Document:

Exhibit
10.1

 

EXECUTION
COPY

 

Published CUSIP Number [                      ]

 

 

REVOLVING
CREDIT AGREEMENT

 

 

dated as of
December 14, 2004

 

 

STAPLES,
INC.

 

 

THE
LENDERS NAMED HEREIN,

 

 

BANK OF
AMERICA, N.A.,

as
ADMINISTRATIVE AGENT,

 

 

CITICORP
USA, INC.,

as
Syndication Agent,

 

and

 

HSBC BANK
USA, NATIONAL ASSOCIATION

JPMORGAN
CHASE BANK, NA and WACHOVIA BANK, NATIONAL ASSOCIATION,

as
Co-Documentation Agents

 

 

with

 

 

BANC OF
AMERICA SECURITIES LLC

Having
Acted as sole Lead Arranger and sole Book Manager

 

 

TABLE OF CONTENTS

 

	
  §1.

  	
  DEFINITIONS
  AND RULES OF INTERPRETATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §1.1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §1.2.

  	
  Rules of
  Interpretation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §1.3.

  	
  Exchange
  Rates; Currency Equivalents.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §1.4.

  	
  Additional
  Alternative Currencies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §1.5.

  	
  Change of Currency

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §1.6.

  	
  Letter of Credit
  Amounts.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §2.

  	
  THE REVOLVING
  CREDIT FACILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.1.

  	
  Commitment
  to Lend Syndicated Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.2.

  	
  Requests for
  Syndicated Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.3.

  	
  Competitive Bid
  Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.3.1.

  	
  Competitive Bid
  Borrowings

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.3.2.

  	
  Maximum
  Competitive Bid Loans; Funding Losses

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.3.3.

  	
  Repayment
  of Competitive Bid Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.4.

  	
  Funds
  for Revolving Credit Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.4.1.

  	
  Funding Procedures

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.4.2.

  	
  Advances
  by Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.5.

  	
  Reduction of Total
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.6.

  	
  Maturity
  and Other Mandatory Repayments of Revolving Credit Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.7.

  	
  Optional
  Repayments of Revolving Credit Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.8.

  	
  Interest
  on Revolving Credit Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.9.

  	
  Conversion Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.9.1.

  	
  Conversion
  to Different Type of Syndicated Loan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.9.2.

  	
  Continuation
  of Type of Syndicated Loan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.9.3.

  	
  Eurocurrency Rate
  Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.10.

  	
  The Swing Line

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.10.1.

  	
  The Swing Line
  Loans.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.10.2.

  	
  Notice of
  Borrowing

  	
   

  

 

i

 

	
   

  	
   

  	
  §2.10.3.

  	
  Interest on Swing
  Line Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §2.10.4.

  	
  Repayment of Swing
  Line Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §2.11.

  	
  Evidence of Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §3.

  	
  LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.1.

  	
  Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.2.

  	
  Procedures
  for Issuance and Amendment of Letters of Credit; Auto-Extension of Letters of
  Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.3.

  	
  Drawings and
  Reimbursements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.4.

  	
  Repayment of
  Participations.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.5.

  	
  Obligations
  Absolute

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.6.

  	
  Role of Issuing Bank

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.7.

  	
  Cash Collateral.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.8.

  	
  Applicability of
  ISP and UCP.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.9.

  	
  Transitional
  Letters of Credit.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.10.

  	
  Letter of Credit
  Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §3.11.

  	
  Conflict with
  Issuer Documents.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §4.

  	
  CERTAIN
  GENERAL PROVISIONS; FEES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.1.

  	
  Closing
  and Administrative Agent Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.2.

  	
  Other Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §4.2.1.

  	
  Facility Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §4.2.2.

  	
  Utilization Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.3.

  	
  Funds for Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §4.3.1.

  	
  Payments
  to Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §4.3.2.

  	
  No Offset, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §4.3.3.

  	
  Withholding

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.4.

  	
  Computations.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.5.

  	
  Inability
  to Determine Eurocurrency Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.6.

  	
  Illegality

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.7.

  	
  Additional Costs,
  Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.8.

  	
  Capital Adequacy

  	
   

  

 

ii

 

	
   

  	
  §4.9.

  	
  Certificate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.10.

  	
  Indemnity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.11.

  	
  Interest After
  Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.12.

  	
  Replacement
  of Individual Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.13.

  	
  Additional Reserve
  Requirements.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §4.14.

  	
  Guaranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §5.

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.1.

  	
  Corporate
  Authority

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §5.1.1.

  	
  Incorporation;
  Good Standing

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §5.1.2.

  	
  Authorization

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §5.1.3.

  	
  Enforceability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.2.

  	
  Governmental
  Approvals

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.3.

  	
  Title to
  Properties; Leases

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.4.

  	
  Financial
  Statements; Fiscal Year

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.5.

  	
  No Material
  Changes, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.6.

  	
  Franchises,
  Patents, Copyrights, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.7.

  	
  Litigation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.8.

  	
  Compliance
  with Other Instruments, Laws, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.9.

  	
  Tax Status

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.10.

  	
  No Event of
  Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.11.

  	
  Holding
  Company and Investment Company Acts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.12.

  	
  Employee Benefit
  Plans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §5.12.1.

  	
  In General

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §5.12.2.

  	
  Terminability of
  Welfare Plans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §5.12.3.

  	
  Guaranteed Pension
  Plans

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §5.12.4.

  	
  Multiemployer
  Plans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.13.

  	
  Regulations U and
  X, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.14.

  	
  Environmental
  Compliance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.15.

  	
  Foreign
  Assets Control Regulations, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §5.16.

  	
  Subsidiaries, Etc

  	
   

  

 

iii

 

	
  §6.

  	
  AFFIRMATIVE
  COVENANTS OF THE BORROWER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.1.

  	
  Punctual Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.2.

  	
  Maintenance of
  Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.3.

  	
  Records and
  Accounts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.4.

  	
  Financial
  Statements, Certificates and Information

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.5.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.6.

  	
  Legal
  Existence; Maintenance of Properties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.7.

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.8.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.9.

  	
  Inspection
  of Properties and Books, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.10.

  	
  Compliance
  with Laws, Contracts, Licenses, and Permits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.11.

  	
  Employee Benefit Plans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.12.

  	
  Use of Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.13.

  	
  Licenses and
  Permits

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.14.

  	
  Guaranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §6.15.

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §7.

  	
  CERTAIN
  NEGATIVE COVENANTS OF THE BORROWER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.1.

  	
  Restrictions on
  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.2.

  	
  Restrictions on
  Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.3.

  	
  Restrictions on
  Investments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.4.

  	
  Distributions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.5.

  	
  Employee Benefit
  Plans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.6.

  	
  Merger
  and Consolidation; Acquisitions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.7.

  	
  Disposition
  of Assets and Sale-Leaseback Transactions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.8.

  	
  Subordinated Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §7.9.

  	
  Transactions with
  Affiliates.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §8.

  	
  FINANCIAL
  COVENANTS OF THE BORROWER

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.1.

  	
  Fixed Charge
  Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §8.2.

  	
  Adjusted
  Funded Debt to Total Capitalization Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §9.

  	
  CLOSING CONDITIONS

  	
   

  

 

iv

 

	
   

  	
  §9.1.

  	
  Loan Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.2.

  	
  Certified
  Copies of Charter Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.3.

  	
  Corporate Action

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.4.

  	
  Incumbency
  Certificate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.5.

  	
  Opinion of Counsel

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.6.

  	
  Payment of Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.7.

  	
  Termination
  of Existing Credit Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.8.

  	
  Compliance
  Certificate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.9.

  	
  UCC Search Results

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.10.

  	
  Certificate of
  Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §9.11.

  	
  No Material
  Adverse Change

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §10.

  	
  CONDITIONS TO ALL
  BORROWINGS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §10.1.

  	
  Representations
  True; No Event of Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §10.2.

  	
  No Legal Impediment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §10.3.

  	
  Governmental
  Regulation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §10.4.

  	
  Proceedings and
  Documents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §10.5.

  	
  Alternative
  Currency.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §11.

  	
  EVENTS
  OF DEFAULT; ACCELERATION; ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.1.

  	
  Events
  of Default and Acceleration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.2.

  	
  Termination of
  Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §11.3.

  	
  Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §12.

  	
  SETOFF

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §13.

  	
  THE ADMINISTRATIVE
  AGENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.1.

  	
  Authorization

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.2.

  	
  Employees and
  Agents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.3.

  	
  No Liability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.4.

  	
  No Representations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §13.4.1.

  	
  General

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §13.4.2.

  	
  Closing
  Documentation, etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.5.

  	
  Payments

  	
   

  

 

v

 

	
   

  	
   

  	
  §13.5.1.

  	
  Payments to
  Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §13.5.2.

  	
  Distribution
  by Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  §13.5.3.

  	
  Delinquent Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.6.

  	
  Holders of Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.7.

  	
  Indemnity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.8.

  	
  Administrative
  Agent as Lender; Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.9.

  	
  Resignation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.10.

  	
  Notification
  of Defaults and Events of Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §13.11.

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §14.

  	
  EXPENSES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §15.

  	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §16.

  	
  SURVIVAL OF
  COVENANTS, ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §17.

  	
  ASSIGNMENT AND
  PARTICIPATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §17.1.

  	
  General
  Conditions and Conditions to Assignment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §17.2.

  	
  Certain
  Representations and Warranties; Limitations; Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §17.3.

  	
  Register

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §17.4.

  	
  Participations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §17.5.

  	
  Limitation
  upon Participant Rights

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §17.6.

  	
  Assignee
  or Participant Affiliated with the Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §17.7.

  	
  Miscellaneous
  Assignment Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §17.8.

  	
  Resignation after
  Assignment.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §18.

  	
  NOTICES,
  ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §19.

  	
  GOVERNING
  LAW

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §20.

  	
  HEADINGS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §21.

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §22.

  	
  ENTIRE AGREEMENT,
  ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §23.

  	
  WAIVER OF JURY
  TRIAL

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §24.

  	
  CONSENTS,
  AMENDMENTS, WAIVERS, ETC

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §25.

  	
  TREATMENT
  OF CERTAIN CONFIDENTIAL INFORMATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §25.1.

  	
  Confidentiality

  	
   

  

 

vi

 

	
   

  	
  §25.2.

  	
  Prior Notification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  §25.3.

  	
  Other

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §26.

  	
  SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §27.

  	
  JUDGMENT CURRENCY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  §28.

  	
  USA PATRIOT ACT NOTICE.

  	
   

  

 

vii

 

EXHIBITS  AND  SCHEDULES

 

	
  Exhibit A

  	
  Form of Loan Request

  
	
  Exhibit B

  	
  Form of Competitive Bid
  Quote Request

  
	
  Exhibit C

  	
  Form of Invitation for
  Competitive Bid Quotes

  
	
  Exhibit D-1

  	
  Form of Competitive Bid
  Quote

  
	
  Exhibit D-2

  	
  Form of Notice of
  Competitive Bid Borrowing

  
	
  Exhibit D-3

  	
  Form of Notice of
  Competitive Bid Loans

  
	
  Exhibit E

  	
  Form of Guaranty

  
	
  Exhibit F

  	
  Form of Compliance
  Certificate

  
	
  Exhibit G

  	
  Form of Assignment and
  Acceptance

  
	
  Exhibit H

  	
  Form of Swing Line Loan
  Request

  
	
  Exhibit I

  	
  Form of Joinder
  Agreement

  
	
   

  	
   

  
	
  Schedule 1

  	
  Lenders

  
	
  Schedule 2

  	
  Guarantors

  
	
  Schedule 3

  	
  Mandatory Costs

  
	
  Schedule 3.9

  	
  Transitional Letters of
  Credit

  
	
  Schedule 5.3

  	
  Title to Properties,
  Leases

  
	
  Schedule 5.7

  	
  Litigation

  
	
  Schedule 5.9

  	
  Taxes

  
	
  Schedule 5.12

  	
  Pension Liabilities

  
	
  Schedule 5.14

  	
  Environmental
  Compliance

  
	
  Schedule 5.16(a)

  	
  Subsidiaries

  
	
  Schedule 5.16(b)

  	
  Joint Ventures and
  Partnerships

  
	
  Schedule 5.16(c)

  	
  Equity Interests of 50%
  or Less

  
	
  Schedule 7.1

  	
  Existing Indebtedness

  
	
  Schedule 7.2

  	
  Existing Liens

  
	
  Schedule 7.3

  	
  Existing Investments

  

 

 

REVOLVING  CREDIT  AGREEMENT

 

This REVOLVING CREDIT AGREEMENT,  dated as of December 14, 2004, is by and among (a) STAPLES, INC. (the “Borrower”),
a Delaware corporation having its principal place of business at 500 Staples
Drive, Framingham, MA 01701, (b) BANK OF AMERICA, N.A.
and the other lending institutions listed on Schedule  1 attached
hereto (the “Lenders”), (c) BANK OF AMERICA, N.A., as administrative agent (in such
capacity, the “Administrative  Agent”) for the Lenders, (d) CITICORP USA, INC. as  syndication agent for the Lenders (the “Syndication  Agent”),
and (e) HSBC BANK USA, NATIONAL ASSOCIATION. JPMORGAN
CHASE BANK, NA and WACHOVIA BANK, NATIONAL ASSOCIATION, as
co-documentation agents for the Lenders (collectively the “Co-Documentation  Agents”).

 

§1.          DEFINITIONS AND RULES OF
INTERPRETATION.

 

§1.1.       Definitions. 
The following terms shall have the meanings set forth in this §1 or
elsewhere in the provisions of this Credit Agreement referred to below:

 

Absolute  Rate.  With respect to any
Competitive Bid Loan (other than a Eurocurrency Loan), the fixed rate of
interest per annum specified by the Lender making such Competitive Bid Loan in
its related Competitive Bid Quote.

 

Absolute  Rate  Competitive  Bid  Loan A Competitive Bid
Loan bearing interest at an Absolute Rate.

 

Adjustment
Date. 
The date which is three (3) Business Days after each Compliance
Certificate is delivered by the Borrower pursuant to §§6.4(a) and (b) hereof.

 

Administrative  Agent.  As defined in the preamble hereto.

 

Administrative  Agent  Fees.  See §4.1 hereof.

 

Administrative  Agent’s  Head
Office.  The Administrative Agent’s
office located at 1850 Gateway Blvd., Concord CA 94520-3282, or at such other
location as the Administrative Agent may designate from time to time.

 

Administrative  Questionnaire
An Administrative Questionnaire in a form supplied by the Administrative Agent.

 

Administrative  Agent’s  Special
Counsel.  Bingham McCutchen LLP or
such other counsel as may be approved by the Administrative Agent.

 

Affiliate.  Any Person that would be considered to be an
affiliate of a Person under Rule 144(a) of the Rules and Regulations of the
Securities and Exchange Commission, as in effect on the Closing Date, if such
Person were issuing securities.

 

 

Agents.  Collectively, (a) the Administrative Agent,
(b) the Syndication Agent and (c) the Co-Documentation Agents.

 

Agreement  Currency.  See §27 hereof.

 

Alternative  Currency. Each of
the Euro, the Sterling, the Canadian Dollar and each other currency (other than
Dollars) that is approved in accordance with §1.4 hereof.

 

Alternative  Currency  Equivalent.
At any time, with respect to any amount denominated in Dollars, the equivalent
amount thereof in the applicable Alternative Currency as determined by the
Administrative Agent or the Issuing Bank, as the case may be, at such time on
the basis of the Spot Rate (determined in respect of the most recent
Revaluation Date) for the purchase of such Alternative Currency with Dollars.

 

Alternative  Currency  Sublimit.
An amount equal to the lesser of the Total Commitment and $375,000,000.  The Alternative Currency Sublimit is part of,
and not in addition to, the Total Commitments.

