committed Loans or L/C Advances to reimburse the L/C 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 set-off,
counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance
of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided that each Lender's
obligation to make Committed Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in  Section 4.02. Any such
reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the
amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein. 


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




    (d) Repayment of Participations.



     (i) At
any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender's L/C Advance in respect of such payment
in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), or any payment of interest thereon, the Administrative
Agent will distribute to such Lender its Pro Rata Share 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 L/C Issuer pursuant to  Section 2.03(c)(i) is required to be returned, each Lender shall pay to the Administrative Agent
for the account of the L/C Issuer its Pro
Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect. 




    (e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter
of Credit, and to repay each L/C Borrowing and each drawing under a Letter of Credit that is refinanced by a Borrowing of Committed Loans, 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 agreement or instrument relating thereto; 



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



18





 


    (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
(other than any insufficiencies manifest on its face) or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under such Letter of Credit; 


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


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




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


    (f)  Role of L/C Issuer. Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the
L/C Issuer shall not have any responsibility to 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. No Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required
Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability
of any document or instrument related to any Letter of Credit or Letter of Credit Application. 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 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. No Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (v) of  Section 2.03(e); provided that anything in such clauses to the contrary notwithstanding, the
Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary,
damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer's willful misconduct or gross negligence or the L/C Issuer's willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid
or ineffective for any reason. 


19







 
    (g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C Issuer has honored any full or
partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Maturity Date, any Letter of Credit may for any reason remain
outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount
determined as of the date of such L/C Borrowing or the Maturity Date, as the case may be). 


    (h) Applicability of UCP. Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit
is issued (including any such agreement applicable to an Existing Letter of Credit), the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the "ICC") at the time of issuance (including the ICC decision published by the Commission on Banking Technique and
Practice on April 6, 1998 regarding the European single currency (euro)) shall apply to each commercial Letter of Credit. 


    (i)  Documentary and Processing Charges Payable to L/C Issuer. Borrower shall pay directly to L/C Issuer, upon demand,
for its sole account its customary documentary and processing charges in accordance with its standard schedule, as from time to time in effect, for the issuance, renewal, or amendment of a Letter of
Credit or other occurrence relating to a Letter of Credit for which such charges are customarily made. Such fees and charges are nonrefundable. 



    (j)  Conflict with Letter of Credit Application. In the event of any conflict between the terms hereof and the terms of
any Letter of Credit Application, 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 to make loans
(each such loan, a "Swing Line Loan") to the Borrower from time to time on any Business Day during the period from the Closing Date to the Maturity Date
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 Outstanding Amount of
Committed Loans of the Swing Line Lender in its capacity as a Lender of Committed Loans, may exceed the amount of such Lender's Commitment; provided  that after giving effect to any Swing Line Loan,
(i) the aggregate Outstanding Amount of all Loans and L/C Obligations shall not exceed the Aggregate Commitments, and
(ii) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all
L/C Obligations, plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's Commitment, and  provided
further, that the Swing Line Lender shall not make 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; provided  that the Swing Line Lender may terminate or suspend the Swing Line at any time in its sole discretion upon two Business Days' notice to the
Borrower. 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 Share times the amount of such Swing Line Loan. 



    (b) Borrowing Procedures. Unless the Swing Line Lender has notified the Borrower that the Swing Line has been terminated
or suspended as provided in Section 2.04(a), 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 12:00 noon, California
time, 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. 


20





 


Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless
the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 1:00 p.m., California time, 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 2:00 p.m., California time, on the borrowing date
specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower at its office by crediting the account of the Borrower on the books of the Swing Line Lender
in immediately available funds. 


    (c) Refinancing of Swing Line Loans.



     (i) The
Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the Borrower (which hereby irrevocably requests the Swing Line
Lender to so request on its behalf), that each Lender make a Committed Base Rate Loan in an amount equal to such Lender's Pro Rata Share of the amount of Swing Line Loans then outstanding. Such
request shall be made 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 Aggregate Commitments and the conditions set forth in  Section 4.02. The Swing Line Lender shall furnish the
Borrower with a copy of the applicable Committed Loan Notice submitted in connection with
such request promptly after delivering such notice to the Administrative Agent. Each Lender shall make an
amount equal to its Pro Rata Share of the amount specified in such Committed 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 11:00 a.m., California time, on the day specified in such Committed 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 Committed 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 Committed Borrowing cannot be requested in accordance with  Section 2.04(c)(i) or any Swing Line Loan cannot be refinanced by such a Committed Borrowing, the Committed Loan
Notice submitted by the
Swing Line Lender shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender's payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such
participation. 


    (iii) If
any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant
to the foregoing provisions of this Section 2.04(c) by the time specified in  Section 2.04(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to
the Federal Funds Rate from time to time in effect. 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 Committed 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
set-off, 



21





 


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 that each
Lender's obligation to make Committed Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in  Section 4.02. Any
such purchase of participations shall not 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 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 Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which
such Lender's participation was outstanding and funded) in the same funds as those received by the Swing Line Lender. 



    (ii) If
any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender,
each Lender shall pay to the Swing Line Lender its Pro Rata Share 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. 




    (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 Committed Base Rate Loan or participation pursuant to this Section 2.04 to
refinance such Lender's Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the Swing Line Lender. 


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



    2.05  Prepayments.  


    (a) The
Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Committed 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 10:00 a.m., California time,
(A) three Business Days prior to any date of prepayment of Eurodollar Rate Committed Loans, and (B) on the date of prepayment of Base Rate Committed Loans; (ii) any prepayment of
Eurodollar Rate Committed Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Committed Loans to be
prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of such Lender's Pro Rata Share of such prepayment. If such notice is given by the Borrower,
the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be
accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05. Each such prepayment shall
be applied to the Committed Loans of the Lenders in accordance with their respective Pro Rata Shares. 


    (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
11:00 a.m., California time, on the date of the prepayment, 


22





 


and (ii) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower,
the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. 


    (c) If
for any reason the Outstanding Amount of all Loans and L/C Obligations at any time exceeds the Aggregate Commitments then in effect, the Borrower shall
immediately prepay Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess. 


    2.06  Reduction or Termination of Commitments.  The Borrower may, upon notice to the Administrative
Agent, terminate the Aggregate Commitments, or permanently reduce the Aggregate Commitments to an amount not less than the then Outstanding Amount of all Loans and L/C Obligations;  provided that
(i) any such notice shall be received by the Administrative Agent not later than 10:00 a.m., California time, five Business
Days prior to the date of termination or reduction, and (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof. The
Administrative Agent shall promptly notify the Lenders of any such notice of reduction or termination of the Aggregate Commitments. Once reduced in accordance with this Section, the Aggregate
Commitments may not be increased. Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Pro Rata Share. All fees accrued until the effective
date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination. 


    2.07  Repayment of Loans.  


    (a) The
Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of Committed Loans outstanding on such date. 


    (b) The
Borrower shall repay each Swing Line Loan on the earlier to occur of (i) 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 Eurodollar Rate Committed Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum
equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each Base Rate Committed Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; and
(iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate  plus the Applicable Rate.



    (b) If
any amount payable by the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), 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 Law. Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be due and payable upon demand. 


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


    2.09  Fees.  In addition to certain fees described in subsection (i) 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 Share, a commitment fee equal to the Applicable Rate times the actual daily amount by which the Aggregate Commitments exceed the
Outstanding Amount of Committed Loans. The commitment fee shall accrue at all times from the Closing Date until the Maturity Date and shall be due and payable quarterly in arrears on the last Business
Day of each 


23





 


March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the Maturity Date. The commitment fee shall be calculated quarterly in arrears, and if
there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect. The commitment fee shall accrue at all times, including at any time during which one or more of the conditions in Article IV  is not met. 


    (b) Arrangement and Agency Fees. The Borrower shall pay an arrangement fee to the Arranger for the Arranger's own
account, and shall pay an agency fee to the Administrative Agent for the Administrative Agent's own account, in the amounts and at the times specified in the letter agreement, dated August 28,
2001 (the "Fee Letter"), between the Borrower, the Arranger and the Administrative Agent. Such fees shall be fully earned when paid and shall be
nonrefundable for any reason whatsoever. 


    (c) Lenders' Upfront Fee. On the Closing Date, the Borrower shall pay to the Administrative Agent, for the account of
the Lenders in accordance with their respective Pro Rata Shares, an upfront fee in an amount set forth in the Fee Letter. Such upfront fees are for the credit facilities committed by the Lenders under
this Agreement and are fully earned on the date paid. The upfront fee paid to each Lender is solely for its own account and is nonrefundable for any reason whatsoever. 


    2.10  Computation of Interest and Fees.  Interest on Base Rate Loans shall be calculated on the basis of
a year of 365 or 366 days, as the case may be, and the actual number of days elapsed. Computation of all other types of interest and all fees shall be calculated on the basis of a year of
360 days and the actual number of days elapsed, which results in a higher yield to the payee thereof than a method based on a year of 365 or 366 days. 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 bear interest for one day. 



    2.11  Evidence of Debt.  


    (a) The
Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the
Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder
to pay any amount owing with respect to the Loans or L/C 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, such Lender's Loans may be evidenced by a Committed Loan Note and/or a Swing Line Note, as applicable, in addition to such accounts or records. Each Lender may attach schedules
to its Note(s) and endorse thereon the date, Type (if applicable), amount and maturity of the applicable 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. 


    2.12  Payments Generally.  


24





 


    (a) 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 10:00 a.m., California time, on the date specified herein. The Administrative Agent will promptly
distribute to each Lender its Pro Rata Share (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 10:00 a.m., California time, shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. 


    (b) Subject
to the definition of "Interest Period," 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. 


    (c) If
at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, L/C Borrowings, interest and fees
then due hereunder, such funds shall be applied (i) first, toward costs and expenses (including Attorney Costs and amounts payable under  Article III) incurred by the Administrative Agent and each Lender and payable by the Borrower hereunder,
(ii) second, toward repayment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts
of interest and fees then due to such parties, and (iii) third, toward repayment of principal and L/C Borrowings then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal and L/C Borrowings then due to such parties. 


    (d) Unless
the Borrower or any Lender has notified the Administrative Agent prior to the date any payment is required to be made by it to the Administrative Agent
hereunder, that the Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrower or such Lender, as the case may be, has timely made
such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in
fact made to the Administrative Agent in immediately available funds, then: 



     (i) if
the Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was
made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds, at the Federal Funds Rate from time to time in effect; and 



    (ii) if
any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds,
together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent
(the "Compensation Period") at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Committed Loan, as the case may be, included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent may make a demand therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights which the Administrative 



25





 


Agent or the Borrower may have against any Lender as a result of any default by such Lender hereunder. 




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


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


    (f)  The
obligations of the Lenders hereunder to make Committed Loans and to fund participations in Letters of Credit and Swing Line Loans are several and not joint.
The failure of any Lender to make any Committed Loan or to fund any such participation 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 Committed Loan or purchase its participation. 


    (g) 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.  If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of the Committed Loans made by it, or the participations in L/C Obligations or in Swing
Line Loans held by it, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Committed Loans
made by them and/or such subparticipations in the participations in L/C Obligations or Swing Line Loans held by them, as the case may be, as shall be necessary to cause such purchasing Lender to share
the excess payment in respect of such Committed Loans or such participations, as the case may be, pro rata with each of them; provided that if all or
any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying Lender's ratable share (according to the proportion of (i) the amount of such paying Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off,
but subject to Section 10.09 with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section and will in
each case notify the Lenders following any such purchases or repayments. Each Lender that purchases a participation pursuant to this Section shall from and after such purchase have the right to give
all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender
were the original owner of the Obligations purchased. 


26







  




    2.14  Increase in Commitments.  


    (a) Provided
there exists no Default, upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Borrower may on a one-time
basis within two and one-half years of the Closing Date, request an increase in the Aggregate Commitments up to an aggregate of $200,000,000. Following consultation with the Administrative
Agent, the Borrower 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). 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 Share of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment. 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, the Borrower may also invite additional Eligible
Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel. 


    (b) If
the Aggregate Commitments are increased in accordance with this Section, the Administrative Agent and the Borrower shall determine the effective date (the
"Increase Effective Date") and the final allocation 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. 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, including a Compliance Certificate demonstrating pro forma compliance with this Agreement after
giving effect to such increase and (iii) certifying that, before and after giving effect to such increase, the representations and warranties contained in  Article V are true and correct on and
as of the Increase Effective Date and no Default exists. The Borrower shall deliver new or amended
Committed Loan Notes reflecting the increased Commitment of any Lender holding or requesting a Note. The Administrative Agent shall distribute an amended  Schedule 2.01 (which shall be deemed
incorporated into this Agreement), to reflect any changes therein resulting from such increase. The Borrower
shall prepay any Committed 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 Committed Loans ratable with any revised Pro Rata Shares arising from any nonratable increase in the Commitments under this Section. 


    (c) This
Section shall supersede any provisions in Section 10.01 to the contrary. 


 
 

ARTICLE III.
  TAXES, YIELD PROTECTION AND ILLEGALITY    
  


    3.01  Taxes.  


    (a) Any
and all payments by the Borrower to or for the account of the Administrative Agent or any Lender under any Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto,  excluding,
in the case of the Administrative Agent, the Swing Line Lender, and the L/C Issuer, and each Lender, taxes imposed on or measured by its net
income, 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 the Administrative Agent or such Lender, as
the case may be, is organized or maintains a lending office (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, 


27





 


(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 and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, the Borrower shall furnish to the Administrative Agent (which shall forward the same to such Lender) the original or a certified copy of a receipt evidencing payment thereof;  provided that the
Borrower shall not be required to pay any additional amounts with respect to amounts owing to a Lender that (x) is not
incorporated under the laws of the United States of America or a state thereof, and (y) has not delivered to the Administrative Agent the forms required by this Agreement. 


    (b) In
addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar
levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document
(hereinafter referred to as "Other Taxes"). 


    (c) If
the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative
Agent or any Lender, the Borrower shall also pay to the Administrative Agent (for the account of such Lender) or to such Lender, at the
time interest is paid, such additional amount that such Lender specifies is necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured
by net income) such Lender would have received if such Taxes or Other Taxes had not been imposed. 


    (d) The
Borrower agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Agent and such Lender, (ii) amounts payable under  Section 3.01(c) and
(iii) any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, in each
case whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Payment under this subsection (d) shall be made within
30 days after the date the Lender or the Administrative Agent makes a demand therefor, which notice shall specify in reasonable detail the amounts demanded. 


    (e) If
a Lender or the Administrative Agent receives a refund or credit in respect of any 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 3.01, it shall, promptly after the date of such receipt, pay over the
amount of such refund or credit to the Borrower, net of all reasonable out-of-pocket expenses of such Lender or Administrative Agent in obtaining such refund (it being agreed
that if such expenses are expected by such Lender or Administrative Agent to be material, such Lender or Administrative Agent will attempt in good faith to consult with the Borrower prior to incurring
such expenses); provided that the Borrower, upon the written request of such Lender or Administrative Agent, agrees to repay to such Lender or Administrative Agent the amount paid over to the Borrower
in the event that such Lender or the Administrative Agent is required to repay such refund or credit to such taxation authority. 


    (f)  Each
Lender agrees to designate a different Lending Office if such designation will avoid the need for notice under this  Section 3.01 and will not, in the good faith judgment of such Lender, otherwise
be materially disadvantageous to such Lender. 



    3.02  Illegality.  If any Lender determines that any Law has made it unlawful, or that any Governmental
Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through the 


28





 


Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate Committed 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 Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period
thereof, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such
day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount
so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender,
otherwise be materially disadvantageous to such Lender. 