 

Applicable
Margin. 
The Applicable Margin shall be in effect for each period commencing on
an Adjustment Date through the date immediately preceding the next Adjustment
Date (each a “Rate  Adjustment  Period”) based on a
determination of the Fixed Charge Coverage Ratio and the Senior Debt
Rating.  The Fixed Charge Coverage Ratio
shall be determined as at the end of the fiscal period for which financial
statements and a Compliance Certificate have most recently been delivered to
the Administrative Agent pursuant to §6.4 hereof and the Senior Debt Rating
shall be determined as of the last day of the preceding Rate Adjustment
Period.  The Applicable Margin shall be
the applicable rate per  annum, corresponding to the lower of the
Levels set forth in the table below (with Level I being the lowest level and
Level V being the highest level) corresponding to the Fixed Charge Coverage
Ratio or the Senior Debt Rating, provided  that if the Fixed
Charge Coverage Ratio and Senior Debt Rating are more than one Level apart, the
Applicable Margin shall be one Level below the higher of the two applicable
Levels.  In the event that the Senior
Debt Ratings assigned by Moody’s and S&P are not equivalent, the following
criteria shall determine which Level shall be applicable to the Senior Debt
Rating: (a) if the Senior Debt Ratings are one Level apart, the Level
applicable to the Senior Debt Rating shall be the lower of the two Levels and
(b) if the Senior Debt Ratings are more than one Level apart, the Level
applicable to the Senior Debt Rating shall be one Level below the higher of the
two Levels.  For purposes of clarity, the
parties hereto acknowledge that (i) the Applicable Margin with respect to
Eurocurrency Rate Loans shall be the rate per annum set forth in column D in
the table below, (ii) the Facility Fee shall be the rate per annum set forth in
column E in the table below and (iii) the Utilization Fee shall be the rate per
annum set forth in column F.

 

2

 

	
  A

  	
   

  	
  B

  	
   

  	
  C

  	
   

  	
  D

  	
   

  	
  E

  	
   

  	
  F

  	
   

  
	
  Level

  	
   

  	
  Fixed Charge

  Coverage

  Ratio

  	
   

  	
  Senior Debt

  Rating

  	
   

  	
  Eurocurrency

  Rate

  Loans

  	
   

  	
  Facility Fee

  	
   

  	
  Utilization Fee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  >
  2.75:1

  	
   

  	
  S&P: A-

  Moody’s: A3 or

  better

  	
   

  	
  0.310%

  	
   

  	
  0.090%

  	
   

  	
  0.100%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II

  	
   

  	
  >
  2.50:1

  and

  <2.75:1

  	
   

  	
  S&P: BBB+

  Moody’s: Baa1 or

  better

  	
   

  	
  0.390%

  	
   

  	
  0.110%

  	
   

  	
  0.100%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III

  	
   

  	
  >
  2.25:1

  and

  <2.50:1

  	
   

  	
  S&P: BBB

  Moody’s: Baa2 or

  better

  	
   

  	
  0.475%

  	
   

  	
  0.150%

  	
   

  	
  0.125%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV

  	
   

  	
  >
  2.00:1

  and

  <2.25:1

  	
   

  	
  S&P: BBB-

  Moody’s: Baa3 or

  better

  	
   

  	
  0.675%

  	
   

  	
  0.200%

  	
   

  	
  0.125%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V

  	
   

  	
  <2.00:1

  	
   

  	
  S&P: lower than

  BBB-

  Moody’s: lower

  than Baa3

  	
   

  	
  0.875%

  	
   

  	
  0.250%

  	
   

  	
  0.125%

  	
   

  

 

Notwithstanding the foregoing, (A) for the period
commencing on the Closing Date through the date immediately preceding the first
Adjustment Date to occur after the date which is six months from the Closing
Date, the Applicable Margin shall be that corresponding to Level II in the
table above, and (B) if the Borrower fails to deliver any Compliance
Certificate pursuant to §§6.4(a) or (b) hereof then, for the period commencing
on the date such Compliance Certificate was due through the date immediately
preceding the Adjustment Date that occurs immediately following the date on
which such Compliance Certificate is delivered, the Applicable Margin shall be
the Applicable Margin corresponding to Level V above.

 

Applicable  Pension  Legislation.  At any time, any pension or retirement
benefits legislation (be it national, federal, provincial, territorial or
otherwise) then applicable to the Borrower or any of its Subsidiaries.

 

Applicable  Time. With respect
to any borrowings and payments in any Alternative Currency, the local time in
the place of settlement for such Alternative Currency as may be determined by
the Administrative Agent or the Issuing Bank, as the case may be, to be
necessary for timely settlement on the relevant date in accordance with normal
banking procedures in the place of payment.

 

3

 

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

 

Arranger.  Banc of America Securities LLC, a Delaware
limited liability company.

 

Assignment  and  Acceptance.  See §17.1 hereof.

 

Auto-Extension  Letter  of  Credit. See
§3.2(c) hereof.

 

Balance  Sheet  Date.  January 31, 2004.

 

Bank  of  America. Bank
of America, N.A. a national banking association, in its individual capacity.

 

Base  Rate.  The higher of (a) the annual rate of interest
publicly announced from time to time by Bank of America at its office in
Charlotte, North Carolina, as its “prime rate” and (b) one-half of one percent
(1/2%) per annum above the Federal Funds Effective Rate.  “Federal  Funds  Effective
Rate” shall mean 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 for the Business Day next succeeding
(or, if such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any next succeeding Business Day, the Federal Funds Effective Rate for any such
day shall be the average rate per annum (rounded upward, if necessary, to a
whole multiple of 1/100 of 1%) charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.  Changes in the “prime rate” resulting from
any changes in Bank of America’s “prime rate” shall take place immediately
without notice or demand of any kind.

 

Base  Rate  Loans.  Any Revolving Credit Loans bearing interest
calculated by reference to the Base Rate. All Base Rate Loans shall be
denominated in Dollars.

 

Borrower.  As defined in the preamble hereto.

 

Business  Day.  Any day on which banking institutions in New
York, New York, are open for the transaction of banking business and:

 

(a)           if such day relates to any interest
rate settings as to a Eurocurrency Rate Loan denominated in Dollars, any
fundings, disbursements, settlements and payments in Dollars in respect of any
such Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out
pursuant to this Credit Agreement in respect of any such Eurocurrency Rate
Loan, means any such day on which dealings in deposits in Dollars are conducted
by and between banks in the London interbank eurodollar market;

 

4

 

(b)           if such day relates to any interest
rate settings as to a Eurocurrency Rate Loan denominated in Euro, any fundings,
disbursements, settlements and payments in Euro in respect of any such
Eurocurrency Rate Loan, or any other dealings in Euro to be carried out
pursuant to this Credit Agreement in respect of any such Eurocurrency Rate
Loan, means a TARGET Day;

 

(c)           if such day relates to any interest
rate settings as to a Eurocurrency Rate Loan denominated in a currency other
than Dollars or Euro, means any such day on which dealings in deposits in the
relevant currency are conducted by and between banks in the London or other
applicable offshore interbank market for such currency; and

 

(d)           if such day relates to any fundings,
disbursements, settlements and payments in a currency other than Dollars or
Euro in respect of a Eurocurrency Rate Loan denominated in a currency other
than Dollars or Euro, or any other dealings in any currency other than Dollars
or Euro to be carried out pursuant to this Credit Agreement in respect of any
such Eurocurrency Rate Loan (other than any interest rate settings), means any
such day on which banks are open for foreign exchange business in the principal
financial center of the country of such currency.

 

Canadian
Dollars.  Dollars in lawful
currency of Canada.

 

Capital
Stock. 
With respect to any corporation, partnership, trust, unincorporated
association, joint venture, limited liability company, or other legal or
business entity, any and all shares, interests, participations or other
equivalent (however designated) of capital stock of such entity, any and all
limited or general partnership interests and equivalent ownership interests in
such entity, any and all warrants and options to purchase any of the foregoing,
and any securities convertible into any of the foregoing.

 

Capitalized  Leases.  Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.

 

Cash Collateralize.  See §3.7(c) hereof.

 

CERCLA.  The Comprehensive Environmental Response,
Compensation and Liability Act of 1980.

 

Closing  Date.  The first date on which the conditions set
forth in §9 hereof have been satisfied, which shall be no later than December
31, 2004.

 

Code.  The Internal Revenue Code of 1986.

 

Co-Documentation
Agents. 
As defined in the preamble hereto.

 

Commitment.  The agreement of each Lender, subject to the
terms and conditions of this Credit Agreement, to make Revolving Credit Loans
to, and to participate in Swing

 

5

 

Line Loans and the issuance, extension and renewal of Letters of Credit
for the account of the Borrower.

 

Commitment  Amount.  With respect to each Lender, the amount of
such Lender’s Commitment set forth on Schedule  1 attached hereto,
as the same may be reduced from time to time in accordance with the terms of
this Credit Agreement; or if the Total Commitment is terminated pursuant to the
provisions hereof, zero.

 

Commitment  Percentage.  With respect to each Lender, the percentage
set forth on Schedule  1 attached hereto as such Lender’s
percentage of the Total Commitment.

 

Competitive
Bid  Loan(s).  A borrowing hereunder consisting of one or
more revolving credit loans made by any of the Lenders whose offer to make a
revolving credit loan as part of such borrowing has been accepted by the
Borrower under the auction bidding procedure described in §2.3 hereof.
Competitive Bid Loans may only be denominated in Dollars.

 

Competitive
Bid  Quote.  An offer by a Lender to make a Competitive
Bid Loan in accordance with §2.3 hereof.

 

Competitive
Bid  Quote
Request. 
See §2.3.1(b) hereof.

 

Competitive
Bid  Rate.  With respect to any Competitive Bid Quote,
the Margin or Absolute Rate, as applicable, offered by the Lender making such
Competitive Bid Quote.

 

Competitive
Bid  Sublimit.  $200,000,000.

 

Compliance  Certificate.  See §6.4(a) hereof.

 

Confidential
Information.  All information relating to the Borrower or
any of its Subsidiaries that is labeled by the Borrower or such Subsidiary as
confidential at the time such information is supplied by the Borrower or such
Subsidiary to a Lender, other than information which (a) is public knowledge or
generally available to the public, or (b) is obtained by any of the Lenders,
whether prior to or after disclosure to such Lender by the Borrower or any of
its Subsidiaries, from a source other than the Borrower or any of its
Subsidiaries, provided that such information is not known by such Lender to
have been disclosed by any party in violation of a confidentiality agreement
with the Borrower or any of its Subsidiaries, any other obligation of
nondisclosure with respect to the Borrower or any of its Subsidiaries or any
applicable statutory or regulatory limitation imposed on the disclosure of such
information.

 

Consolidated  or  consolidated.  With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with GAAP.

 

Consolidated
Adjusted  Funded  Debt.  With respect to the Borrower and its
Subsidiaries, as at any date of determination, on a consolidated basis, the
aggregate of (a)

 

6

 

Consolidated Total Funded Debt as of such date plus (b) (i)
Rental Expense for the period of twelve consecutive months then ended multiplied
by (ii) eight (8).

 

Consolidated
EBIT. 
For any period, consolidated net income (or deficit) of the Borrower and
its Subsidiaries, after deducting all expenses and other proper charges other
than interest expense, taxes and any noncash nonrecurring charges, and
excluding, without duplication, (a) all extraordinary and nonrecurring items of
(i) income or (ii) cash losses in an aggregate amount not to exceed
$100,000,000 on a cumulative basis from the Closing Date, as determined in
accordance with GAAP and (b) all income or loss from any corporation,
partnership, limited liability company, joint venture or other entity in which
the Borrower or any of its Subsidiaries holds not more than a fifty percent
(50%) ownership interest, as determined in accordance with GAAP; provided
that there shall be further excluded in calculating consolidated net income (or
deficit) for purposes of this definition, without duplication, any noncash
losses attributable to the use of a fair value methodology for recognition and
measurement of impairment of goodwill not identified with impaired assets in
accordance with Accounting Principles Board Opinion No. 142.

 

Consolidated
EBT. 
For any period, consolidated net income (or deficit) of the Borrower and
its Subsidiaries, after deducting all expenses and other proper charges other
than taxes and any noncash nonrecurring charges, and excluding, without
duplication, (a) all extraordinary and nonrecurring items of (i) income or (ii)
cash losses in an aggregate amount not to exceed $100,000,000 on a cumulative
basis from the Closing Date, as determined in accordance with GAAP and (b) all
income or loss from any corporation, partnership, limited liability company,
joint venture or other entity in which the Borrower or any of its Subsidiaries
holds not more than a fifty percent (50%) ownership interest, as determined in
accordance with GAAP; provided that (i) there shall be further excluded
in calculating consolidated net income (or deficit) for purposes of this
definition, without duplication, any noncash losses attributable to the use of
a fair value methodology for recognition and measurement of impairment of
goodwill not identified with impaired assets in accordance with Accounting
Principles Board Opinion No. 142 and (ii) for purposes of calculating the
Obligor Group Requirement, the Persons included in the calculation of
Consolidated EBT shall be as set forth in the definition of Obligor Group
Requirement.

 

Consolidated  Total  Assets.  All assets of the Borrower and its Subsidiaries
determined on a consolidated basis in accordance with GAAP; provided
that for purposes of calculating the Obligor Group Requirement, the Persons
included in the calculation of Consolidated Total Assets shall be as set forth
in the definition of the Obligor Group Requirement.

 

Consolidated  Total  Funded  Debt.  With respect to the Borrower and its
Subsidiaries, as at any date of determination, on a consolidated basis, the
aggregate (without duplication) of (a) all outstanding Indebtedness of the Borrower
and its Subsidiaries relating to or in respect of (i) the borrowing of money or
the obtaining of credit, including the issuance of notes or bonds and standby
letters of credit outstanding but excluding documentary letters of credit, (ii)
the deferred purchase price of assets

 

7

 

(other than trade payables incurred in the ordinary course of
business), (iii) any Synthetic Leases or any Capitalized Leases, and (iv) the
transactions permitted under §7.1(q) hereof, plus (b) all Indebtedness
of the type referred to in clause (a) of another Person guaranteed by the
Borrower or any of its Subsidiaries.

 

Consolidated  Total  Interest
Expense.  For any period, the
aggregate amount of interest required to be paid or accrued by the Borrower and
its Subsidiaries during such period on all Indebtedness of the Borrower and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or capitalized,
including payments consisting of interest in respect of Capitalized Leases and
Synthetic Leases, and including facility fees, commitment fees, usage fees,
agency fees, balance deficiency fees, and similar fees or expenses in
connection with the borrowing of money, as determined in accordance with GAAP.

 

Contingent
Liabilities.  Any guaranties, endorsements, obligations to
reimburse the issuer in respect of any letters of credit, agreements to
purchase or provide funds for the payment of obligations of others, or other
liabilities which would be classified as contingent in accordance with GAAP
consistently applied, excluding, however, (a) product warranties given in the
ordinary course of business, (b) endorsements of checks or other negotiable instruments
for deposit or collection in the ordinary course of business, and (c)
reimbursement obligations in respect of documentary trade letters of credit.

 

Conversion  Request.  A notice given by the Borrower to the
Administrative Agent of the Borrower’s election to convert or continue a
Syndicated Loan in accordance with §2.9 hereof.

 

Credit  Agreement.  This Revolving Credit Agreement, including
the Schedules and Exhibits hereto.

 

Default.  See §11.1 hereof.

 

Delinquent  Lender.  See §13.5.3 hereof.

 

Distribution.  The declaration or payment of any dividend on
or in respect of any shares of any class of Capital Stock of the Borrower,
other than dividends payable solely in shares of common stock of the Borrower;
the purchase, redemption, or other retirement of any shares of any class of
Capital Stock of the Borrower, directly or indirectly through a Subsidiary of
the Borrower or otherwise; the return of capital by the Borrower to its
shareholders as such; or any other distribution on or in respect of any shares
of any class of Capital Stock of the Borrower.