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


    3.04  Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.  


    (a) If
any Lender determines that as a result of the introduction of or any change in or in the interpretation of any Law, or such Lender's compliance therewith, there
shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Loans or (as the case may be) issuing or participating in Letters of Credit, or a
reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this subsection (a) any such increased costs or reduction in
amount resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or any foreign jurisdiction or any political subdivision of either thereof under the Laws of which such Lender is organized or has its
Lending Office, and (iii) reserve requirements contemplated by Section 3.04(c)), then from time to time upon demand of such Lender (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction. 


    (b) If
any Lender determines that the introduction of any Law regarding capital adequacy or any change therein or in the interpretation thereof, or compliance by such
Lender (or its Lending Office) therewith, has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time upon demand of such Lender (with a
copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction. 



    (c) The
Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits
(currently known as "Eurocurrency liabilities"), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by
such 


29





 


Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan,  provided the Borrower
shall have received at least 15 days' prior notice (with a copy to the Administrative Agent) of such additional interest
from such Lender. If a Lender fails to give notice 15 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 15 days from receipt of such
notice; provided that the Borrower shall not be liable to any Lender or the Administrative Agent under this Section 3.04 for costs incurred more
than 180 days prior to the receipt by the Borrower of such demand for payment from such Lender or, as the case may be, the Administrative Agent, unless such costs were incurred prior to such
180-day period solely as a result of such change in present or future applicable law being retroactive to a date prior to such 180-day period. 


    (d) Each
Lender agrees to designate a different Lending Office if such designation will avoid the need for notice under this  Section 3.04 and will not, in the good faith judgment of such Lender, otherwise
be materially disadvantageous to such Lender. 


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



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


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


    (c) any
assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to  Section 10.16; 



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


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


    3.06  Matters Applicable to all Requests for Compensation.  


    (a) A
certificate of the Administrative Agent or any Lender claiming compensation under this Article III and
setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, the Administrative Agent or such Lender may
use any reasonable averaging and attribution methods. 


    (b) Upon
any Lender's making a claim for compensation under Section 3.01 or  3.04, the Borrower may remove or replace such Lender in accordance with
Section 10.16. 


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


30





 
 
 

ARTICLE IV.
  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS    
  


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


    (a) Unless
waived by all the Lenders (or by the Administrative Agent with respect to immaterial matters or items specified in clause (v) or (vi) below
with respect to which the Borrower has given assurances satisfactory to the Administrative Agent that such items shall be delivered promptly following the Closing Date), the Administrative Agent's
receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing
Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent and its legal counsel: 



     (i) executed
counterparts of this Agreement and, if there are Material Subsidiaries on the Closing Date, the Guaranty, sufficient in number for distribution to the
Administrative Agent, each Lender and the Borrower; 


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


    (iii) a
Swing Line Note executed by the Borrower in favor of the Swing Line Lender (if it requests such a Note) in the principal amount of the Swing Line Sublimit; 


    (iv) 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 to establish the identities of and verify the 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; 


    (v) such
evidence as the Administrative Agent may reasonably require to verify that each Loan Party is duly organized or formed, validly existing, in good standing and
qualified to engage in business in each jurisdiction in which it is required to be qualified to engage in business, including certified copies of each Loan Party's Organization Documents, certificates
of good standing and/or qualification to engage in business and tax clearance certificates; 


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


   (vii) an
opinion of counsel to each Loan Party in form and substance satisfactory to the Administrative Agent; and 



   (viii) evidence
that all Loans, interest, fees and other accrued amounts under the Existing Credit Agreement have been or concurrently with the Closing Date are paid in
full; and 


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




    (b) Any
fees required to be paid on or before the Closing Date shall have been paid. 


31







  




    (c) Unless
waived by the Administrative Agent, the Borrower shall have paid all Attorney Costs of the Administrative Agent payable under  Section 10.04 to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of Attorney Costs as shall constitute its
reasonable estimate of Attorney Costs 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). 


    4.02  Conditions to all Credit Extensions and Conversions and Continuations.  The obligation of each
Lender to honor any Request for Credit Extension is subject to the following conditions precedent: 


    (a) The
representations and warranties of the Borrower contained in Article V, or which are contained in any
document furnished at any time under or in connection herewith, shall be true and correct on and as of the date of such Credit Extension, conversion or continuation, 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. 


    (b) No
Default shall exist, or would result from such proposed Credit Extension, conversion or continuation. 


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


    (d) The
Administrative Agent shall have received, in form and substance satisfactory to it, such other assurances, certificates, documents or consents related to the
foregoing as the Administrative Agent or the Required Lenders reasonably may require. 


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


 
 

ARTICLE V.
  REPRESENTATIONS AND WARRANTIES    
  


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


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


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


32





 

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


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


    5.05  Financial Statements; No Material Adverse Effect.  


    (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 Parent and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities,
direct or contingent, of the Parent and its consolidated Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness. 


    (b) The
unaudited consolidated financial statements of the Parent and its Subsidiaries for the fiscal quarter ended July 26, 2001, and the related consolidated
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 subject to ordinary, good faith year end audit adjustments; (ii) fairly present the financial condition of the Parent
and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby; and (iii) show all material indebtedness and other liabilities, direct or contingent,
of the Parent and its consolidated Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness. 


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


    5.06  Litigation.  Except as set forth in the Parent's Form 10-K for the fiscal year
ended January 25, 2001, and on file with the Securities and Exchange Commission, there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Borrower,
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) could reasonably be expected to have a Material
Adverse Effect. 


    5.07  No Default.  Neither the Borrower nor any Subsidiary is in default under or with respect to any
Contractual Obligation that could be reasonably 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 its Subsidiaries 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 could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. As of the Closing Date, 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 and its Subsidiaries conduct in the ordinary course of
business a review of the effect of existing Environmental Laws and claims alleging potential 


33





 


liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Borrower has reasonably concluded that such
Environmental Laws and claims could not, 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 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 customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Borrower or its Subsidiaries operate. 


    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 and for which adequate reserves have been provided in accordance with GAAP.
There is no proposed tax assessment against the Borrower or any Subsidiary that, if made, could reasonably be expected to have a Material Adverse Effect. 


    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 could be reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that
has resulted or could 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 Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA. 


    5.13  Subsidiaries.  As of the Closing Date, the Borrower has no Subsidiaries other than those
specifically disclosed in Part (a) of Schedule 5.13 and, except for de minimus shares held in publicly held companies, has no equity
investments in any other corporation or entity other than those specifically disclosed in Part(b) of Schedule 5.13. 



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


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


34





 


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


    5.15  Disclosure.  No statement, information, report, representation, or warranty made by any Loan Party
in any Loan Document or furnished to the Administrative Agent or any Lender by or on behalf of any Loan Party in connection with any Loan Document contains any untrue statement of a material fact or
omits any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 


 
 

ARTICLE VI.
  AFFIRMATIVE COVENANTS    
  


    So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation 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, 6.03 and 6.11) cause each Subsidiary (and Parent
to the extent referenced therein) to: 


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


    (a) as
soon as available, but in any event within 105 days after the end of each fiscal year of Parent, a consolidated balance sheet of Parent and its
Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income 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, audited and accompanied by a report and opinion of Deloitte & Touche LLP or another independent certified public accountant of nationally
recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with GAAP and shall not be subject to any qualifications or exceptions as to
the scope of the audit nor to any qualifications and exceptions not reasonably acceptable to the Required Lenders (provided that the delivery of such financial statements and audit report may be in
the form of Parent's Annual Report on Form 10-K for such fiscal year (together with the Parent's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the Securities and Exchange Commission), together with a certificate of a
Responsible Officer that such financial statements of the Parent and its Subsidiaries fairly presents in all material respects the consolidated financial condition and results of operations of the
Parent and the Borrower and its Subsidiaries for the relevant period end and period; and 


    (b) as
soon as available, but in any event within 60 days after the end of each of the first three fiscal quarters of each fiscal year of Parent, a consolidated
balance sheet of Parent and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income and cash flows for such fiscal quarter and for the portion of
Parent'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 and certified by a Responsible Officer as fairly presenting the financial condition, results of operations and cash flows of Parent and its Subsidiaries
in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes (provided that the delivery of such financial statements and certificate may be in
the form of Parent's Quarterly Report on Form 10-Q for such fiscal quarter prepared in accordance with the requirements therefor and filed with the Securities and Exchange
Commission), together with a certificate of a Responsible Officer of Parent and Borrower that such financial statements of the Parent and its Subsidiaries fairly presents in all material respects the
consolidated financial condition 


35





 


and results of operations of the Parent and the Borrower and its Subsidiaries for the relevant period end and period. 


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


    (a) concurrently
with the delivery of the financial statements referred to in Section 6.01(a), a certificate of
its independent certified public accountants certifying such financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Event of Default or, if
any such Event of Default shall exist, stating the nature and status of such event; 


    (b) concurrently
with the delivery of the financial statements referred to in Sections 6.01(a) and  (b), a duly completed Compliance Certificate signed by a Responsible
Officer; 


    (c) promptly
after any request by the Administrative Agent or Required Lenders, 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 Parent by independent accountants in connection with the accounts or books of the Parent or any Subsidiary, or any
audit of any of them; 


    (d) 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
Parent, and copies of all annual, regular, periodic and special reports and registration statements which the Parent may file or be required to file with the Securities and Exchange Commission 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; and 



    (e) promptly,
such additional information regarding the business, financial or corporate affairs of the Parent, Borrower or any Subsidiary as the Administrative Agent,
at the request of Required Lenders, may from time to time request. 


    Each
document required to be delivered pursuant to Section 6.01(a) or  (b) or Section 6.02(d) shall
be deemed to have been delivered on the earlier of the date
on which the Borrower posts such document on the Borrower's website on the Internet at the website address listed on Schedule 10.02 hereof, or
when such document is posted on the Securities and Exchange Commission's website at www.sec.gov or on IntraLinks; provided that (i) the Borrower
shall deliver paper copies of all such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a request to cease delivering paper copies is
given by the Administrative Agent or such Lender and (ii) the Borrower shall notify by facsimile the Administrative Agent and each Lender of the posting of each such document. The
Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above in this paragraph, 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) upon
a Responsible Officer becoming aware of the occurrence of any Default; 


    (b) of
any matter that has resulted or could reasonable be expected to result in a Material Adverse Effect, including (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; 


36





 


    (c) of any litigation, investigation or proceeding affecting any Loan Party in which the amount involved exceeds the Threshold Amount, or in which injunctive relief or
similar relief is sought, which relief, if granted, could reasonably be expected to have a Material Adverse Effect; 


    (d) of
the occurrence of any ERISA Event; and 


    (e) of
any material change in accounting policies or financial reporting practices by the Parent, the Borrower or any Subsidiary. 


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


    6.04  Payment of Obligations.  Pay and discharge as the same shall become due and payable, all its
obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if unpaid, would by law
become a Lien upon its property (except a Lien permitted by Article VII); and (c) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness. 


    6.05  Preservation of Existence, Etc.  Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its organization; take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except in a transaction permitted by Section 7.03 or  7.04; and preserve or renew all of its
registered patents, trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect. 


    6.06  Maintenance of Properties.  (a) Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted; and (b) make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect. 


    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 against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of
such types and in such amounts as are customarily carried under similar circumstances by such other Persons. 


    6.08  Compliance with Laws.  Comply in all material respects with the requirements of all Laws applicable
to it or to its business or property, except in such instances in which (i) such requirement of Law is being contested in good faith or a bona fide dispute exists with respect thereto; or
(ii) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect. 


    6.09  Books and Records.  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. 


37






 

    6.10  Inspection Rights.  Permit Administrative Agent or any Lender, or any employee, agent or
representative thereof: 


    (a) No Default.  If no Default then exists, at the expense of the Administrative Agent (subject to its
right of reimbursement from the Lenders) or such Lender and upon reasonable prior notice to Borrower, to visit the principal executive office of Borrower, to discuss the affairs, finances and accounts
of Borrower and its Subsidiaries with Borrower's officers and, with the consent of Borrower, which consent will not be unreasonably withheld, to visit the other offices and properties of Borrower and
each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; and 


    (b) Default.  If a Default then exists, at the expense of Borrower, to visit and inspect any of the
offices or properties of Borrower or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers and, with the written consent of Borrower (which consent shall not be unreasonably withheld), independent public accountants at
Borrower's executive offices, all at such times and as often as may be requested. 


    6.11  Compliance with ERISA.  Do, and cause each of its ERISA Affiliates to do, each of the following:
(a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state law; (b) cause each Plan which is qualified
under Section 401(a) of the Code to maintain such qualification; and (c) make all required contributions to any Plan subject to Section 412 of the Code. 



    6.12  Use of Proceeds.  Use the proceeds of the Credit Extensions for working capital and other general
corporate purposes not in contravention of any Law or of any Loan Document. 


    6.13  Guarantors.  (a) cause each Material Subsidiary in existence on the Closing Date to become a party
to the Guaranty on the Closing Date; and 


    (b) respect
to the period after the Closing Date, immediately upon any Person becoming a Material Subsidiary, (i) cause such Subsidiary to become a party to the
Guaranty as a Guarantor and (ii) deliver, or cause such Subsidiary to deliver, to the Agent items relating to such Subsidiary and of the type specified in Section 4.01(a)(iv), (v),
(vii) and (xi); and 


    (c) cause
sufficient Subsidiaries of the Borrower to be parties to the Guaranty so that the sum of the shareholders' equity of the Borrower and such Guarantors on an
unconsolidated basis at all times exceeds 90% of the shareholders' equity of the Parent and its Subsidiaries on a consolidated basis determined in accordance with GAAP. 


 
 

ARTICLE VII.
  NEGATIVE COVENANTS    
  


    So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation 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 and Negative Pledges.  Create, incur, assume or suffer to exist, any Lien or Negative Pledge
upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following: 



    (a) Liens
pursuant to any of the Loan Documents; 


    (b) Liens
and Negative Pledges existing on the date hereof and listed on Schedule 7.01 and any renewals or
extensions thereof, provided that the property covered thereby is not increased and any renewal or extension of the obligations secured or benefited
thereby is permitted by Section 7.02(b); 


38







  




    (c) Liens
for taxes not yet due or which are being contested in good faith and by appropriate proceedings, 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, 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 (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature 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 in an aggregate amount not in excess of the Threshold Amount (except to the extent covered by independent
third-party insurance as to which the insurer has acknowledged in writing its obligation to cover), unless any such judgment remains undischarged for a period of more than 30 consecutive days during
which execution is not effectively stayed; 


    (i)  Liens
securing Indebtedness permitted under Section 7.02(e); 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
of a consignor of merchandise to Borrower or a Subsidiary on such consignor's merchandise, and any Lien of a lessor of equipment to Borrower or a Subsidiary
on such lessor's leased equipment. 


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


    (a) Indebtedness
under any of the Loan Documents; 


    (b) Indebtedness
outstanding on the date hereof and listed on Schedule 7.02 and any refinancings, refundings,
renewals or extensions thereof; provided that 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; 


    (c) Guaranty
Obligations of the Borrower or any Subsidiary in respect of Indebtedness otherwise permitted hereunder of the Borrower or any wholly-owned Subsidiary; 


    (d) 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 


39





 


non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party; 


    (e) 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 that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed 5% of Consolidated
Shareholders' Equity; 


    (f)  Unsecured
Indebtedness in an aggregate principal amount not to exceed at any time outstanding the amount by which 15% of Consolidated Shareholders' Equity exceeds
the Indebtedness permitted to be outstanding under Section 7.02(e); and 


    (g) obligations
in respect of Existing Letters of Credit. 