 

Dollars or $.  Dollars in lawful currency of the United
States of America.

 

Dollar  Equivalent. At any
time, (a) with respect to any amount denominated in Dollars, such amount,
and (b) with respect to any amount denominated in any Alternative
Currency, the equivalent amount thereof in Dollars as determined by the
Administrative

 

8

 

Agent or the Issuing Bank, as the case may be, at such time on the
basis of the Spot Rate (determined in respect of the most recent Revaluation
Date) for the purchase of Dollars with such Alternative Currency.

 

Domestic
Subsidiary. 
Any Subsidiary that is organized under the laws of the United States of
America, any state or territory thereof or the District of Columbia.

 

Drawdown  Date.  The date on which any Syndicated Loan is made
or is to be made, and the date on which any Syndicated Loan is converted or
continued in accordance with §2.9 hereof.

 

Eligible  Assignee.  Any of (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 the Issuing Bank, and (ii)
unless an Event of Default has occurred and is continuing, the Borrower (each
such approval not to be unreasonably withheld or delayed, and in the case of
(ii), it being understood that it shall be reasonable for the Borrower to
withhold such approval if the proposed Person does not have an investment grade
rating).

 

Employee  Benefit  Plan.  Any employee benefit plan within the meaning
of §3(3) of ERISA maintained or contributed to by the Borrower, other than a
Guaranteed Pension Plan or a Multiemployer Plan.

 

EMU.
The economic and monetary union in accordance with the Treaty of Rome 1957, as
amended by the Single European Act of 1986, the Maastricht Treaty of 1992 and
the Amsterdam Treaty of 1998.

 

EMU  Legislation. The
legislative measures of the European Council for the introduction of,
changeover to or operation of a single or unified European currency.

 

Environmental  Laws.  Any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery Act (“RCRA”), CERCLA, the Superfund Amendments and
Reauthorization Act of 1986 (“SARA”), the
Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act, or any state or local statute, regulation, ordinance, order or
decree relating to health, safety or the environment.

 

Environmental
Notice. 
Any notice to the Borrower or any of its Subsidiaries from any third
party including, without limitation: any federal, state or local governmental
authority, (a) that it has been identified by the United States Environmental
Protection Agency as a potentially responsible party under CERCLA with respect
to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix
B; (b) that any Hazardous Substances which it has generated, transported or
disposed of has been found at any site at which a federal, state or local
agency or other third party has conducted or has ordered that the Borrower or
any of its Subsidiaries conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (c) that it is or shall
be a

 

9

 

named party to any claim, action, cause of action, complaint, or legal
or administrative proceeding in connection with the release of Hazardous
Substances.

 

ERISA.  The Employee Retirement Income Security Act
of 1974.

 

ERISA  Affiliate.  Any Person which is treated as a single
employer with the Borrower under §414 of the Code.

 

ERISA  Reportable  Event.  A reportable event with respect to a
Guaranteed Pension Plan within the meaning of §4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice has
not been waived.

 

Euro and EUR. The lawful
currency of the Participating Member States introduced in accordance with the
EMU Legislation.

 

Eurocurrency  Rate  Competitive
Bid  Loan.  A Competitive
Bid Loan bearing interest at a Eurocurrency Rate.

 

Eurocurrency
Rate. For any Interest Period with respect to a Eurocurrency Rate Loan,
the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent
from time to time) at approximately 11:00 a.m., London time, two (2) Business
Days prior to the commencement of such Interest Period, for deposits in the
relevant currency (for delivery on the first day of such Interest Period) with
a term equivalent to such Interest Period. 
If such rate is not available at such time for any reason, then the “Eurocurrency
Rate” for such Interest Period shall be the rate per annum determined by the
Administrative Agent to be the rate at which deposits in the relevant currency
for delivery on the first day of such Interest Period in Same Day Funds in the
approximate amount of the Eurocurrency 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 (or other Bank of America
branch or Affiliate) to major banks in the London or other offshore interbank
market for such currency at their request at approximately 11:00 a.m. (London
time) two (2) Business Days prior to the commencement of such Interest Period.

 

Eurocurrency  Rate  Loans.  Any Syndicated Loans bearing interest
calculated by reference to the Eurocurrency Rate. Eurocurrency Rate Loans
(excluding Eurocurrency Rate Competitive Bid Loans) may be denominated in
Dollars or in an Alternative Currency. 
All Loans denominated in an Alternative Currency must be Eurocurrency
Rate Loans.

 

Event  of  Default.  See §11.1 hereof.

 

Existing
Credit  Agreement.  That certain Revolving Credit Agreement dated
as of June 21, 2002, as amended, by and among the Borrower, the lending
institutions party thereto and Fleet National Bank as administrative agent for
such lending institutions.

 

10

 

Existing  Letters  of  Credit.  See §3.9 hereof.

 

Facility
Fee.  See §4.2.1 hereof.

 

Fee  Letter. 
See §4.1 hereof.

 

Financial  Affiliate.  A Subsidiary of the bank holding company
controlling any Lender, which Subsidiary is engaging in any of the activities
permitted by §4(e) of the Bank Holding Company Act of 1956 (12 U.S.C. §1843).

 

Fixed  Charge  Coverage
Ratio. 
See §8.1 hereof.

 

Fixed  Rate  Loan.  A Swing Line Loan bearing interest at a fixed
rate determined in accordance with clause (b) of the definition of “Money
Market Rate” contained in this §1.1. Fixed Rate Loans may only be denominated
in Dollars.

 

Fleet.  Fleet
National Bank, a national banking association, in its individual capacity.

 

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

 

GAAP  or  generally
accepted  accounting
principles. 
(a) When used in §§7 and 8 hereof and in the calculation of the Obligor
Group Requirement, whether directly or indirectly through reference to a
capitalized term used therein, means (i) principles that are consistent with
the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors, in effect for the fiscal year ended on the Balance
Sheet Date, and (ii) to the extent consistent with such principles, the
accounting practice of the Borrower reflected in its financial statements for
the year ended on the Balance Sheet Date, and (b) when used in general, other
than as provided above, means principles that are (i) consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, as in effect from time to time, and (ii) consistently
applied with past financial statements of the Borrower adopting the same
principles, provided that in each case referred to in this definition of GAAP a
certified public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an unqualified opinion
(other than a qualification regarding changes in GAAP) as to financial statements
in which such principles have been properly applied.

 

Guaranteed  Pension  Plan.  Any employee pension benefit plan within the
meaning of §3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.

 

Guaranties.  The Guaranty by each Guarantor in favor of
the Administrative Agent for the benefit of the Lenders and the Administrative
Agent, dated as of the date

 

11

 

hereof, and each additional guaranty executed by a Subsidiary of the
Borrower acquired or formed after the date hereof.

 

Guarantors.  Those Subsidiaries of the Borrower listed on Schedule  2
attached hereto, as such schedule may be modified from time to time in
accordance with §4.14 hereof.

 

Hazardous  Substances.  Any hazardous waste, as defined by 42 U.S.C.
§6903(5), any hazardous substances as defined by 42 U.S.C. §9601(14), any pollutant
or contaminant as defined by 42 U.S.C. §9601(33) and any toxic substances, oil
or hazardous materials or other chemicals or substances regulated by any
Environmental Laws.

 

Honor  Date. See §3.3(a)
hereof.

 

Indebtedness.  All obligations, contingent and otherwise,
that in accordance with GAAP should be classified upon the obligor’s balance
sheet as liabilities, or to which reference should be made by footnotes
thereto, including in any event and whether or not so classified: (a) all debt
and similar monetary obligations, whether direct or indirect; (b) all
liabilities secured by any mortgage, pledge, security interest, lien, charge or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; (c) all
obligations in respect of interest rate protection arrangements and exchange
rate protection arrangements; (d) all guarantees, endorsements and other
contingent obligations whether direct or indirect in respect of indebtedness of
others, including any obligation to supply funds to or in any manner to invest
in, directly or indirectly, the debtor, to purchase indebtedness, or to assure
the owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit; and (e) every
obligation of such Person under any Synthetic Lease.

 

Interest  Payment  Date.  (a) As to any Base Rate Loan, the last day of
the calendar quarter which includes the Drawdown Date thereof; (b) as to any
Eurocurrency Rate Loan in respect of which the Interest Period is (i) 3 months
or less, the last day of such Interest Period and (ii) more than 3 months, the
date that is 3 months from the first day of such Interest Period, the last day
of each 3 month period thereafter, and, in addition, the last day of such
Interest Period; (c) as to any Competitive Bid Loan, on the last day of the
Interest Period applicable thereto; and (d) with respect to any Swing Line
Loan, the day that such Swing Line Loan is required to be repaid.

 

Interest  Period.  With respect to each Loan (a) initially, the
period commencing on the Drawdown Date of such Loan and ending on the last day
of one of the periods set forth below, as selected by the Borrower in a Loan
Request (i) for any Base Rate Loan, the last day of the calendar quarter; (ii)
for any Eurocurrency Rate Loan, 1, 2, 3 or 6 months; (iii) for any Absolute
Rate Competitive Bid Loan, from 14 through 180 days;

 

12

 

(iv) for any Eurocurrency Rate Competitive Bid Loan, 1, 2, 3, or 6
months; and (v) for any Fixed Rate Loan, the period requested by the Borrower
and agreed to by the Administrative Agent (but not exceeding ten (10) days)
pursuant to §2.10.3 hereof and (b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to such Loan and
ending on the last day of one of the periods set forth above, as selected by
the Borrower in a Conversion Request; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:

 

(a)           if any Interest Period with respect
to a Eurocurrency Rate Loan would otherwise end on a day that is not a Business
Day, that Interest Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day;

 

(b)           if any Interest Period with respect
to a Base Rate Loan would end on a day that is not a Business Day, that
Interest Period shall end on the next succeeding Business Day;

 

(c)           if the Borrower shall fail to give
notice as provided in §2.9 hereof, the Borrower shall be deemed to have
requested a conversion of the affected Eurocurrency Rate Loan to a Base Rate
Loan and the continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;

 

(d)           any Interest Period relating to any
Eurocurrency 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 a calendar month;

 

(e)           any Interest Period relating to any
Revolving Credit Loan that would otherwise extend beyond the Maturity Date
shall end on the Maturity Date; and

 

(f)        if
the Borrower shall fail to give notice to the Administrative Agent of its
intention to continue a Fixed Rate Loan as provided in §2.10.3, the Borrower
shall be deemed to have requested a conversion of the affected Fixed Rate Loan
to a Swing Line Loan which is not a Fixed Rate Loan on the last day of the then
current Interest Period with respect thereto.

 

Investments.  All expenditures made and all liabilities
incurred (contingently or otherwise) for the acquisition of stock or
Indebtedness of, or for loans, advances, capital contributions or transfers of
property to, or in respect of any guaranties (or other commitments as described
under Indebtedness), or obligations of, any Person.  In determining the aggregate amount of
Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase,

 

13

 

redemption, retirement, repayment, liquidating dividend or liquidating
distribution); (d) there shall not be deducted in respect of any Investment any
amounts received as earnings on such Investment, whether as dividends, interest
or otherwise, except that accrued interest included as provided in the
foregoing clause (b) may be deducted when paid; and (e) there shall not be
deducted from the aggregate amount of Investments any decrease in the value
thereof.

 

Invitation  for  Competitive
Bid  Quotes.  See §2.3.1(c)
hereof.

 

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

 

Issuing
Bank. 
(a) Bank of America or such other lender as may be selected by the
Borrower, with the consent of the Administrative Agent (such consent not to be
unreasonably withheld), to issue Letters of Credit hereunder and (b) solely in
connection with the Existing Letters of Credit, Fleet and HSBC Bank USA,
National Association. An Issuing Bank may arrange, with the consent of the
Borrower, for one or more Letters of Credit to be issued by Affiliates of such
Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.  Nothing herein shall be deemed to restrict
the right of an Issuing Bank to issue letters of credit outside of this Credit
Agreement.

 

Joinder
Agreements. 
Joinder agreements in substantially the form of Exhibit  I hereto pursuant to
which Subsidiaries of the Borrower become parties to and agree to be bound by
the provisions of the Guaranty as a Guarantor.

 

Judgment  Currency.  See §27 hereof.

 

Lender  Affiliate. 
With respect to any Lender, (a) an Affiliate of such Lender or (b) any
Approved Fund.

 

Lenders.  As defined in the preamble hereto, which term
shall include any other Person who becomes an assignee of any rights and
obligations of a Lender pursuant to §17 hereof. Unless the context otherwise
requires, the term “Lenders” includes the Issuing Bank and the Administrative
Agent in its capacity as lender of the Swing Line Loans.

 

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

 

Letter(s)
of  Credit.  Standby and documentary letters of credit
issued by the Issuing Bank from time to time for the account of the Borrower
hereunder. Letters of Credit may be issued in Dollars or in an Alternative
Currency.

 

14

 

Letter  of  Credit  Application
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 Issuing Bank.

 

Letter  of  Credit  Fee. 
See §3.10 hereof.

 

Letter  of  Credit  Sublimit. 
The lesser of $375,000,000 and the Total Commitment.

 

Loan  Documents.  This Credit Agreement, the Guaranties, the
Fee Letter and any other documents delivered pursuant to this Credit Agreement.

 

Loan  Request.  See §2.2 hereof.

 

Loans.  Revolving Credit Loans made or to be made by
the Lenders to the Borrower pursuant to §2 hereof, whether Syndicated Loans or
Competitive Bid Loans, and Swing Line Loans.

 

Mandatory  Cost. With respect
to any period, the percentage rate per annum determined in accordance with Schedule
3.

 

Margin.  With respect to any Competitive Bid Loan
bearing interest at a rate based on the Eurocurrency Rate, the marginal rate of
interest, if any, to be added to the Eurocurrency Rate to determine the rate of
interest applicable to such Competitive Bid Loan, as specified by the Lender
making such Competitive Bid Loan in its related Competitive Bid Quote.

 

Margin  Regulations.  See §5.13 hereof.

 

Maturity
Date. 
December 14, 2009.

 

Maximum
Drawing  Amount.  On the date as of which the maximum drawing
amount is to be determined, the Dollar Equivalent of the aggregate maximum
amount which the beneficiaries may draw from time to time under Letters of
Credit issued for the account of the Borrower pursuant to §3.1 hereof. For all
purposes of this Agreement, if on any date of determination a Letter of Credit
has expired by its terms but any amount may still be drawn thereunder by reason
of the operation of Rule 3.14 of the ISP, the Maximum Drawing Amount of such
Letter of Credit shall be the aggregate maximum amount so remaining available
to be drawn.

 

Measurement
Period. 
See §8.1 hereof.

 

Money  Market  Rate.  With respect to any Swing Line Loan, the
lesser of (a) the Base Rate and (b) such other rate per annum as is quoted by
the Administrative Agent from time to time for Swing Line Loans.

 

Moody’s.  Moody’s Investors Service, Inc.

 

Multiemployer  Plan.  Any multiemployer plan within the meaning of
§3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.

 

15

 

Non-Extension  Notice  Date. See
§3.2(c) hereof.

 

Notes.  Notes issued pursuant to §2.11.

 

Notice  of  Competitive
Bid  Borrowing.  See §2.3.1(f) hereof.

 

Obligations.  All indebtedness, obligations and liabilities
of any of the Borrower and its Subsidiaries to any of the Lenders and the
Administrative Agent, individually or collectively, existing on the date of
this Credit Agreement or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Credit Agreement or any of the other Loan
Documents or in respect of any of the Loans made or Reimbursement Obligations
incurred, or any of the Letter of Credit Applications, Letters of Credit or
other instruments at any time evidencing any thereof.

 

Obligor  Group.  Collectively, the Borrower and the Guarantors
(including any Subsidiary of the Borrower which as of any date of determination
has become a Guarantor pursuant to the provisions of this Credit Agreement).

 

Obligor  Group  Requirement.  The requirement that, as of any date of
determination, Consolidated EBT of the Obligor Group for the Measurement Period
most recently ended shall not be less than $355,000,000.

 

Outstanding
or outstanding.  With respect to
the Loans, the Dollar Equivalent of the aggregate unpaid principal thereof as
of any date of determination.

 

Overnight  Rate. For any day,
(a) with respect to any amount denominated in Dollars, the greater of (i) the
Federal Funds Effective Rate and (ii) an overnight rate determined by the
Administrative Agent or the Issuing Bank, as the case may be, in accordance
with banking industry rules on interbank compensation, and (b) with respect to
any amount denominated in an Alternative Currency, the rate of interest per
annum at which overnight deposits in the applicable Alternative Currency, in an
amount approximately equal to the amount with respect to which such rate is
being determined, would be offered for such day by a branch or Affiliate of
Bank of America in the applicable offshore interbank market for such currency
to major banks in such interbank market.

 

Participant.  See §17.4 hereof.

 

Participating  Member  State.
Each state so described in any EMU Legislation.

 

PBGC.  The Pension Benefit Guaranty Corporation
created by §4002 of ERISA and any successor entity or entities having similar
responsibilities.

 

Permitted  Liens.  Liens, security interests and other
encumbrances permitted under §7.2 hereof.

 

16

 

Person.  Any individual, corporation, limited
liability company, partnership, limited liability partnership, trust,
unincorporated association, business, or other legal entity, and any government
or any governmental agency or political subdivision thereof.

 

Rate  Adjustment  Period.  See definition of Applicable Margin.

 

Real  Estate.  All real property at any time owned or leased
(as lessee or sublessee) by the Borrower or any of its Subsidiaries.

 

Reimbursement
Obligation. 
The Borrower’s obligation to reimburse the Issuing Bank on account of
any drawing under any Letter of Credit.

 

Rental  Expense.  All obligations of
the Borrower or any of its Subsidiaries under any rental agreements or leases
of real property relating to retail stores, other than obligations in respect
of Capitalized Leases and Synthetic Leases.

 

Replacement  Lender.  See §4.12 hereof.

 

Required  Lenders.  As of any date, the Lenders holding more than
fifty percent (50%) of the sum of the outstanding principal amount of the
Syndicated Loans on such date plus the aggregate amount of risk participation
with respect to the Maximum Drawing Amount plus the Unpaid Reimbursement
Obligations on such date and the participation with respect to the outstanding
principal amount of Swing Line Loans on such date (excluding any participations
of a Delinquent Lender); and if no such principal and/or participation is
outstanding, the Lenders whose aggregate Commitment Amounts constitute more
than fifty percent (50%) of the Total Commitment.

 

Revaluation  Date.  With respect to any Syndicated Loan, each of
the following: (i) each date of a borrowing of a Eurocurrency Rate Loan
denominated in an Alternative Currency, (ii) each date of a continuation of a
Eurocurrency Rate Loan denominated in an Alternative Currency pursuant to
§2.9.2 hereof, and (iii) such additional dates as the Administrative Agent
shall determine or the Required Lenders or the Borrower shall require.

 

Revolver
Period. 
The period beginning on the Closing Date to and including the day
immediately preceding the Maturity Date.

 

Revolving
Credit  Loans.  Collectively, the Syndicated Loans and the
Competitive Bid Loans.

 

Same
Day  Funds. (a) With respect to disbursements and payments in
Dollars, immediately available funds, and (b) with respect to disbursements and
payments in an Alternative Currency, same day or other funds as may be
determined by the Administrative Agent or the Issuing Bank, as the case may be,
to be customary in the place of disbursement or payment for the settlement of
international banking transactions in the relevant Alternative Currency.

 

17

 

S&P.  Standard & Poor’s Ratings Group, a
division of McGraw-Hill, Inc.

 

Senior  Debt  Rating.  The rating issued by S&P or Moody’s with
respect to unsecured Indebtedness of the Borrower not maturing within twelve
months, issued without third-party credit enhancement, and not subordinated by
its term in right of payment to other Indebtedness of the Borrower.  In the event that no such ratings are available
on such unsecured Indebtedness of the Borrower, the Senior Debt Rating shall be
the rating implied, in the reasonable discretion of the Administrative Agent,
to such unsecured Indebtedness by reference to such other Indebtedness of the
Borrower as shall be so rated.

 

Senior  Debt  Rating
Threshold.  “BBB” assigned by
S&P and “Baa2” assigned by Moody’s, in each case, with a stable outlook.

 

Special
Notice  Currency. At any time, an Alternative Currency, other than
the currency of a country that (a) is a member of the Organization for Economic
Cooperation and Development and (b) is located in North America or Europe at
such time.

 

Spot  Rate. For a currency
means the rate determined by the Administrative Agent or the Issuing Bank, as
applicable, to be the rate quoted by the Person acting in such capacity as the
spot rate for the purchase by such Person of such currency with another
currency through its principal foreign exchange trading office at approximately
11:00 a.m. (New York time) on the date two (2) Business Days prior to the date
as of which the foreign exchange computation is made; provided  that the Administrative Agent or the Issuing Bank may
obtain such spot rate from another financial institution designated by the
Administrative Agent or the Issuing Bank if the Person acting in such capacity
does not have as of the date of determination a spot buying rate for any such
currency; and provided  further that the Issuing Bank may use such
spot rate quoted on the date as of which the foreign exchange computation is
made in the case of any Letter of Credit denominated in an Alternative
Currency.

 

Sterling and “£. The lawful
currency of the United Kingdom.

 

Stockholders’
Equity. 
As at any date of determination, the sum of (a) the capital accounts
including common stock and preferred stock, but excluding treasury stock of the
Borrower plus (b) the earned surplus and capital surplus of the Borrower
(excluding adjustments to translate foreign assets and liabilities for changes
in foreign exchange rates made in accordance with Financial Accounting
Standards Board Statement No. 52), as determined in accordance with GAAP.

 

Subordinated
Debt. 
Unsecured Indebtedness of the Borrower or any of its Subsidiaries that
is expressly subordinated and made junior to the payment and performance of the
Obligations, and evidenced as such by a written instrument containing
subordination provisions in form and substance approved by the Required Lenders
in writing.

 

18

 

Subsidiary.  Any corporation, association, trust, or other
business entity of which the designated parent shall at any time own directly
or indirectly through a Subsidiary or Subsidiaries at least a majority (by
number of votes) of the outstanding Voting Stock and the accounts of which are
consolidated with such designated parent in accordance with GAAP.

 

Substituted
Lender. 
See §4.12 hereof.

 

Swing  Line  Loan  Maturity  Date.  With respect to any Swing Line Loan, the date
specified by the Borrower in the Swing Line Loan Request relating thereto as
the maturity date of such Swing Line Loan, which in no event shall be later
than the earlier to occur of (a) ten (10) days after the Drawdown Date of such
Swing Line Loan and (b) the Maturity Date.

 

Swing  Line  Loan  Request. 
See §2.10.1 hereof.

 

Swing  Line  Loans.  See §2.10.1 hereof.

 

Swing  Line  Sublimit.  $60,000,000.

 

Syndicated
Loan(s). 
One or more revolving credit loans funded by the Lenders in accordance
with their respective Commitment Percentages.

 

Syndication
Agent. 
As defined in the preamble hereto.

 

Synthetic  Lease.  Any lease of goods or other property, whether
real or personal, which is treated as an operating lease under GAAP and as a
loan or financing for U.S. income tax purposes.

 

TARGET
Day. Any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) payment system (or, if such payment system
ceases to be operative, such other payment system (if any) determined by
the Administrative Agent to be a suitable replacement) is open for the
settlement of payments in Euro.

 

Total  Commitment.  The sum of the Commitment Amounts of the
Lenders, as in effect from time to time. 
The Total Commitment as of the Closing Date is $750,000,000.

 

Type.  As to any Syndicated Loan, its nature as a
Base Rate Loan or a Eurocurrency Rate Loan and as to any Competitive Bid Loan,
its nature as an Absolute Rate Competitive Bid Loan or a Eurocurrency
Competitive Bid Loan.

 

Unpaid  Reimbursement  Obligation.  The Dollar Equivalent of any Reimbursement
Obligation for which the Borrower has not reimbursed the Issuing Bank.

 

Unreimbursed  Amount. See
§3.3(a) hereof.

 

Utilization
Fee. 
See §4.2.2 hereof.

 

19

 

Voting  Stock.  Stock or similar interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association, trust or
other business entity involved, whether or not the right so to vote exists by
reason of the happening of a contingency.

 

§1.2.       Rules of Interpretation

 

(a)           A reference to any document or
agreement shall include such document or agreement as amended, modified or
supplemented from time to time in accordance with its terms and the terms of
this Credit Agreement.

 

(b)           The singular includes the plural and
the plural includes the singular.

 

(c)           A reference to any law includes any
amendment or modification to such law.

 

(d)           A reference to any Person includes
its permitted successors and permitted assigns.

 

(e)           Accounting terms not otherwise
defined herein have the meanings assigned to them by generally accepted
accounting principles applied on a consistent basis by the accounting entity to
which they refer.

 

(f)            The words “include”, “includes” and “including” are not limiting.

 

(g)           All terms not specifically defined
herein or by GAAP, which terms are defined in the Uniform Commercial Code as in
effect in the Commonwealth of Massachusetts, have the meanings assigned to them
therein, with the term “instrument” being that defined under Article 9 of the
Uniform Commercial Code.

 

(h)           Reference to a particular “§” refers
to that section of this Credit Agreement unless otherwise indicated.

 

(i)            The words “herein”, “hereof”, “hereunder” and words of like import shall
refer to this Credit Agreement as a whole and not to any particular section or
subdivision of this Credit Agreement.

 

(j)            Unless otherwise expressly
indicated, 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.”

 

(k)           This Credit Agreement and the other
Loan Documents may use several different limitations, tests or measurements to
regulate the same or similar

 

20

 

matters.  All such limitations,
tests and measurements are, however, additive and are to be performed in
accordance with the terms thereof.

 

(l)            This Credit Agreement and the other
Loan Documents are the result of negotiation among, and have been reviewed by
counsel to, among others, the Administrative Agent and the Borrower and are the
product of discussions and negotiations among all parties.  Accordingly, this Credit Agreement and the
other Loan Documents are not intended to be construed against the
Administrative Agent or any of the Lenders merely on account of the
Administrative Agent’s or any Lender’s involvement in the preparation of such
documents.

 

§1.3.       Exchange Rates;
Currency Equivalents.

 

(a)           The
Administrative Agent or the Issuing Bank, as applicable, shall determine the
Spot Rates as of each Revaluation Date to be used for calculating Dollar
Equivalent amounts of Loans, Maximum Drawing Amounts and Reimbursement
Obligations denominated in Alternative Currencies.  Such Spot Rates shall become effective as of
such Revaluation Date and shall be the Spot Rates employed in converting any
amounts between the applicable currencies until the next Revaluation Date to
occur.  Except for purposes of financial
statements delivered by the Borrower hereunder or calculating financial
covenants hereunder or except as otherwise provided herein, the applicable
amount of any currency (other than Dollars) for purposes of the Loan Documents
shall be such Dollar Equivalent amount as so determined by the Administrative
Agent or the Issuing Bank, as applicable.

 

(b)           Wherever
in this Credit Agreement in connection with a making, conversion, continuation
or prepayment of a Eurocurrency Rate Loan or the issuance, amendment or
extension of a Letter of Credit, an amount, such as a required minimum or
multiple amount, is expressed in Dollars, but, such Eurocurrency Rate Loan or
Letter of Credit is denominated in an Alternative Currency, such minimum or
maximum amount shall be the relevant Alternative Currency Equivalent of such
Dollar amount (rounded to the nearest unit of such Alternative Currency, with
0.5 of a unit being rounded upward), as determined by the Administrative Agent
or the Issuing Bank, as the case may be.

 

§1.4.       Additional Alternative Currencies.

 

(a)           The
Borrower may from time to time request that Eurocurrency Rate Loans (excluding
Eurocurrency Rate Competitive Bid Loans) be made or Letters of Credit issued in
a currency other than those specifically listed in the definition of “Alternative
Currency;” provided that such requested currency is a lawful currency
(other than Dollars) that is readily available and freely transferable and
convertible into Dollars.  In the case of
any such request with respect to the making of Eurocurrency Rate Loans, such
request shall be subject to the approval of the Administrative Agent and the
Lenders; and in the case of any such request with respect to the issuance of
Letters of Credit, such request shall be subject to the approval of the
Administrative Agent and the Issuing Bank.

 

21

 

(b)           Any
such request shall be made to the Administrative Agent not later than 11:00
a.m. (New York time), twenty (20) Business Days prior to the date of the
desired Loan or issuance of Letter of Credit (or such other time or date as may
be agreed by the Administrative Agent and, in the case of any such request
pertaining to Letters of Credit, the Issuing Bank, in its or their sole
discretion). In the case of any such request pertaining to Eurocurrency Rate
Loans, the Administrative Agent shall promptly notify each Lender thereof; and
in the case of any such request pertaining to Letters of Credit, the
Administrative Agent shall promptly notify the Issuing Bank thereof.  Each Lender (in the case of a request
pertaining to Eurocurrency Rate Loans) or the Issuing Bank (in the case of a
request pertaining to Letters of Credit) shall notify the Administrative Agent,
not later than 11:00 a.m. (New York time), ten (10) Business Days after receipt
of such request whether it consents, in its sole discretion, to the making of
Eurocurrency Rate Loans or the issuance of Letters of Credit, as the case may
be, in such requested currency.

 

(c)           Any
failure by a Lender or the Issuing Bank, as the case may be, to respond to such
request within the time period specified in the preceding sentence shall be
deemed to be a refusal by such Lender or the Issuing Bank, as the case may be,
to permit Eurocurrency Rate Loans to be made or Letters of Credit to be issued
in such requested currency.  If the
Administrative Agent and all the Lenders consent to making Eurocurrency Rate Loans
in such requested currency, the Administrative Agent shall so notify the
Borrower and such currency shall thereupon be deemed for all purposes to be an
Alternative Currency hereunder for purposes of any Eurocurrency Rate Loans; and
if the Administrative Agent and the Issuing Bank consent to the issuance of
Letters of Credit in such requested currency, the Administrative Agent shall so
notify the Borrower and such currency shall thereupon be deemed for all
purposes to be an Alternative Currency hereunder for purposes of any Letter of
Credit issuances. If the Administrative Agent shall fail to obtain consent to
any request for an additional currency under this §1.4, the Administrative
Agent shall promptly so notify the Borrower.

 

§1.5.       Change of Currency.

 

(a)           Each
obligation of the Borrower to make a payment denominated in the national
currency unit of any member state of the European Union that adopts the Euro as
its lawful currency after the date hereof shall be redenominated into Euro at
the time of such adoption (in accordance with the EMU Legislation).  If, in relation to the currency of any such
member state, the basis of accrual of interest expressed in this Credit
Agreement in respect of that currency shall be inconsistent with any convention
or practice in the London interbank market for the basis of accrual of interest
in respect of the Euro, such expressed basis shall be replaced by such
convention or practice with effect from the date on which such member state
adopts the Euro as its lawful currency; provided that if any
Eurocurrency Rate Loan in the currency of such member state is outstanding
immediately prior to such date, such replacement shall take effect, with
respect to such Eurocurrency Rate Loan, at the end of the then current Interest
Period.

 

22

 

(b)           Each
provision of this Credit Agreement shall be subject to such reasonable changes
of construction as the Administrative Agent may from time to time specify to be
appropriate to reflect the adoption of the Euro by any member state of the
European Union and any relevant market conventions or practices relating to the
Euro.