    7.03  Fundamental Changes.  Merge or consolidate with or into any Person or liquidate,
wind-up or dissolve itself, or permit or suffer any liquidation or dissolution or sell all or substantially all of its assets, except, that so long as no Default exists or would result
therefrom: 


    (a) any
Subsidiary of Borrower may merge with (i) Borrower provided that Borrower shall be the continuing or
surviving corporation, (ii) with any one or more Subsidiaries of Borrower, and (iii) with any joint ventures, partnerships and other Persons, so long as such joint ventures, partnerships
and other Persons will, as a result of making such merger and all other contemporaneous related transactions, become a Subsidiary of Borrower; provided
that when any wholly-owned Subsidiary of Borrower is merging into another Subsidiary of Borrower, the wholly-owned Subsidiary of Borrower shall be the continuing or surviving Person; 



    (b) any
Subsidiary of Borrower may sell all or substantially all of its assets (upon voluntary liquidation or otherwise), to Borrower or any of its Subsidiaries;  provided that when any wholly-owned Subsidiary
of Borrower is selling all or substantially all of its assets to another Subsidiary of Borrower, the
Subsidiary acquiring such assets shall be a wholly-owned Subsidiary of Borrower; and 


    (c) a
Subsidiary may sell its assets, or the Borrower may dispose of its entire interest in a Subsidiary, in a Disposition permitted by  Section 7.04. 



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


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


    (b) Dispositions
of inventory in the ordinary course of business; 


    (c) Dispositions
of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement
property, (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property or (iii) the board of directors or senior management of
the Borrower or such Subsidiary has determined in good faith that the failure to replace such property will not be detrimental to the business of the Borrower or such Subsidiary; 


    (d) Dispositions
of property by any Subsidiary to the Borrower or to a wholly-owned Subsidiary; 


    (e) Sale
and leaseback transactions and other Dispositions not exceeding $100,000,000 in the aggregate for all such transactions in any fiscal year; and 


    (f)  Dispositions
permitted by Section 7.03;


provided that any Disposition pursuant to clauses (a) through (f) shall be for fair market value. 


40





 

    7.05  Restricted Payments.  Declare or make, directly or indirectly, any Restricted Payment, or incur any
obligation (contingent or otherwise) to do so, except that: 


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


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


    (c) the
Borrower and each Subsidiary may purchase, redeem or otherwise acquire shares of its common stock or warrants or options to acquire any such shares with the
proceeds received from the substantially concurrent issue of new shares of its common stock; and 


    (d) So
long as no Default has occurred and is continuing (a) Borrower may make distributions to Parent not exceeding in any fiscal year 50% of Consolidated Net
Income for the preceding fiscal year and (b) Borrower may purchase, or make distributions to Parent for the purpose of purchasing, shares of capital stock of the Parent for a total
consideration not exceeding $30,000,000 for all such purchases in any fiscal year of the Parent. 


    7.06  ERISA.  At any time engage in a transaction which could be subject to Section 4069 or
4212(c) of ERISA, or permit any Plan to (a) engage in any non-exempt "prohibited transaction" (as defined in Section 4975 of the Code); (b) fail to comply with ERISA
or any other applicable Laws; or (c) incur any material "accumulated funding deficiency" (as defined in Section 302 of ERISA), which, with respect to each event listed above, could
reasonably be expected to have a Material Adverse Effect. 


    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. 


    7.08  Transactions with Affiliates.  Except as otherwise permitted hereunder, enter into any material
transaction (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate, except pursuant to the reasonable
requirements of the Borrower's business and upon fair and reasonable terms no less favorable to the Borrower than would be obtainable in a comparable arm's-length transaction with a Person not an
Affiliate; provided that, subject to the restrictions of Section 7.05, Borrower may purchase
shares of capital stock of the Parent from any Person (or their decedent's estate) listed in clauses (i) through (v) of the parenthesis in the definition of "Change of Control" so long
as the price at which any such shares are so purchased is not more than the then-current market price for the capital stock of the Parent. 


    7.09  Burdensome Agreements.  Enter into any Contractual Obligation that limits the ability (a) of
any Subsidiary to make Restricted Payments to the Borrower or to otherwise transfer property to the Borrower or (b) of the Borrower or any Subsidiary to create, incur, assume or suffer to exist
Liens on property of such 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 or to refund indebtedness originally incurred for such purpose. 


    7.11  Hostile Acquisitions.  Use the proceeds of any Loan in connection with the acquisition of a voting
interest of five percent or more in any Person if such acquisition is opposed by the board of directors or management of such Person unless
(a) Borrower has given Administrative Agent (who shall 


41





 


promptly notify each Lender) five Business Days' prior notice thereof and (b) no Lender shall have, within that period, notified Administrative Agent (who shall promptly notify Borrower) that
such Lender does not consent to the use of the proceeds of such Loan for that purpose. 


    7.12  Limitations on Upstreaming.  Agree to any restriction or limitation on the making of Restricted
Payments or transferring of assets from any Subsidiary of Borrower to Borrower or from Parent to Borrower. 


    7.13  Acquisitions.  Acquire a business or its assets for a consideration, including assumption of direct
or contingent debt, in excess of $75,000,000 for any single acquisition or purchase transaction or in excess of $150,000,000 for all such transactions in any single fiscal year;  provided that no such
acquisition shall be made (a) during any period that a Default has occurred and is continuing, (b) if any Default
would result therefrom; (c) if any Person acquired as a result of any such acquisition is not a wholly-owned Subsidiary of the Borrower, or (d) unless prior to the consummation thereof,
Parent and Borrower have delivered to Administrative Agent a Compliance Certificate, in form and substance satisfactory to Required Lenders, demonstrating, on a pro forma basis, that after giving
effect to such acquisition, the Parent is in compliance with Section 7.14. 


    7.14  Financial Covenants.  Permit their financial condition, when taken together with the Parent and
its other Subsidiaries (if any) on a consolidated basis, to be such that any of the following financial tests will not be met: 



    (a) The
Fixed Charge Coverage Ratio (A) as of the end of any fiscal quarter ending on or after October 25, 2001 and on or prior to April 25, 2002,
shall be equal to or greater than 2.30 to 1.00, (B) as of the end of any fiscal quarter ending on or after July 26, 2002, and on or prior to October 26, 2003, shall be equal to or
greater than 2.40 to 1.00, and (C) as of the end of any fiscal quarter ending after October 26, 2003, shall be equal to or greater than 2.50 to 1.00. 


    (b) The
Consolidated Adjusted Total Debt to Consolidated Adjusted Total Capitalization Ratio shall be equal to or less than 0.55 to 1.00 as of the end of any fiscal
quarter. 


    (c) The
Consolidated Adjusted Total Debt to Consolidated EBITDAR Ratio (A) as of the end of any fiscal quarter ending on or after October 25, 2001, and on
or prior to October 26, 2003, shall be equal to or less than 3.50 to 1.00, and (B) as of the end of any fiscal quarter ending after October 26, 2003, shall be equal to or less
than 3.25 to 1.00. 