 

(c)           Each
provision of this Credit Agreement also shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to time
specify to be appropriate to reflect a change in currency of any other country
and any relevant market conventions or practices relating to the change in
currency.

 

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

 

§2.          THE
REVOLVING CREDIT FACILITY.

 

§2.1.       Commitment to Lend
Syndicated Loans.  Subject to the terms and conditions set forth
in this Credit Agreement, each of the Lenders severally agrees from time to
time during the Revolver Period to make Syndicated Loans to the Borrower in
Dollars or in one or more Alternative Currencies and in such amounts as are
requested by the Borrower, provided, that the sum of the aggregate principal
amount of Syndicated Loans made by each Lender (after giving effect to all
amounts requested) shall not at any time exceed such Lender’s Commitment Amount
(without regard to any Competitive Bid Loans of such Lender outstanding at such
time), and provided, further, that (a) at
no time shall the sum of, without duplication, (i) the Dollar Equivalent of the
outstanding Syndicated Loans, plus (ii) the outstanding Swing Line Loans, plus
(iii) the Maximum Drawing Amount, plus (iv) all Unpaid Reimbursement
Obligations, plus (v) the outstanding Competitive Bid Loans exceed the Total
Commitment, (b) at no time shall the sum of, without duplication, (i) the
Dollar Equivalent of the aggregate outstanding Loans denominated in Alternative
Currencies plus (ii) the Maximum Drawing Amount of all Letters of Credit
denominated in Alternative Currencies plus (iii) all Unpaid Reimbursement
Obligations with respect to Letters of Credit denominated in Alternative Currencies
exceed the Alternative Currency Sublimit and (c) subject to §2.4.1 and §13.5.3,
at all times the Dollar Equivalent of the outstanding aggregate principal
amount of all Syndicated Loans made by each Lender shall equal such Lender’s
Commitment Percentage of the outstanding Syndicated Loans made by all Lenders
pursuant to the terms of this Credit Agreement. 
Subject to the terms and conditions set forth in this Credit Agreement,
the Borrower may borrow, repay and reborrow Syndicated Loans from time to time during
the Revolver Period upon notice by the Borrower to the Administrative Agent
given in accordance with §2.2 hereof. 
Each request for a

 

23

 

Syndicated Loan hereunder shall constitute a representation and
warranty by the Borrower that the conditions set forth in §§9 and 10 hereof, in
the case of the initial Syndicated Loans to be made on the Closing Date, and
§10 hereof, in the case of all other Syndicated Loans, shall have been
satisfied on the date of such request.

 

§2.2.       Requests for Syndicated
Loans.  The Borrower shall give to the Administrative
Agent written notice in the form of Exhibit A attached hereto (or telephonic
notice confirmed in a writing in the form of Exhibit A attached hereto) of each
Syndicated Loan requested hereunder (a “Loan  Request”) not later
than (a) 12:00 noon (New York time) on the proposed Drawdown Date of any Base
Rate Loan, (b) 12:00 noon (New York time) three (3) Business Days prior to the
proposed Drawdown Date of any Eurocurrency Rate Loan that is denominated in
Dollars and (c) 12:00 noon (New York time) four (4) Business Days (or five (5)
Business Days in the case of a Special Notice Currency) prior to the proposed
Drawdown Date of any Eurocurrency Rate Loan that is denominated in Alternative
Currencies.  Each such notice shall
specify (i) the principal amount of the Syndicated Loan requested, (ii) the
proposed Drawdown Date of such Syndicated Loan, (iii) the Interest Period for
such Syndicated Loan, (iv) the Type of such Syndicated Loan and (v) the
currency of such Syndicated Loan. If the Borrower fails to specify a currency
in a Loan Request, then the Loan so requested shall be made in Dollars.  Promptly upon receipt of any such notice, the
Administrative Agent shall notify each of the Lenders thereof. Each Loan
Request shall be irrevocable and binding on the Borrower and shall obligate the
Borrower to accept the Syndicated Loan requested from the Lenders on the
proposed Drawdown Date.  Each Loan
Request shall be (A) in a minimum aggregate amount of $1,000,000 or an integral
multiple thereof with respect to Base Rate Loans and (B) in a minimum aggregate
amount of $5,000,000 or an integral multiple of $l,000,000 with respect to
Eurocurrency Rate Loans.

 

§2.3.       Competitive Bid Loans.

 

§2.3.1.    Competitive
Bid Borrowings.

 

(a)           The  Competitive
Bid  Option.   In
addition to the Syndicated Loans permitted to be made hereunder pursuant to
§2.1 hereof, the Borrower may, from time to time during the Revolver Period
pursuant to the terms of this §2.3, cause the Administrative Agent to request
the Lenders to make offers to fund Competitive Bid Loans to the Borrower from
time to time prior to the Maturity Date. 
The Lenders may, but shall have no obligation to, make such offers and
the Borrower may, but shall have no obligation to, accept such offers in the
manner set forth in this §2.3.  Each
Lender may make Competitive Bid Loans in an aggregate amount (after giving
effect to all amounts requested) not to exceed the lesser of (i) the Total Commitment
and (ii) the Competitive Bid Sublimit, provided that, at no time shall the sum
of (A) the Dollar Equivalent of the aggregate amount of all outstanding
Syndicated Loans, plus (B) the aggregate amount of all outstanding Swing Line
Loans, plus (C) the Maximum Drawing Amount, plus (D) all Unpaid Reimbursement
Obligations, plus (E) the aggregate outstanding amount of Competitive Bid Loans
exceed the Total Commitment.

 

24

 

(b)           Competitive
Bid  Quote
Request. 
When the Borrower wishes to request offers to make Competitive Bid Loans
under this §2.3, it shall transmit to the Administrative Agent a Competitive
Bid Quote Request substantially in the form of Exhibit B attached hereto (a “Competitive
Bid  Quote  Request”) so as to be received, in the case of a
request for a Eurocurrency Rate Competitive Bid Loan, no later than 1:00 p.m.
(New York time) on the fourth Business Day prior to the requested Drawdown Date
and, in the case of a request for an Absolute Rate Competitive Bid Loan, no
later than 1:00 p.m. (New York time) on the second Business Day prior to the
requested Drawdown Date, specifying (i) the requested Drawdown Date (which must
be a Business Day), (ii) the principal amount of such Competitive Bid Loan (which
must be a minimum of $10,000,000 or any greater integral multiple of $5,000,000
and may not exceed the lesser of (A) the Total Commitment and (B) the
Competitive Bid Sublimit), (iii) the Type of such Competitive Bid Loan and (iv)
the Interest Period of such Competitive Bid Loan, subject to the provisions of
the definition of Interest Period.  A
Competitive Bid fee of $750 shall be payable by the Borrower to the
Administrative Agent with respect to each Competitive Bid Quote Request on the
last day of the calendar quarter in which such Competitive Bid Quote Request
was made.  The Borrower may request
offers to make Competitive Bid Loans for one amount and Type and three Interest
Periods in a single Competitive Bid Quote Request. No new Competitive Bid Quote
Request shall be given until the Borrower has notified the Administrative Agent
of its acceptance or non-acceptance of the Competitive Bid Quotes relating to
any outstanding Competitive Bid Quote Request.

 

(c)           Invitation
for  Competitive
Bid  Quotes;
Alternative  Manner
of  Auction.  Subsequent to timely receipt of a Competitive
Bid Quote Request, the Administrative Agent shall deliver to the Lenders an
Invitation for Competitive Bid Quotes substantially in the form of Exhibit C
attached hereto (an “Invitation  for  Competitive  Bid
Quotes”), as promptly as possible but not later than, in the case of a
Eurocurrency Rate Competitive Bid Loan, 3:00 p.m. (New York time) four (4)
Business Days prior to the proposed Drawdown Date, and in the case of an
Absolute Rate Competitive Bid Loan, 3:00 p.m. (New York time), on the second
Business Day prior to the requested Drawdown Date, which shall constitute an
invitation by the Borrower to each Lender to submit Competitive Bid Quotes
offering to make Competitive Bid Loans to which such Competitive Bid Quote
Request relates in accordance with this §2.3. 
If, after receipt by the Administrative Agent of a Competitive Bid Quote
Request from the Borrower in accordance with subsection (b) of this §2.3.1, the
Administrative Agent or any Lender shall be unable to complete any procedure of
the auction process described in subsections (c) through (f) (inclusive) of
this §2.3.1 due to the inability of such Person to transmit or receive
communications through the means specified therein, such Person may rely on
telephonic notice for the transmission or receipt of such communications.  In any case where such Person shall rely on
telephone transmission or receipt, any communication made by telephone shall,
as soon as possible thereafter, be followed by written confirmation thereof.

 

(d)           Submission and Contents of
Competitive Bid Quotes.

 

25

 

(i)            Each
Lender may, but shall be under no obligation to, submit a Competitive Bid Quote
containing an offer or offers to make Competitive Bid Loans in response to any
Invitation for Competitive Bid Quotes. 
Each Competitive Bid Quote must comply with the requirements of this
subsection (d) and must be submitted to the Administrative Agent not later
than, in the case of a Eurocurrency Rate Competitive Bid Loan, 10:00 a.m. (New
York time) three (3) Business Days prior to the proposed Drawdown Date and in
the case of an Absolute Rate Competitive Bid Loan, 10:00 a.m. (New York time)
on the requested Drawdown Date, provided, that Competitive Bid Quotes may be
made by the Administrative Agent in its capacity as a Lender only if it
notifies the Borrower of the terms of its Competitive Bid Quote no later than
9:30 a.m. (New York time) on the requested Drawdown Date.  Subject to the provisions of §§9 and 10
hereof, any Competitive Bid Quote so made shall be irrevocable except with the
written consent of the Administrative Agent given on the instructions of the
Borrower.

 

(ii)           Each
Competitive Bid Quote shall be in substantially the form of Exhibit D-1
attached hereto and shall in any case specify:

 

(A)          the
requested Drawdown Date and Interest Periods;

 

(B)           the
principal amount of the Competitive Bid Loan for which each such offer is being
made, which principal amount (x) may be greater than the Commitment Amount of
the quoting Lender but may not exceed the lesser of (I) the Total Commitment
and (II) the Competitive Bid Sublimit, (y) must be in Dollars and in the amount
of $10,000,000 or a larger multiple of $5,000,000 and (z) may not exceed the
aggregate principal amount of Competitive Bid Loans for which offers were
requested,

 

(C)           the
Competitive Bid Rate per annum rate of interest (rounded to the nearest
1/1000th of 1%) offered for each such Competitive Bid Loan; and

 

(D)          the
identity of the quoting Lender.

 

(iii)          Any
Competitive Bid Quote shall be disregarded if it:

 

(A)          is
not substantially in the form of Exhibit D-1 attached hereto or does not
specify all of the information required by subsection (d)(ii) of this §2.3.1;

 

(B)           contains
qualifying, conditional or similar language (except that it may, in the case of
a quote relating to more than one Interest Period, contain the condition that
the Lender will fund any one, but not more, of the Competitive Bid Loans offered
in such Competitive Bid Quote);

 

(C)           proposes
terms other than or in addition to those set forth in the applicable Invitation
for Competitive Bid Quotes; or

 

26

 

(E)           arrives
after the time set forth in subsection (d)(i) of this §2.3.1.

 

(e)           Notice
to  Borrower.  Not later than 10:30 a.m. (New York time) on
the requested Drawdown Date, the Administrative Agent shall notify the Borrower
of the terms of all Competitive Bid Quotes submitted by the Lenders in accordance
with subsection (d) of this §2.3.1.  The
Administrative Agent’s notice to the Borrower shall specify (i) the aggregate
principal amount of Competitive Bid Loans for which offers have been received
for each Interest Period specified in the related Competitive Bid Quote
Request, and (ii) the respective principal amounts and Competitive Bid Rates so
offered.

 

(f)            Acceptance
and  Notice
by  Borrower.  Not later than, in the case of Eurocurrency
Rate Competitive Bid Loans, 11:00 a.m. (New York time) three (3) Business Days
prior to the proposed Drawdown Date and, in the case of Absolute Competitive
Bid Loans, 11:00 a.m. (New York time) on the requested Drawdown Date, the
Borrower shall notify the Administrative Agent, and the Administrative Agent
shall promptly notify each Lender with respect to its offer, of the Borrower’s
acceptance or non-acceptance of the offers of which it was notified pursuant to
subsection (e) of this §2.3.1.  In the
case of an acceptance, such notice shall (i) be substantially in the form of
Exhibit D-2 attached hereto (a “Notice  of  Competitive  Bid
Borrowing”), (ii) be irrevocable by the Borrower, and (iii) specify the
aggregate principal amount of offers for each Interest Period that are
accepted.  Each acceptance by the
Borrower of Competitive Bid Loans hereunder shall constitute a representation
and warranty by the Borrower that the conditions set forth in §§9 and 10 hereof
have been satisfied on the date of such acceptance.  The Borrower may accept any Competitive Bid
Quote in whole or in part; provided that:

 

(i)            the
aggregate principal amount of each Competitive Bid Loan may not exceed the
applicable amount set forth in the related Competitive Bid Quote Request,

 

(ii)           the
aggregate principal amount of each Competitive Bid Loan must be $10,000,000 or
a larger multiple of $5,000,000, and

 

(iii)          acceptance
of offers may only be made on the basis of ascending Competitive Bid Rates.

 

(g)           Allocation
by  Administrative
Agent;  Usage
of  Commitments.  If offers are made by two or more Lenders with
the same Competitive Bid Rates, for a greater aggregate principal amount than
the amount in respect of which offers are accepted for the related Interest
Period, the principal amount of Competitive Bid Loans in respect of which such
offers are accepted shall be allocated by the Administrative Agent among such
Lenders as nearly as possible (in such multiples, not less than $100,000 as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. 
Determination by the Administrative Agent of the amounts of

 

27

 

Competitive Bid Loans and the allocation thereof shall be conclusive in
the absence of manifest error.  The
Administrative Agent shall, promptly after the funding of any Competitive Bid
Loan, notify the Lenders thereof pursuant to a notice substantially in the form
of Exhibit  D-3
attached hereto.

 

(h)           Funding
of  Competitive
Bid  Loans.  If, on or prior to the Drawdown Date of any
Competitive Bid Loan, the Total Commitment has not terminated in full and if,
on such Drawdown Date, the applicable conditions of §§9 and 10 hereof are
satisfied, the Lender or Lenders whose offers the Borrower has accepted will
fund each Competitive Bid Loan so accepted as provided in §2.4.1 hereof.

 

§2.3.2.    Maximum
Competitive Bid Loans; Funding Losses.  (a) Notwithstanding any other provision
herein to the contrary, at no time shall the aggregate principal amount of
Competitive Bid Loans outstanding at any time exceed the lesser of (i) the
Total Commitment minus the sum of (A) the Dollar Equivalent of the aggregate
principal amount of Syndicated Loans outstanding at such time plus (B) the
aggregate principal amount of Swing Line Loans outstanding at such time plus
(C) the Maximum Drawing Amount plus (D) all Unpaid Reimbursement Obligations
and (ii) the Competitive Bid Sublimit.

 

(a)           If after acceptance of any
Competitive Bid Quote pursuant to §2.3.1(f) hereof, the Borrower fails to
borrow any Competitive Bid Loan so accepted on the date specified therefor, the
Borrower shall indemnify the Lender funding such Competitive Bid Loan against
any loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such
unborrowed Competitive Bid Loans, including, without limitation, compensation
as provided in §4.10 hereof.

 

§2.3.3.    Repayment
of Competitive Bid Loans. 
The principal of each Competitive Bid Loan shall become absolutely due
and payable by the Borrower on the last day of the Interest Period relating
thereto, and the Borrower hereby absolutely and unconditionally promises to pay
to the Administrative Agent, for the accounts of the relevant Lenders, on the
last day of the Interest Period relating thereto the principal amount of all
such Competitive Bid Loans plus interest thereon at the applicable Competitive
Bid Rate.  Subject to the terms of this
Credit Agreement, the Borrower may reborrow any amounts so repaid from time to
time prior to the Maturity Date.

 

§2.4.       Funds for Revolving
Credit Loans.

 

§2.4.1.    Funding
Procedures.  Each of the relevant Lenders will make
available to the Administrative Agent, at the Administrative Agent’s Head
Office, in Same Day Funds, the amount of such Lender’s Commitment Percentage of
the amount of the requested Syndicated Loans or the amount of such Lender’s
Competitive Bid Loan, as applicable, not later than 1:30 p.m. (New York time)
on the proposed Drawdown Date of any Syndicated Loans or Competitive Bid Loans
denominated in Dollars and not later than the Applicable Time specified by the
Administrative Agent in the case of any

 

28

 

Syndicated Loans denominated in an Alternative Currency.  Upon receipt from each Lender of such amount,
and upon receipt of the documents required by §§9 and 10 hereof and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Administrative Agent will make available to the Borrower the
aggregate amount of such Revolving Credit Loans made available to the
Administrative Agent by the relevant Lenders. 
The failure or refusal of any Lender to make available to the
Administrative Agent its Commitment Percentage of the requested Syndicated
Loans or (in the case of Lenders whose offers to make a Competitive Bid Loan
have been accepted) the amount of such Lender’s Competitive Bid Loan, as
applicable, on any Drawdown Date shall not excuse any other Lender from making
available to the Administrative Agent the amount of such other Lender’s
Commitment Percentage of any requested Syndicated Loans or the amount of such
other Lender’s offered Competitive Bid Loan accepted by the Borrower.

 

§2.4.2.    Advances
by Administrative Agent.

 

(a)           The
Administrative Agent may, unless notified to the contrary by any Lender prior
to a Drawdown Date, assume that such Lender has made available to the
Administrative Agent on such Drawdown Date the amount of such Lender’s
Commitment Percentage of the Syndicated Loans (or, in the case of Competitive
Bid Loans, the amount of such Lender’s accepted offers of Competitive Bid
Loans, if any) to be made on such Drawdown Date, and the Administrative Agent
may (but it shall not be required to), in reliance upon such assumption, make
available to the Borrower a corresponding amount.  If any Lender makes available to the
Administrative Agent such amount on a date after such Drawdown Date, such
Lender shall pay to the Administrative Agent on demand an amount equal to the
product of (a) the average computed for the period referred to in clause (c)
below, of the Overnight Rate for each day included in such period, times (b)
the amount of such Lender’s Commitment Percentage of such Syndicated Loans (or
accepted offers of Competitive Bid Loans, as applicable), times (c) a fraction,
the numerator of which is the number of days that elapse from and including
such Drawdown Date to the date on which the amount of such Lender’s Syndicated
Loans or Competitive Bid Loans, as applicable, shall become immediately
available to the Administrative Agent, and the denominator of which is
360.  A statement of the Administrative
Agent submitted to such Lender with respect to any amounts owing under this
§2.4.2 shall be prima facie evidence of the amount due and owing to the
Administrative Agent by such Lender.  If
the amount of such Lender’s Syndicated Loans or Competitive Bid Loans, as
applicable, is not made available to the Administrative Agent by such Lender
within three (3) Business Days following such Drawdown Date, the Administrative
Agent shall be entitled to recover such amount from the Borrower on demand,
with interest thereon at the rate per annum applicable to the Syndicated Loans
or Competitive Bid Loans, as applicable, made on such Drawdown Date and the
Borrower may take the actions permitted under §4.12 hereof to replace such
Lender.  Any payment by the Borrower to
the Administrative Agent of any Syndicated Loans or Competitive Bid Loans
pursuant to this §2.4.2 shall be deemed to be a payment of the Revolving Credit
Loans that were to be made by the Lender that failed to make such Syndicated
Loans or Competitive Bid Loans, as applicable.

 

29

 

(b)           Unless the Borrower 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 will not make such
payment, the Administrative Agent may assume that the Borrower has timely made
such payment and may (but shall not be so required to), in reliance thereon,
make available a corresponding amount to such Lender.  If and to the extent that such payment was
not in fact made to the Administrative Agent by the Borrower in Same Day Funds,
then 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
Same Day 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
Same Day Funds at the Overnight Rate from time to time in effect.

 

(c)           A
notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under §§2.4.2(a) and (b) shall be conclusive, absent
manifest error.

 

§2.5.       Reduction of Total Commitment.  The Borrower shall have the right at any time
and from time to time prior to the Maturity Date upon three (3) Business Days’
prior written notice to the Administrative Agent to reduce by $5,000,000 or an
integral multiple thereof or terminate entirely the Total Commitment, whereupon
the Commitment Amount of each Lender shall be reduced pro rata in accordance
with its Commitment Percentage by the amount specified in such notice or, as
the case may be, terminated.  Promptly
after receiving any notice of the Borrower delivered pursuant to this §2.5, the
Administrative Agent will notify the Lenders of the substance thereof.  Upon the effective date of any such reduction
or termination, the Borrower shall pay to the Administrative Agent for the
respective accounts of the Lenders the full amount of the Facility Fee then
accrued on the amount of the reduction. 
No reduction or termination of the Total Commitment may be reinstated.

 

§2.6.       Maturity and Other Mandatory Repayments of
Revolving Credit Loans.

 

(a)           The
Borrower promises to pay on the Maturity Date, and there shall become
absolutely due and payable on the Maturity Date, all of the Revolving Credit
Loans outstanding to the Borrower on such date, together with any and all
accrued and unpaid interest thereon.

 

(b)           If
at any time the Administrative Agent notifies the Borrower that the sum,
without duplication, of (i) the Dollar Equivalent of the outstanding aggregate
principal amount of the Revolving Credit Loans plus (ii) the outstanding
aggregate principal amount of Swing Line Loans plus (iii) the Maximum Drawing
Amount plus (iv) all Unpaid Reimbursement Obligations is equal to or exceeds an
amount equal to 102% of the Total Commitment, then the Borrower shall, within
two (2) Business Days after receipt of such notice, pay to the Administrative
Agent an amount sufficient to reduce the sum of clauses (i)-(iv) as of such
date of payment to an amount not to exceed 100% of the

 

30

 

Total Commitment then in effect, such payment to be applied to the
Revolving Credit Loans or Unpaid Reimbursement Obligations for the respective
accounts of the Lenders.

 

(c)           If
at any time the Administrative Agent notifies the Borrower that the sum,
without duplication, of (i) the Dollar Equivalent of the outstanding aggregate
principal amount of the Revolving Credit Loans plus (ii) the outstanding
aggregate principal amount of Swing Line Loans plus (iii) the Maximum Drawing
Amount plus (iv) all Unpaid Reimbursement Obligations exceeds an amount equal
to 100% of the Total Commitment, but is less than 102%, then the Borrower
shall, within five (5) Business Days after receipt of such notice, pay to the
Administrative Agent an amount sufficient to reduce the sum of clauses (i)-(iv)
as of such date of payment to an amount not to exceed 100% of the Total
Commitment then in effect, such payment to be applied to the Revolving Credit
Loans or Unpaid Reimbursement Obligations for the respective accounts of the
Lenders.

 

(d)           If
at any time the Administrative Agent notifies the Borrower that the sum,
without duplication, of (i) the Dollar Equivalent of the outstanding aggregate
principal amount of the Syndicated Loans denominated in Alternative Currencies
plus (ii) the Maximum Drawing Amount of all Letters of Credit denominated in
Alternative Currencies plus (iii) all Unpaid Reimbursement Obligations with
respect to Letters of Credit denominated in Alternative Currencies exceeds an
amount equal to 102% of the Alternative Currency Sublimit, then the Borrower
shall, within two (2) Business Days after receipt of such notice, pay to the
Administrative Agent an amount sufficient to reduce the sum of clauses
(i)-(iii) as of such date of payment to an amount not to exceed 100% of the
Alternative Currency Sublimit then in effect, such payment to be applied to
such Syndicated Loans or Unpaid Reimbursement Obligations for the respective
accounts of the Lenders.

 

(e)           If
at any time the Administrative Agent notifies the Borrower that the sum,
without duplication, of (i) the Dollar Equivalent of the outstanding aggregate
principal amount of the Syndicated Loans denominated in Alternative Currencies
plus (ii) the Maximum Drawing Amount of all Letters of Credit denominated in
Alternative Currencies plus (iii) all Unpaid Reimbursement Obligations with
respect to Letters of Credit denominated in Alternative Currencies exceeds an
amount equal to 100% of the Alternative Currency Sublimit, but is less than
102%, then the Borrower shall, within five (5) Business Days after receipt of
such notice, pay to the Administrative Agent an amount sufficient to reduce the
sum of clauses (i)-(iii) as of such date of payment to an amount not to exceed
100% of the Alternative Currency Sublimit then in effect, such payment to be
applied to such Syndicated Loans or Unpaid Reimbursement Obligations for the
respective accounts of the Lenders.

 

(f)            So
long as no Event of Default has occurred and is continuing, each prepayment of
Revolving Credit Loans shall be allocated among the Lenders, in proportion, as
nearly as practicable to the respective unpaid principal amount of the
Syndicated Loans made by each Lender, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion, and if no

 

31

 

Syndicated Loans are outstanding, to the Competitive Bid Loans, in
proportion, as nearly as practicable, to the unpaid principal amount of the
Competitive Bid Loans made by each Lender.

 

§2.7.       Optional
Repayments of Revolving Credit Loans.  The Borrower shall have the right, at its
election, to repay the outstanding amount of the Revolving Credit Loans, as a
whole or in part, at any time without penalty or premium, provided that any
full or partial repayment of the outstanding amount of any Eurocurrency Rate
Loans or Competitive Bid Loan pursuant to this §2.7 may be made only on the
last day of the Interest Period relating thereto unless the Borrower pays each
Lender, or, in the case of a Competitive Bid Loan, the applicable Lender, in
accordance with §4.10, the costs and expenses incurred by such Lender as a
result of the repayment of such Eurocurrency Rate Loan or, as the case may be,
Competitive Bid Loan on a day other than the last day of the Interest Period
relating thereto.  The Borrower shall
give the Administrative Agent, prior written notice no later than 1:00 p.m.,
(New York time), on the date of any proposed repayment pursuant to this §2.7 of
Base Rate Loans, no later than 1:00 p.m., (New York time), three (3) Business
Days’ prior to any proposed repayment pursuant to this §2.7 of Eurocurrency
Rate Loans denominated in Dollars and Competitive Bid Loans, and no later than
1:00 p.m., (New York time), four (4) Business Days’ (or five (5), in the case
of prepayment of Eurocurrency Rate Loans denominated in Special Notice
Currencies) prior to any proposed repayment pursuant to this §2.7 of
Eurocurrency Rate Loans denominated in an Alternative Currency, in each case
specifying the proposed date of repayment of such Revolving Credit Loans and,
the principal amount to be repaid.  Each
such partial repayment of the Revolving Credit Loans shall be in an integral
multiple of $5,000,000 and shall be applied, in the case of Syndicated Loans,
in the absence of instruction by the Borrower, first to the principal of Base
Rate Loans and then to the principal of Eurocurrency Rate Loans and, in the
case of a Competitive Bid Loan, to such Competitive Bid Loan.  Each partial repayment of Syndicated Loans
shall be allocated among the Lenders, in proportion, as nearly as practicable,
to the respective unpaid principal amount of the Syndicated Loans made by each
Lender being repaid, with adjustments to the extent practicable to equalize any
prior repayments not exactly in proportion.

 

§2.8.       Interest on
Revolving Credit Loans.  (a) During the Revolver Period, except as
otherwise provided in §4.11 hereof,

 

(i)            each
Base Rate Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period with respect
thereto at the rate per annum equal to the Base Rate;

 

(ii)           each
Eurocurrency Rate Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period with respect
thereto at the rate per annum equal to the Eurocurrency Rate determined for
such Interest Period plus the Applicable Margin plus (in the case of a
Eurocurrency Rate Loan of any Lender which is denominated in an Alternative

 

32

 

Currency and is lent from
a Lending Office in the United Kingdom or a Participating Member State) the
Mandatory Cost; and

 

(iii)          each
Competitive Bid Loan shall bear interest at the rate per annum specified in the
applicable Competitive Bid Quote with respect to such Competitive Bid Loan.

 

(b)           The Borrower promises to pay interest
on each Revolving Credit Loan in arrears on each Interest Payment Date applicable
with respect thereto.

 

§2.9.       Conversion Options.

 

§2.9.1.    Conversion
to Different Type of Syndicated Loan.  The Borrower may elect from time to time to
convert any outstanding Syndicated Loan to a Syndicated Loan of another Type,
provided that (a) with respect to any such conversion of a Eurocurrency Rate
Loan denominated in Dollars to a Base Rate Loan, the Borrower shall give the
Administrative Agent at least one (1)  Business Day’s
prior written notice of such election; (b) with respect to any such conversion
of a Eurocurrency Rate Loan denominated in an Alternative Currency to a Base
Rate Loan, the Borrower shall give the Administrative Agent at least four (4)
Business Day’s (or five (5) Business Days in the case of a Special Notice
Currency) prior written notice of such election; (c) with respect to any such
conversion of a Base Rate Loan to a Eurocurrency Rate Loan denominated in
Dollars, the Borrower shall give the Administrative Agent at least three (3)
Business Days’ prior written notice of such election; (d) with respect to any
such conversion of a Base Rate Loan to a Eurocurrency Rate Loan denominated in
an Alternative Currency, the Borrower shall give the Administrative Agent at
least four (4) Business Days’ (or five (5) Business Days in the case of a
Special Notice Currency) prior written notice of such election; (e) with
respect to any such conversion of a Eurocurrency Rate Loan into a Base Rate
Loan, such conversion shall only be made on the last day of the Interest Period
with respect thereto; and (f) no Base Rate Loan may be converted into a
Eurocurrency Rate Loan when any Default or Event of Default has occurred and is
continuing, and during the continuance of any Default or Event of Default, the
Required Lenders may demand that any or all of the then outstanding
Eurocurrency Rate Loans denominated in an Alternative Currency be prepaid, or
redenominated into Dollars in the amount of the Dollar Equivalent thereof, on
the last day of the then current Interest Period with respect thereto.  On the date on which such conversion is being
made each Lender shall take such action as is necessary to transfer its
Commitment Percentage of such Syndicated Loans to its Lending Office for
domestic loans or its Lending Office for Eurocurrency Rate Loans, as the case
may be.  All or any part of outstanding
Syndicated Loans of any Type may be converted into a Syndicated Loan of another
Type as provided herein, provided that any partial conversion shall be in an
aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in
excess thereof.  Each Conversion Request
relating to the conversion of a Syndicated Loan to a Eurocurrency Rate Loan
shall be irrevocable by the Borrower. Notwithstanding the foregoing, no Loan
may be converted into a Loan denominated in a different currency, but instead
must be prepaid in the original currency of such Loan and reborrowed in the
other currency.