 
 

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 fails to pay (i) when and as required to be paid
herein, any amount of principal of any Loan or any L/C Obligation, or (ii) within three days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any commitment or
other 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, 6.02, 6.03, 6.05, 6.10, 6.12, or 6.13 or  Article VII; provided
that in the case of any default under Section 6.01, 6.02, 6.03, 6.05, 6.10,
6.12, or 6.13, Borrower shall have five Business Days after notice or becoming aware of such default to cure such default; 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 


42





 


    (d) Representations and Warranties.  Any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith proves to have been incorrect when made or deemed made; or 


    (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 Guaranty Obligation (other than Indebtedness hereunder and Indebtedness
under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guaranty Obligation in excess of the
Threshold Amount 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 Guaranty Obligation (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 or redeemed (automatically or otherwise) prior to its stated maturity, or such
Guaranty Obligation 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; or 


    (f)  Insolvency Proceedings, Etc.  Any Loan Party or any of its Subsidiaries institutes or consents to
the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any 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 30 days after its issue or levy; or 


    (h) Judgments.  There is entered against the Borrower or any Subsidiary (i) a final judgment or
order for the payment of money in an aggregate amount exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage
or by a contractual indemnity by a creditworthy party which does not dispute liability), or (ii) any non-monetary final judgment that has, or could reasonably be expected to have, 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 30 consecutive days during
which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or 


    (i)  ERISA.  (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which
has resulted or could reasonably be expected to result in liability of the Borrower under Title IV 


43





 


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 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 the agreement of all the Lenders or satisfaction in full of all the Obligations, ceases to be in full force and effect, or is declared by a court of competent jurisdiction to
be null and void, invalid or unenforceable in any respect; 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)  Material Adverse Effect.  There occurs any event or circumstance that has a Material Adverse Effect. 



    8.02  Remedies Upon Event of Default.  If any Event of Default occurs, the Administrative Agent shall, at
the request of, or may, with the consent of, the Required Lenders, 


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


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



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


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


provided that upon the occurrence of any event specified in subsection (f) of  Section 8.01, the obligation of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash
Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender. 


 
 

ARTICLE IX.
  ADMINISTRATIVE AGENT    
  


    9.01  Appointment and Authorization of Administrative Agent.  


    (a) Each
Lender hereby irrevocably appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers
as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied
covenants, functions, 


44





 


responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties. 


    (b) The
L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith until such time (and
except for so long) as the Administrative Agent may agree at the request of the Required Lenders to act for the L/C Issuer with respect thereto;  provided that the L/C Issuer shall have all of the
benefits and immunities (i) provided to the Administrative Agent in this  Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit
issued by it or proposed
to be issued by it and the application and agreements for letters of credit pertaining to the Letters of Credit as fully as if the term "Administrative Agent" as used in this  Article IX included
the L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the
L/C Issuer. 


    9.02  Delegation of Duties.  The Administrative Agent may execute any of its duties under this Agreement
or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all
matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the
absence of gross negligence or willful misconduct. 


    9.03  Liability of Administrative Agent.  No Agent-Related Person shall (a) be liable for any
action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in
any manner to any Lender or participant for any recital, statement, representation or warranty made by any Loan Party or any officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Loan Party or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any Affiliate thereof. 


    9.04  Reliance by Administrative Agent.  


    (a) The
Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Loan Party), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other
Loan Document in accordance with a request or 


45





 


consent of the Required Lenders or all the Lenders, if required hereunder, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and
participants. Where this Agreement expressly permits or prohibits an action unless the Required Lenders otherwise determine, the Administrative Agent shall, and in all other instances, the
Administrative Agent may, but shall not be required to, initiate any solicitation for the consent or a vote of the Lenders. 



    (b) For
purposes of determining compliance with the conditions specified in 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 either sent by the Administrative Agent to such Lender for
consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender. 


    9.05  Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Borrower or the Lenders, as the case may be, of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Default as may
be directed by the Required Lenders in accordance with Article VIII; provided that unless and until the Administrative Agent has received any
such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable or in the
best interest of the Lenders. 


    9.06  Credit Decision; Disclosure of Information by Administrative Agent.  Each Lender acknowledges that
no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review
of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether
Agent-Related Persons have disclosed material information in their possession. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Loan Parties and their respective Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to the Borrower and the other Loan Parties hereunder. Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not
taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Loan Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the
Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates which may come into the possession of any Agent-Related Person. 


46







  




    9.07  Indemnification of Administrative Agent.  Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party to
do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by
it; provided  that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Person's own gross negligence or willful
misconduct; provided that no action taken in accordance with the directions of the Required Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive termination of the Aggregate Commitments, the payment of all Obligations hereunder and the resignation or replacement of the Administrative
Agent. 


    9.08  Administrative Agent in its Individual Capacity.  Bank of America and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business
with each of the Loan Parties and their respective Affiliates as though Bank of America were not the Administrative Agent hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding any Loan Party or its Affiliates (including information that may be subject to
confidentiality obligations in favor of such Loan Party or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect
to its Loans, Bank of America shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent, and
the terms "Lender" and "Lenders" include Bank of America in its individual capacity. 


    9.09  Successor Administrative Agent.  The Administrative Agent may resign as Administrative Agent upon
30 days' notice to the Lenders; provided that any such resignation by Bank of America shall also constitute its resignation as Swing Line Lender. If the Administrative Agent resigns under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders which successor administrative agent shall be consented to by the Borrower at all
times other than during the existence of an Event of Default (which consent of the Borrower shall not be unreasonably withheld or delayed). If no successor administrative agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Borrower, a successor administrative agent from among
the Lenders. Upon the acceptance of its appointment as successor administrative agent hereunder, the
Person acting as such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and Swing Line Lender and the respective terms
"Administrative Agent," and "Swing Line Lender" shall mean such successor administrative agent, Letter of Credit issuer and swing line lender, and the retiring Administrative Agent's appointment,
powers and duties as Administrative Agent shall be terminated and the retiring Swing Line Lender's rights, powers and duties as such shall be terminated, without any other or further act or deed on
the part of such retiring Swing Line Lender or any other Lender. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of
this Article IX and Sections
10.04 and 10.05 shall inure to its benefit as to any actions taken or 


47





 


omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is
30 days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. 


    9.10  Other Agents.  No Lender identified on the facing page or signature pages of this Agreement as a
"syndication agent" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing,
no Lender so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking action hereunder. 


 
 

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 that no such amendment, waiver or consent shall, unless in writing and signed by each of the Lenders
directly affected thereby and by the Borrower, and acknowledged by the Administrative Agent, do any of the following: 


    (a) extend
or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant
to Section 8.02), except for any such increase made in accordance
with Section 2.14; 


    (b) postpone
any date fixed by this Agreement or any other Loan Document for any payment or mandatory prepayment of principal, interest, fees or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document; 


    (c) reduce
the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the proviso below) any fees or
other amounts payable hereunder or under any other Loan Document, or change the manner of computation of any financial covenant used in determining the Applicable Rate that would result in a reduction
of any interest rate on any Loan; provided 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 at the Default Rate; 



    (d) change
the percentage of the Aggregate Commitments or of the aggregate unpaid principal amount of the Loans and L/C Obligations which is required for the Lenders or
any of them to take any action hereunder; 


    (e) change
the Pro Rata Share or Voting Percentage of any Lender (except for any change resulting
from Section 2.14 or 3.06(b)); 


    (f)  amend
this Section, or Sections
2.12 or 2.14, or any provision herein providing for consent or other action by all the Lenders; or 



    (g) release
any Guarantor from the Guaranty, except that Administrative Agent shall, on behalf of Lenders, release, in connection with any Disposition permitted by  Section 7.04; provided that such Guarantor is not a Material
Subsidiary at the time of such release and, after giving effect to such release, the sum of the shareholders' equity of the Borrower and the remaining Guarantors on an 


48





 


unconsolidated basis exceeds 90% of the shareholders' equity of the Parent and its Subsidiaries on a consolidated basis determined in accordance with GAAP; 


and, provided further that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C
Issuer in addition to the Required Lenders or each directly-affected Lender, as the case may be, affect the rights or duties of the L/C Issuer under this Agreement or any Letter of Credit Application
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 Required
Lenders or each directly-affected Lender, as the case may be, 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 Required Lenders or each directly-affected Lender, as the case may be, affect the rights or duties of the Administrative Agent under
this Agreement or any other Loan Document; (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the respective parties thereto; and
(v) the amount to which the Aggregate Commitments may be increased under Section 2.14(a) may be changed with
the consent of the Borrower, Administrative Agent, and Required Lenders. Notwithstanding anything to the contrary herein, any Lender that has a Voting Percentage of zero shall not have any right to
approve or disapprove any amendment, waiver or consent hereunder, except that the Pro Rata Share of such Lender may not be increased (except for any such increase resulting
from Section 2.14 or 3.06(b)) without the consent of
such Lender. 


    10.02  Notices and Other Communications; Facsimile Copies.  


    (a)  General.  Unless otherwise
expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission) and mailed, faxed or delivered, to the address,
facsimile number or (subject to subsection (c) below) electronic mail address specified for notices
on Schedule 10.02; or, in the case of the Borrower, the Administrative Agent, the L/C Issuer or the Swing Line
Lender, to such other address as shall be designated by such party in a notice to the other parties, and in the case of any other party, to such other address as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line Lender. All such notices and other communications shall be deemed to be given or made upon the earlier to occur of
(i) actual receipt by the intended recipient and (ii) (A) if delivered by hand or by courier, when signed for; (B) if delivered by mail, four Business Days after deposit in
the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is
subject to the provisions of subsection (c) below), when delivered; provided that notices and other communications
to the Administrative Agent, the L/C Issuer and the Swing Line Lender pursuant to Article II shall not be effective
until actually received by such Person. Any notice or other communication permitted to be given, made or confirmed by telephone hereunder shall be given, made or confirmed by means of a telephone call
to the intended recipient at the number specified on Schedule 10.02, it being understood and agreed that a
voicemail message shall in no event be effective as a notice, communication or confirmation hereunder. 


    (b)  Effectiveness of Facsimile Documents and
Signatures.  Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable
Law, have the same force and effect as manually-signed originals and shall be binding on all Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent may also require that any
such documents and signatures be confirmed by a manually-signed original thereof; provided that the failure to request or
deliver the same shall not limit the effectiveness of any facsimile document or signature. 


    (c)  Limited Use of Electronic
Mail.  Electronic mail and Internet and intranet websites may be used only to distribute routine communications, such as financial statements and other
information as 


49





 


provided in Section 6.02, and to distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose. 


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


    10.03  No Waiver; Cumulative Remedies.  No failure by any Lender 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 or therein
provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 


    10.04  Attorney Costs, Expenses and Taxes.  The Borrower agrees (a) to pay or reimburse the
Administrative Agent for all costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Agreement and the other Loan Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration
(provided that expenses claimed in connection with administration shall only include out of pocket expenses and Attorney Costs incurred with respect to the Obligations) of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or reimburse the Administrative Agent and each Lender for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any "workout" or
restructuring in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative
Agent and the cost of independent public accountants and other outside experts retained by the Administrative Agent or any Lender. The agreements in this Section shall survive the termination of the
Aggregate Commitments and repayment of all other Obligations. 


    10.05  Indemnification by the Borrower.  Whether or not the transactions contemplated hereby are
consummated, the Borrower shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively, the "Indemnitees"), from and against any and all liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document
or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment,
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the 


50





 


documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), or (c) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided that such indemnity shall not, as to any Indemnitee (and other
Indemnitee(s) liable under the laws of principal and agency for the acts of such Indemnitee), be available to the extent that such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements 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. The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Commitments and the
repayment, satisfaction or discharge of all the other Obligations. All amounts due under this Section 10.05 shall be payable
within ten Business Days after demand therefor. 


    10.06  Payments Set Aside.  To the extent that the Borrower makes a payment to the Administrative Agent
or any Lender, or the Administrative Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off 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 or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and
(b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share 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. 


    10.07  Successors and Assigns.  


    (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by
the Borrower without such consent shall be null and void). 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 Indemnitees) any
legal or equitable right, remedy or claim under or by reason of this Agreement. 


    (b) Any
Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to
it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender's
Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder) 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 $5,000,000 unless each of the Administrative Agent
and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed), (ii) each partial assignment
shall be made as an assignment of a proportionate part of all 


51





 


the assigning Lender's rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not apply to rights in respect of
Swing Line Loans, and (iii) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 3.01, 3.04 and  3.05 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 new or replacement Notes to the assigning Lender and 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) The
Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at the Administrative Agent's Office a copy of each Assignment
and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. 


    (d) Any
Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural
person or the Borrower or any of the Borrower's Affiliates or Subsidiaries (each, a "Participant") in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender's participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification that would (i) postpone any date upon which any payment of money is scheduled to be paid to such Participant,
(ii) reduce the principal, interest, fees or other amounts payable to such Participant, or (iii) release any Guarantor from the Guaranty except to the extent permitted
by Section 10.01(g). 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 10.09 as though it were a
Lender, provided such Participant agrees to be subject
to Section 2.12 as though it were a Lender. 


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    (e) 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 10.15 as though it were a Lender. 



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



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


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


    "Approved Fund" means any Fund that is administered or managed by (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. 




    (h) Notwithstanding
anything to the contrary contained herein, if at any time the L/C Issuer or Swing Line Lender assigns all of its Commitment and Loans pursuant to
subsection (b) above, (i) L/C Issuer may upon 30 days' notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) Swing Line Lender may upon five Business
Days' notice to the Borrower, terminate the Swing Line. In the event of any such resignation as L/C Issuer or termination of the Swing Line, the Borrower shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided that no failure by the Borrower to appoint any
such successor shall affect the resignation of the resigning L/C Issuer or the termination of the Swing Line, as the case may be. The resigning L/C Issuer shall retain all the rights and obligations
of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the
right to require the Lenders to make Base Rate Committed Loans or fund participations in Unreimbursed Amounts pursuant
to Section 2.03(c)). If Swing Line Lender terminates the Swing Line, 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 termination, including the right to require the Lenders to make Base Rate Committed
Loans or fund participations in outstanding Swing Line Loans pursuant to Section 2.04(c). 


    10.08  Confidentiality.  Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory authority; (c) to the extent required by applicable laws or 


53





 


regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) to the extent believed in good faith to be necessary in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder; (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any direct or indirect contractual counterparty or prospective counterparty (or such contractual counterparty's or prospective counterparty's professional advisor)
to any credit derivative transaction relating to obligations of the Borrower; (g) with the consent of the Borrower; (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the
Borrower; or (i) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about a
Lender's or its Affiliates' investment portfolio in connection with ratings issued with respect to such Lender or its Affiliates. In addition, the Administrative Agent and the Lenders may disclose the
existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Administrative Agent and the
Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions. For the purposes of this Section,
"Information" means all information received from the Borrower relating to the Borrower or its business, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the
Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information, if
not manifestly confidential, is identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own
confidential information. 


    10.09  Set-off.  In addition to any rights and remedies of the Lenders provided by law, upon
the occurrence and during the continuance of any Event of Default, each Lender is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such
notice being waived by the Borrower (on its own behalf and on behalf of each Loan Party) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the account of the respective Loan Parties against any and all
Obligations owing to such Lender, now or hereafter existing, irrespective of whether or not the Administrative Agent or such Lender shall have made demand under this Agreement or any other Loan
Document and although such Obligations may be contingent or unmatured. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and
application made by such Lender; provided that the failure to give such notice shall not affect the validity of such
set-off and application. 


54







       10.10  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 of non-usurious interest permitted by applicable Law (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. 


    10.11  Counterparts; Facsimile Signatures; Effectiveness.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of the signature page to this
Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement, and any party delivering an executed counterpart of the signature page to this Agreement by
facsimile to any other party shall thereafter also promptly deliver a manually executed counterpart of this Agreement to such other party, but the failure to deliver such manually executed counterpart
shall not affect the validity, enforceability, and binding effect of this Agreement. Until the Closing Date occurs, the Existing Credit Agreement shall remain in full force and effect in accordance
with the provisions thereof, and notwithstanding the occurrence of the Closing Date, any rights existing in favor of Administrative Agent or any Lender arising from any commitment or fees,
indemnification yield protection, taxes, and similar provisions of the Existing Credit Agreement, relating in each case to the period prior to the Closing Date, and any rights of the letter of credit
issuer under the Existing Credit Agreement with respect to the Existing Letters of Credit, shall survive the effectiveness of this Agreement. On the Closing Date, the Existing Credit Agreement shall
be amended and restated in its entirety hereby, and from and after the Closing Date, the rights, obligations, and remedies of the parties hereto shall be governed by this Agreement and the other Loan
Documents. 