 

33

 

§2.9.2.    Continuation
of Type of Syndicated Loan. 
Any Syndicated Loan of any Type may be continued as a Syndicated Loan of
the same Type upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in §2.9.1
hereof; provided that no Eurocurrency Rate Loan may be continued as such when
any Default or Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto ending during the continuance of any Default
or Event of Default of which officers of the Administrative Agent active upon
the Borrower’s account have actual knowledge. 
In the event that the Borrower fails to provide any such notice with
respect to continuation of a Eurocurrency Rate Loan as such, than such
Eurocurrency Rate shall be automatically converted to a Base Rate Loan on the
last day of the Interest Period relating thereto; provided, however,
that in the case of a failure to timely request a continuation of a
Eurocurrency Rate Loan denominated in an Alternative Currency, such Loans shall
be continued as Eurocurrency Rate Loans in their original currency with an
Interest Period of one month.   The
Administrative Agent shall notify the Lenders and the Borrower promptly when
any such automatic conversion contemplated by this §2.9.2 is scheduled to
occur.

 

§2.9.3.    Eurocurrency
Rate Loans.  Any conversion to or from Eurocurrency Rate
Loans shall be in such amounts and be made pursuant to such elections so that,
after giving effect thereto, the aggregate principal amount of all Eurocurrency
Rate Loans having the same Interest Period shall not be less than $5,000,000 or
a whole multiple of $1,000,000 in excess thereof.  No more than six (6) Eurocurrency Rate Loans
having different Interest Periods may be outstanding at any time.

 

§2.10.     The Swing Line

 

§2.10.1. The Swing Line Loans.  Subject to the terms and conditions hereinafter set forth,
upon notice by the Borrower to the Administrative Agent in accordance with this
§2.10, the Administrative Agent agrees, in reliance upon the agreements of the
other Lenders set forth in this §2.10, to make loans in Dollars to the Borrower
(the “Swing  Line  Loans”) on any Business Day prior to the
Maturity Date in an aggregate principal amount not to exceed the Swing Line
Sublimit at any one time outstanding. 
Each Swing Line Loan shall be in a minimum amount equal to $1,000,000 or
an integral multiple thereof. 
Notwithstanding any other provisions of this Credit Agreement and in
addition to the limit set forth above, at no time shall the aggregate principal
amount of all outstanding Swing Line Loans exceed the remainder of (a) the
Total Commitment then in effect minus (b) the sum of, without duplication, (i)
the Dollar Equivalent of the aggregate principal amount of all Syndicated Loans
outstanding, plus (ii) the aggregate amount of Competitive Bid Loans
outstanding at such time, plus (iii) the Maximum Drawing Amount, plus (iv) all
Unpaid Reimbursement Obligations.

 

§2.10.2. Notice of
Borrowing.  When the Borrower desires the Administrative
Agent to make a Swing Line Loan, it shall send to the Administrative Agent
written notice in the form of Exhibit  H hereto (or telephonic notice confirmed in a

 

34

 

writing in the form of Exhibit  H hereto) of each Swing Line Loan requested
hereunder (a “Swing  Line  Loan  Request”) not later
than 2:00 p.m. (New York time) on the proposed Drawdown Date of any Swing Line
Loan.  Each such Swing Line Loan Request
shall set forth the principal amount of the proposed Swing Line Loan and the
Swing Line Loan Maturity Date relating to such Swing Line Loan, which shall in
no event be later than Maturity Date. 
Each Swing Line Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to borrow the Swing Line Loan from the
Administrative Agent on the proposed Drawdown Date thereof.  Upon satisfaction of the applicable
conditions set forth in this Credit Agreement, on the proposed Drawdown Date
the Administrative Agent shall make the Swing Line Loan available to the
Borrower no later than 3:00 p.m. (New York time) on the proposed Drawdown Date
by crediting the amount of the Swing Line Loan to the account specified by the
Borrower; provided that the Administrative
Agent shall not advance any Swing Line Loans after it has received notice from
any Lender that a Default or Event of Default has occurred and stating that no
new Swing Line Loans are to be made until such Default or Event of Default has
been cured or waived in accordance with the provisions of this Credit
Agreement.

 

§2.10.3. Interest on
Swing Line Loans.  Each Swing Line Loan shall, except as
otherwise provided in §4.11 hereof, bear interest from the Drawdown Date
thereof until repaid in full at the rate per annum equal to the Money Market
Rate, which shall be paid on each Interest Payment Date for Base Rate
Loans.  The Borrower may elect from time
to time that a Swing Line Loan bear interest at a fixed rate for a period of
one week or such other period of time as may be agreed to by the Administrative
Agent (not to exceed ten (10) days), in which case, the interest rate on such
Swing Line Loan shall be the fixed rate of interest quoted by the
Administrative Agent for such Swing Line Loan for such Interest Period in
accordance with clause (b) of the definition of “Money Market Rate” contained
in §1.1 hereof.  The Borrower shall give
the Administrative Agent notice no later than 12:00 noon (New York time) on the
last day of the Interest Period relating to a Swing Line Loan that is a Fixed
Rate Loan of its intention to continue such Swing Line Loan as a Fixed Rate
Loan; provided that, the aggregate Interest Period for any Swing Line
Loan that is a Fixed Rate Loan may not exceed one week or such other period of
time as may be agreed to by the Administrative Agent and shall not extend
beyond the Swing Line Loan Maturity Date of such Swing Line Loan.  In the event that the Borrower fails to give
such notice, such Swing Line Loan shall, on the last day of such Interest Period,
cease to be a Fixed Rate Loan.

 

§2.10.4. Repayment
of Swing Line Loans.  The Borrower absolutely and unconditionally
promises to pay each outstanding Swing Line Loan on or prior to the Swing Line
Loan Maturity Date relating thereto. 
Upon notice by the Administrative Agent on any Business Day following
the Swing Line Loan Maturity Date relating to each Swing Line Loan, in the
event that the Borrower has not repaid such Swing Line Loan, each of the
Lenders hereby agrees to make Syndicated Loans to the Borrower constituting
Base Rate Loans, on the next succeeding Business Day following such notice, in
an amount equal to such Lender’s Commitment Percentage of the aggregate amount
of all Swing Line Loans outstanding and overdue.  The proceeds thereof shall be applied
directly by the Administrative Agent to repay outstanding Swing Line Loans.

 

35

 

Each Lender hereby absolutely, unconditionally and irrevocably agrees
to make such Syndicated Loans upon one Business Day’s notice as set forth
above, notwithstanding (a) that the amount of such Syndicated Loan may not
comply with the applicable minimums set forth herein, (b) the failure of the
Borrower to meet the applicable conditions set forth herein, (c) the occurrence
or continuance of a Default or an Event of Default hereunder, and (d) the Total
Commitment in effect at such time.  In
the event that it is impracticable for such Syndicated Loan to be made for any
reason on the date otherwise required above, then each Lender hereby agrees
that it shall forthwith purchase (as of the date such Syndicated Loan would
have been made, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) from the Administrative Agent, and
the Administrative Agent shall sell to each Lender, such participations in the
Swing Line Loans (including all accrued and unpaid interest thereon)
outstanding as shall be necessary to cause the Lender’s to share in such Swing
Line Loans pro  rata based on their respective Commitment Percentages (without
regard to any termination of the Total Commitment hereunder) by making
available to the Administrative Agent an amount equal to such Lender’s
participation in the Swing Line Loans; provided
that (i) all interest payable on the Swing Line Loans (other than interest
received by the Administrative Agent pursuant to clause (ii)) shall be for the
account of the Administrative Agent as a funding and administrative fee until
the date as of which the respective participation is purchased, and (ii) at the
time any purchase of such participation is actually made, the purchasing Lender
shall be required to pay the Administrative Agent interest on the principal
amount of the participation so purchased for each day from and including the
date such Loan would otherwise have been made until the date of payment for
such participation at the rate of interest then applicable to such Swing Line
Loans during such period.  The Borrower
shall have the right, at its election, to repay the outstanding amount of a
Swing Line Loan, as a whole or in part, at any time without penalty or premium;
provided that any full or partial repayment of the outstanding amount of
any Swing Line Loan that is a Fixed Rate Loan may be made only on the last day
of the Interest Period relating thereto unless the Borrower pays, in accordance
with §4.10, to the Administrative Agent the costs and expenses incurred by the
Administrative Agent as a result of the repayment of such Swing Line Loan on a
day other than the last day of such Interest Period relating thereto.

 

§2.11.     Evidence of Debt.

 

(a)           The Loans made by each Lender and the
Letters of Credit issued or extended 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 Loans
made and the Letters of Credit issued or extended by the Lenders to the
Borrower and the interest and payments thereon. 
Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Obligations. 
In the event of any conflict between the accounts and records maintained
by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of the

 

36

 

Administrative Agent shall control in the absence of manifest
error.  Upon the request of any Lender
made through the Administrative Agent, the Borrower shall execute and deliver
to such Lender (through the Administrative Agent) a Note (a “Note”),
which shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.

 

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

 

§3.          LETTERS OF
CREDIT.

 

§3.1.       Letters of Credit.

 

(a)           Subject
to the terms and conditions set forth herein, (i) the Issuing Bank agrees, in
reliance upon the agreements of the Lenders set forth in this §3, (A) from time
to time on any Business Day during the period from the Closing Date until the
Maturity Date, to issue Letters of Credit denominated in Dollars or in one or
more Alternative Currencies for the account of the Borrower, and to amend or
extend Letters of Credit previously issued by it, in accordance with §3.2
below, and (B) to honor drawings under the Letters of Credit; and (ii) the
Lenders severally agree to participate in Letters of Credit issued for the
account of the Borrower and any drawings thereunder;  provided that at no time shall the
Maximum Drawing Amount of all Letters of Credit outstanding exceed the Letter
of Credit Sublimit or, if less, the Total Commitment, and provided
further that, at no time shall the sum of (a) the Dollar Equivalent of the
aggregate principal amount of all Syndicated Loans outstanding, plus (b) the
aggregate principal amount of all Swing Line Loans outstanding, plus (c) the
aggregate principal amount of all Competitive Bid Loans outstanding, plus (d)
the aggregate Maximum Drawing Amount and all Unpaid Reimbursement Obligations
exceed the Total Commitment then in effect, and provided further that,
subject to §2.6 hereof, at no time shall the sum of (x) the Dollar Equivalent
of the aggregate principal amount of all Syndicated Loans denominated in
Alternative Currencies outstanding plus (y) the aggregate Maximum Drawing
Amount of all Letters of Credit denominated in Alternative Currencies and all
Unpaid Reimbursement Obligations with respect to Letters of Credit denominated
in Alternative Currencies exceed the Alternative Currency Sublimit.  Each request by the Borrower for the issuance
or amendment of a Letter of Credit shall be deemed to be a representation by
the Borrower that the issuance or amendment so requested complies with the
conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to
the terms and conditions hereof, the Borrower’s ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may,

 

37

 

during the foregoing period, obtain Letters of Credit to replace
Letters of Credit that have expired or will expire or that have been drawn upon
and reimbursed.

 

(b)           The
Issuing Bank shall not issue any Letter of Credit, if:

 

(i)            subject
to §3.2(c), the expiry date of such requested Letter of Credit would occur more
than twelve (12) months after the date of issuance or last extension, unless
the Required Lenders have approved such expiry date; or

 

(ii)           the
expiry date of such requested Letter of Credit would occur after the date that is ten (10) days prior to the
Maturity Date, unless all the Lenders have approved such expiry date.

 

(c)           The
Issuing Bank shall not be under any obligation to issue any Letter of Credit
if:

 

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

 

(ii)           the
issuance of such Letter of Credit would violate one or more policies of general
applicability of the Issuing Bank;

 

(iii)          except
as otherwise agreed by the Administrative Agent and the Issuing Bank such
Letter of Credit is in an initial stated amount less than $10,000;

 

(iv)          except
as otherwise agreed by the Administrative Agent and the Issuing Bank, such
Letter of Credit is to be denominated in a currency other than Dollars or an
Alternative Currency;

 

(v)           the
Issuing Bank does not as of the issuance date of such requested Letter of
Credit issue Letters of Credit in the requested currency;

 

(vi)          a
default of any Lender’s obligations to fund under §3.3 exists or any Lender is
at such time a Delinquent Lender hereunder, unless the Issuing Bank has entered
into satisfactory arrangements with the Borrower or such Lender to eliminate
the Issuing Bank’s risk with respect to such Lender.

 

38

 

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

 

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

 

(f)            The Issuing Bank shall act on behalf
of the Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and the Issuing Bank shall have all of the
benefits and immunities (i) provided to the Administrative Agent in §13
with respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit issued by it or proposed to be issued by it
and the documents related thereto pertaining to such Letters of Credit as fully
as if the term “Administrative Agent” as used in §13 included the Issuing Bank
with respect to such acts or omissions, and (ii) as additionally provided
herein with respect to the Issuing Bank.

 

§3.2.       Procedures for Issuance and Amendment of
Letters of Credit; Auto-Extension of Letters of Credit.

 

(a)           Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the Issuing Bank (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by an authorized officer of the Borrower.  Such Letter of Credit Application must be
received by the Issuing Bank and the Administrative Agent not later than (i)
11:00 a.m. (New York time) at least five (5) Business Days (provided
that the Issuing Bank shall use its best efforts to issue such Letter of Credit
within two (2) Business Days following its receipt of any written request
therefor) prior to the proposed issuance date or date of amendment, as the case
may be, of any Letter of Credit denominated in Dollars and (ii) 11:00 a.m. (New
York time) at least eight (8) Business Days (provided that the Issuing
Bank shall use its best efforts to issue such Letter of Credit within five (5)
Business Days following its receipt of any written request therefor) prior to
the proposed issuance date or date of amendment, as the case may be, of any
Letter of Credit denominated in an Alternative Currency; or in each case, such
later date and time as the Administrative Agent and the Issuing Bank may agree
in a particular instance in their sole discretion.  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 Issuing Bank: (i) the proposed issuance
date of the requested Letter of Credit (which shall be a Business Day); (ii)
the amount and currency thereof; (iii) the expiry date thereof; (iv) the name
and address of the beneficiary thereof; (v) the documents to be presented by
such beneficiary in case of any drawing thereunder; (vi) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (vii) such other matters as the Issuing Bank may reasonably
require.  In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit

 

39

 

Application shall specify in form and detail satisfactory to the
Issuing Bank (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment thereof (which shall be a Business Day); (iii) the nature of the
proposed amendment; and (iv) such other matters as the Issuing Bank may
reasonably require.  Additionally, the
Borrower shall furnish to the Issuing Bank and the Administrative
Agent such other documents and information pertaining to such requested
Letter of Credit issuance or amendment, including any documents relating
thereto, as the Issuing Bank or the Administrative Agent may reasonably
require.

 

(b)           Promptly
after receipt of any Letter of Credit Application, the Issuing Bank will
confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application
from the Borrower and, if not, the Issuing Bank will provide the Administrative
Agent with a copy thereof.  Unless the
Issuing Bank has received written notice from any Lender, the Administrative
Agent or the Borrower, at least one Business Day prior to the requested date of
issuance or amendment of the applicable Letter of Credit, that one or more
applicable conditions contained in §§9 or 10 shall not then be satisfied, then,
subject to the terms and conditions hereof, the Issuing Bank shall, on the
requested date, issue a Letter of Credit for the account of the Borrower or
enter into the applicable amendment, as the case may be, in each case in accordance
with the Issuing Bank’s usual and customary business practices.  Immediately upon the issuance of each Letter
of Credit, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Issuing Bank a risk participation
in such Letter of Credit in an amount equal to the product of such Lender’s
Commitment Percentage times the amount of such Letter of Credit.