    10.12  Integration.  This Agreement, together with the other Loan Documents, comprises the complete and
integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall
control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be
construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof. 


    10.13  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 shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding. 


    10.14  Severability.  Any provision of this Agreement and the other Loan Documents to which the Borrower
is a party that 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 


55





 


remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 


    10.15  Tax Forms.  (a) Each Lender that is not a "United States person" within the meaning of
Section 7701(a)(30) of the Code (a "Foreign Lender") shall deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or upon accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to
such Person and entitling it to an exemption from withholding tax on all payments to be made to such Person by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such Person by the Borrower pursuant to this Agreement) or such other evidence satisfactory to the Borrower and the Administrative Agent that
such Person is entitled to an exemption from U.S. withholding tax. Thereafter and from time to time, each such Person shall (i) promptly submit to the Administrative Agent such additional duly
completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then
current United States laws and regulations to avoid, or such evidence as is satisfactory to the Borrower and the Administrative Agent of any available exemption from United States withholding taxes in
respect of all payments to be made to such Person by the Borrower pursuant to this Agreement, (ii) promptly notify the Administrative Agent of any change in circumstances which would modify or
render invalid any claimed exemption, and (iii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that the Borrower make any deduction or withholding for taxes from amounts payable to such
Person. If such Person fails to deliver the above forms or other documentation, then the Administrative Agent may withhold from any interest payment to such Person an amount equivalent to the
applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction. 


    (b) Upon
the request of the Administrative Agent, each Lender that is a "United States person" within the meaning of Section 7701(a)(30) of the Code shall
deliver to the Administrative Agent two duly
signed completed copies of IRS Form W-9. If such Lender fails to deliver such forms, then the Administrative Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable back-up withholding tax imposed by the Code, without reduction and the Borrower shall have no indemnification obligation with respect to the amounts so
withheld. 


    (c) If
any Governmental Authority asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from
payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the
amounts payable to the Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Agent. The obligation of the Lenders under this Section shall
survive the termination of the Aggregate Commitments, repayment of all Obligations and the resignation of the Administrative Agent. 


    10.16  Removal and Replacement of Lenders.  



    (a) Under
any circumstances set forth herein providing that the Borrower shall have the right to remove or replace a Lender as a party to this Agreement, the Borrower
may, upon notice to such Lender and the Administrative Agent, (i) remove such Lender by terminating such Lender's Commitment or (ii) replace such Lender by causing such Lender to assign
its Commitment (without payment of any assignment fee) pursuant to Section 10.07(b) to one or more other Lenders or
Eligible Assignees procured by the Borrower; provided that if the Borrower elects to exercise such right with respect to
any Lender pursuant to Section 3.06(b), it shall be obligated to remove or replace, as the case may be, all Lenders that have made
similar requests for compensation pursuant 


56





 


to Section 3.01 or 3.04. The Borrower shall
(x) pay in full all principal, interest, fees and other amounts owing to such Lender through the date of removal or replacement (including any amounts payable pursuant
to Section 3.05), (y) provide appropriate assurances and indemnities (which may include letters of credit) to the L/C
Issuer and the Swing Line Lender as each may reasonably require with respect to any continuing obligation to purchase participation interests in any L/C Obligations or any Swing Line Loans then
outstanding, and (z) release such Lender from its obligations under the Loan Documents. Any Lender being replaced shall execute and deliver an Assignment and Assumption with respect to such
Lender's Commitment and outstanding Credit Extensions. The Administrative Agent shall distribute an amended Schedule 2.01, which
shall be deemed incorporated into this Agreement, to reflect changes in the identities of the Lenders and adjustments of their respective Commitments and/or Pro Rata Shares resulting from any such
removal or replacement. 


    (b) In
order to make all the Lenders' interests in any outstanding Credit Extensions ratable in accordance with any revised Pro Rata Shares after giving effect to the
removal or replacement of a Lender, the Borrower shall pay or prepay, if necessary, on the effective date thereof, all outstanding Committed Loans of all Lenders, together with any amounts due
under Section 3.05. The Borrower may
then request Committed Loans from the Lenders in accordance with their revised Pro Rata Shares. The Borrower may net any payments required hereunder against any funds being provided by any Lender or
Eligible Assignee replacing a terminating Lender. The effect for purposes of this Agreement shall be the same as if separate transfers of funds had been made with respect thereto. 



    (c) This
section shall supersede any provision in Section 10.01 to the contrary. 


    10.17  Governing Law.  


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


    (b) ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA SITTING IN THE CITY
AND COUNTY OF SAN FRANCISCO OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE. 


    10.18  Waiver of Right to Trial by Jury.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR 


57





 


OTHERWISE; AND EACH PARTY 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. 


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



	BORROWER:	 	LONGS DRUG STORES CALIFORNIA, INC.
	

 	
 	

By	

/s/ STEVEN F. McCANN
 (One of Two Required and Authorized Signatures)
	 	 	Title:	Senior Vice President

Chief Financial Officer & Treasurer

	

 	
 	

And By	

/s/ GROVER L. WHITE   

	 	 	Title:	Assistant Secretary
	

ADMINISTRATIVE AGENT:	
 	
BANK OF AMERICA, N.A., as

Administrative Agent
	

 	
 	

By	

/s/ RONALD R. PARSONS   

	 	 	Name:	Ronald R. Parsons

	 	 	Title:	Vice President

	

LENDERS:	
 	
BANK OF AMERICA, N.A., as a Lender and

Swing Line Lender
	

 	
 	

By	

/s/ LISA M. THOMAS   

	 	 	Name:	Lisa M. Thomas

	 	 	Title:	Senior Vice President

	

 	
 	
FLEET NATIONAL BANK, as a Lender,

Syndication Agent, and L/C Issuer
	

 	
 	

By	

/s/ PETER L. GRISWOLD   

	 	 	Name:	Peter L. Griswold

	 	 	Title:	Managing Director




58





 

	

 	
 	
BANK OF HAWAII
	

 	
 	

By	

/s/ DANA TAKUSHI   

	 	 	Name:	Dana Takushi

	 	 	Title:	Vice President

	

 	
 	
WASHINGTON MUTUAL BANK
	

 	
 	

By	

/s/ TONY YEE   

	 	 	Name:	Tony Yee

	 	 	Title:	Assistant Vice President

	

 	
 	
UNION BANK OF CALIFORNIA, N.A.
	

 	
 	

By	

/s/ TIMOTHY P. STREB   

	 	 	Name:	Timothy P. Streb

	 	 	Title:	Vice President

	

 	
 	
U.S. BANK NATIONAL ASSOCIATION
	

 	
 	

By	

/s/ JANET JORDAN   

	 	 	Name:	Janet Jordan

	 	 	Title:	Vice President

	

 	
 	
WELLS FARGO BANK, NATIONAL ASSOCIATION
	

 	
 	

By	

/s/ KATRINA K. FLOWERS   

	 	 	Name:	Katrina K. Flowers

	 	 	Title:	Assistant Vice President

	

 	
 	
WELLS FARGO BANK, NATIONAL ASSOCIATION
	

 	
 	

By	

/s/ LAUREN DOWNUM   

	 	 	Name:	Lauren Downum

	 	 	Title:	Sr. Relationship Manager





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QuickLinks


TABLE OF CONTENTS


ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

Applicable Rate


ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS


ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS


ARTICLE V. REPRESENTATIONS AND WARRANTIES

ARTICLE VI. AFFIRMATIVE COVENANTS

ARTICLE VII. NEGATIVE COVENANTS


ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

ARTICLE IX. ADMINISTRATIVE AGENT


ARTICLE X. MISCELLANEOUS