 

(c)           If the Borrower so requests in any applicable
Letter of Credit Application, and subject to the terms and conditions set forth
in §3.1(a) hereof, the Issuing Bank agrees to issue a Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension  Letter  of
Credit”); provided that any such Auto-Extension Letter of Credit
must permit the Issuing Bank to prevent any such extension at least once in
each twelve-month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Non-Extension  Notice  Date”) in each such
twelve-month period to be agreed upon at the time such Letter of Credit is
issued.  Unless otherwise directed by the
Issuing Bank, the Borrower shall not be required to make a specific request to
the Issuing Bank for any such extension. 
Once an Auto-Extension Letter of Credit has been issued, the Lenders,
except as provided below, shall be deemed to have authorized (but may not
require) the Issuing Bank, and the Issuing Bank, except as provided below,
shall have agreed, to permit the extension of such Letter of Credit at any time
to an expiry date not later than the date that is ten (10) days prior to the
Maturity Date; provided, however, that the Issuing Bank shall
prevent such extension if (i) the Issuing Bank has determined that it would not
be permitted at such time to issue such Letter of Credit in its revised form
(as extended) under the terms hereof (by reason of the provisions of clause
§3.1(b) or otherwise), or (ii) it has received notice (which may be by
telephone or in writing) on or before the day that is five (5) Business Days
before the Non-Extension Notice Date (A)

 

40

 

from the Administrative Agent that the Required Lenders have elected to
prevent such extension (but only if such election is consistent with the terms
of the applicable Letter of Credit and the Borrower would not be entitled to
the issuance of such Letter of Credit in its revised form (as extended) under
the terms hereof) or (B) from the Administrative Agent, any Lender or the
Borrower that one or more of the applicable conditions specified in §§9 or 10
is not then satisfied, and in each such case directing the Issuing Bank not to
permit such extension. Notwithstanding the foregoing, the Issuing Bank may
prevent any extension pursuant to this §3.2(c) if it has determined that it
would have no obligation at such time to issue such Letter of Credit in its
revised form (as extended) under the terms hereof (by reason of the provisions
of clause §3.1(c) or otherwise).

 

(d)           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 Issuing Bank will also deliver to the Borrower and the Administrative Agent
a true and complete copy of such Letter of Credit or amendment.

 

§3.3.       Drawings
and Reimbursements.

 

(a)           Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the Issuing Bank shall notify the Borrower and the
Administrative Agent thereof.  In the
case of a Letter of Credit denominated in an Alternative Currency, the Borrower
shall reimburse the Issuing Bank in such Alternative Currency, unless the
Borrower shall have notified the Issuing Bank promptly following receipt of the
notice of drawing that the Borrower will reimburse the Issuing Bank in
Dollars.  In the case of any such
reimbursement in Dollars of a drawing under a Letter of Credit denominated in
an Alternative Currency, the Issuing Bank shall notify the Borrower of the
Dollar Equivalent of the amount of the drawing promptly following the
determination thereof. Not later than 11:00 a.m. (New York time) (or in the
event the Borrower has not been notified of such drawing prior to such time,
within two hours of receipt of such notice) on the date of any payment by the
Issuing Bank under a Letter of Credit to be reimbursed in Dollars, or the
Applicable Time on the date of any payment by the Issuing Bank to be reimbursed
in an Alternative Currency (each such date, an “Honor  Date”), the
Borrower shall reimburse the Issuing Bank through the Administrative Agent in
an amount equal to the amount of such drawing and in the applicable
currency.  If the Borrower fails to so
reimburse the Issuing Bank by such time, the Administrative Agent shall
promptly notify each Lender of the Honor Date and the amount of the
unreimbursed drawing (expressed in Dollars in the amount of the Dollar
Equivalent thereof in the case of a Letter of Credit denominated in an
Alternative Currency) (the “Unreimbursed  Amount”).  In such event, the Borrower shall be deemed
to have requested a Base Rate Loan to be disbursed on the Honor Date in an
amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in §2.2 for the principal amount of Base Rate Loans, but
subject to the amount of the unutilized portion of the Total Commitment and the
conditions set forth in §§9 and 10 (other than the delivery of a Loan
Request).  Any notice given by the
Issuing Bank or the Administrative Agent pursuant to this §3.3(a) may be given
by telephone if 

 

41

 

immediately confirmed in writing; provided that the lack of such
an immediate confirmation shall not affect the conclusiveness or binding effect
of such notice.

 

(b)           Each
Lender shall upon any notice pursuant to §3.3(a) make funds available to the
Administrative Agent for the account of the Issuing Bank, in Dollars, at the
Administrative Agent’s Head Office for Dollar-denominated payments, an amount
equal to its Commitment Percentage times the Unreimbursed Amount not
later than 1:00 p.m. (New York time) on the Business Day specified in such
notice by the Administrative Agent, whereupon, subject to the provisions of
§3.3(c), each Lender that so makes funds available shall be deemed to have made
a Base Rate Loan to the Borrower in such amount.  The Administrative Agent shall remit the
funds so received to the Issuing Bank in Dollars.

 

(c)           With
respect to any Unreimbursed Amount that is not fully refinanced by a Base Rate
Loan on the Honor Date because the conditions set forth in §§9 and 10 cannot be
satisfied or for any other reason, such amount shall be an Unpaid Reimbursement
Obligation, which Unpaid Reimbursement Obligation 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 Issuing Bank pursuant to §3.3(b)
shall be deemed payment in respect of its reimbursement obligation in
satisfaction of its participation obligation under this §3.3.

 

(d)           Until
each Lender funds its Loan or reimbursement obligation pursuant to this §3.3 to
reimburse the Issuing Bank for any amount drawn under any Letter of Credit,
interest in respect of such Lender’s Commitment Percentage of such amount shall
be solely for the account of the Issuing Bank.

 

(e)           Each
Lender’s obligation to make Loans or payments with respect to its reimbursement
obligation under this §3.3 to reimburse the Issuing Bank for amounts drawn
under Letters of Credit, as contemplated by this §3.3, shall be absolute and
unconditional and shall not be affected by any circumstance, including (i) any
setoff, counterclaim, recoupment, defense or other right which such Lender may
have against the Issuing Bank, the Borrower, any Subsidiary of the Issuing Bank
or the Borrower or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default, or (iii) any other occurrence, event or
condition, whether or not similar to any of the foregoing; provided, however,
that each Lender’s obligation to make Loans pursuant to this §3.3 is subject to
the conditions set forth in §§9 and 10 (other than delivery by the Borrower of
a Loan Request).  No such payment of any
Lender’s reimbursement obligations under this §3.3 shall relieve or otherwise
impair the obligation of the Borrower to reimburse the Issuing Bank for the
amount of any payment made by the Issuing Bank under any Letter of Credit,
together with interest as provided herein.

 

(f)            If
any Lender fails to make available to the Administrative Agent for the account
of the Issuing Bank any amount required to be paid by such Lender pursuant to
the foregoing provisions of this §3.3 by the time specified in §3.3(b) the
Issuing Bank shall be entitled to recover from such Lender (acting through the

 

42

 

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 Issuing Bank at a rate per annum equal
to the applicable Overnight Rate from time to time in effect.  A certificate of the Issuing Bank submitted
to any Lender (through the Administrative Agent) with respect to any amounts
owing under this clause (f) shall be conclusive absent manifest error.

 

§3.4.       Repayment of Participations.            At any time after the Issuing Bank has made a payment
under any Letter of Credit and has received from any Lender such Lender’s
payment in respect of its reimbursement obligation under §3.3, if the
Administrative Agent receives for the account of the Issuing Bank any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
directly from the Borrower or otherwise, including proceeds of Cash Collateral
applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Commitment Percentage thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such Lender’s reimbursement obligation under §3.3 was outstanding)
in Dollars and in the same funds as those received by the Administrative Agent.
If any payment received by the Administrative Agent for the account of the
Issuing Bank pursuant to §3.3(a) is required to be returned in connection with
any bankruptcy or insolvency proceeding or otherwise (including pursuant to any
settlement entered into by the Issuing Bank in its discretion), each Lender
shall pay to the Administrative Agent for the account of the Issuing Bank its
Commitment Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the applicable Overnight
Rate from time to time in effect.  The
obligations of the Lenders under the immediately preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Credit Agreement.

 

§3.5.       Obligations Absolute.  The
obligation of the Borrower to reimburse the Issuing Bank for each drawing under
each Letter of Credit shall be absolute, unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Credit Agreement
under all circumstances, including the following:

 

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

 

(b)           the
existence of any claim, counterclaim, setoff, defense or other right that the
Borrower or any Subsidiary of 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 Issuing Bank or
any other Person, whether in connection with this Credit Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement
or instrument relating thereto, or any unrelated transaction;

 

(c)           any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any

 

43

 

respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit;

 

(d)           any
payment by the Issuing Bank 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 Issuing Bank 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 insolvency law;

 

(e)           any
adverse change in the relevant exchange rates or in the availability of the
relevant Alternative Currency to the Borrower or in the relevant currency
markets generally; or

 

(f)            any
other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, including any other circumstance that might otherwise constitute
a defense available to, or a discharge of, the Borrower or any Subsidiary of
the Borrower provided that nothing in this clause (f) shall impair the rights
of the Borrower under §3.6.

 

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

 

§3.6.       Role of Issuing Bank.  Each
Lender and the Borrower agree that, in paying any drawing under a Letter of
Credit, the Issuing Bank shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly required
by the Letter of Credit) or to ascertain or inquire as to the validity or
accuracy of any such document or the authority of the Person executing or
delivering any such document.  None of
the Issuing Bank, the Administrative Agent, any of their respective Affiliates,
directors, officers, employees, agents and advisors nor any correspondent,
participant or assignee of the Issuing Bank 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
any other document relating thereto.  The
Borrower hereby assumes all risks of the acts or omissions of any beneficiary
or transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall not,
preclude the Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.  None of the

 

44

 

Issuing Bank, the Administrative Agent, any of their respective
Affiliates, directors, officers, employees, agents and advisors nor any
correspondent, participant or assignee of the Issuing Bank shall be liable or
responsible for any of the matters described in clauses (a) through (e) of
§3.5; provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the Issuing
Bank, and the Issuing Bank 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
Issuing Bank’s willful misconduct or gross negligence or the Issuing Bank’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 Issuing Bank 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 Issuing Bank 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. The responsibility of the
Issuing Bank and its correspondents to the Borrower and the Lenders shall be
only to determine that the documents (including each draft) delivered under
each Letter of Credit in connection with such presentment shall be in
conformity on their face in all material respects with such Letter of Credit.

 

§3.7.       Cash Collateral.
(a) (i) If the Issuing Bank has honored any full or partial drawing request
under any Letter of Credit and such drawing has resulted in Unpaid
Reimbursement Obligations, or (ii) if, as of the date which is ten (10) days
prior to the Maturity Date, any Letter of Credit or Unpaid Reimbursement
Obligation for any reason
remains outstanding, the Administrative Agent may require, and at the direction
of the Required Lenders, shall require, that the Borrower shall, in each case,
immediately Cash Collateralize the then outstanding amount of Unpaid
Reimbursement Obligations plus the Maximum Drawing Amount.

 

(b)           The
Administrative Agent may, at any time and from time to time after the initial
deposit of Cash Collateral, request that additional Cash Collateral be provided
in order to protect against the results of exchange rate fluctuations.

 

(c)           “Cash
Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the Issuing Bank and the Lenders, as
collateral for the outstanding amount of all Unpaid Reimbursement Obligations plus
the Maximum Drawing Amount, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent
and the Issuing Bank (which documents are hereby consented to by the
Lenders).  Derivatives of such term have
corresponding meanings.  The Borrower
hereby grants to the Administrative Agent, for the benefit of the Issuing Bank
and the Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.

 

45

 

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

 

§3.9.       Transitional Letters of Credit.  Schedule  3.9 contains a list of
certain letters of credit issued prior to the Closing Date for the account of
the Borrower by Fleet or HSBC Bank USA, National Association, in their
capacities as issuing banks under the Existing Credit Agreement (the “Existing  Letters
of  Credit”).  On the Closing Date, (a) the Existing Letters
of Credit shall be deemed to be Letters of Credit issued pursuant to this §3
and shall be subject to all of the provisions applicable to Letters of Credit
under this Credit Agreement and (b) all liabilities of the Borrower with
respect to the Existing Letters of Credit shall constitute Obligations of such
Borrower with respect to Letters of Credit in accordance with this Credit
Agreement and the Loan Documents as though such Borrower had delivered a Letter
of Credit Application under this Credit Agreement.  On the Closing Date, the letter of credit
fees owing with respect to the Existing Letters of Credit under §3.5 of the
Existing Credit Agreement shall be calculated and paid in full to Fleet,
administrative agent under the Existing Credit Agreement.  From and after the Closing Date, the Borrower
shall pay Letter of Credit Fees and such other fees as provided in §3.10, in
each case when due pursuant to §3.10, with respect to each of the Existing
Letters of Credit.

 

§3.10.     Letter of Credit Fee. 
The Borrower shall, on the first day of each calendar quarter for the
immediately preceding calendar quarter, pay to the Administrative Agent, in
Dollars, a fee (the “Letter  of  Credit  Fee”) for
each Letter of Credit issued, extended or renewed during such calendar quarter
by the Issuing Bank at a rate per annum equal to (a) with respect to each
standby Letter of Credit, the Applicable Margin with respect to Eurocurrency
Rate Loans in effect from time to time and (b) with respect to documentary
Letters of Credit, one-half (1/2) the Applicable Margin with respect to
Eurocurrency Rate Loans in effect from time to time, in each case, on the
Maximum Drawing Amount of such Letter of Credit for the period such Letter of
Credit is outstanding.  The
Administrative Agent shall, in turn, remit to each Lender (including Bank of
America) such Lender’s Commitment Percentage of the Letter of Credit Fee.  In addition, in respect of each Letter of
Credit, the Borrower shall pay the Issuing Bank for its own account (i)
quarterly in arrears on the last day of each calendar quarter, a fronting fee
equal to one-tenth of one percent (0.10%) per annum on the Maximum Drawing Amount
of such Letter of Credit for the period such Letter of Credit is outstanding,
and, (ii) at such other time or times as such charges are customarily made by
the Issuing Bank, the Issuing Bank’s customary issuance, amendment, negotiation
or document examination and other administrative fees as in effect from time to
time

 

§3.11.     Conflict with Issuer Documents. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application or any other document related thereto, the terms hereof shall
control.

 

46

 

§4.          CERTAIN
GENERAL PROVISIONS; FEES.

 

§4.1.       Closing and
Administrative Agent Fees. 
The Borrower shall pay (a) to the Administrative Agent for the accounts
of the Lenders on the Closing Date a closing fee as set forth in that certain
letter agreement, dated as of the November 3, 2004 (as such agreement may be
amended and in effect from time to time, the “Fee  Letter”) by and
among the Borrower, the Administrative Agent and the Arranger and (b) the fees
(the “Administrative  Agent  Fees”) to the
Administrative Agent and the Arranger in the amounts and at the times set forth
in the Fee Letter.

 

§4.2.       Other Fees.

 

§4.2.1.    Facility Fee. 
During the Revolver Period, the Borrower agrees to pay to the
Administrative Agent for the accounts of the Lenders in accordance with their
respective Commitment Percentages a facility fee (the “Facility  Fee”), which shall be
calculated for each day at a per annum rate as set forth in the definition of Applicable
Margin with respect to the Facility Fee in effect at such time on the Total
Commitment.  The Facility Fee shall be
payable quarterly in arrears on the last day of each calendar quarter for the
calendar quarter then ended commencing on the first such date following the
Closing Date, with a final payment on the Maturity Date or any earlier date on
which the Total Commitment shall terminate.

 

§4.2.2.    Utilization Fee. 
During the Revolver Period, for any day on which the outstanding
principal amount of Loans plus the Maximum Drawing Amount exceeds an
amount equal to fifty percent (50%) of the Total Commitment then in effect, the
Borrower agrees to pay to the Administrative Agent for the accounts of the
Lenders in accordance with their respective Commitment Percentages a
utilization fee (the “Utilization  Fee”), which shall be calculated for each day
at a per annum rate as set forth in the definition of Applicable Margin with
respect to the Utilization Fee in effect at such time on the outstanding
principal amount of the Loans.  The
Utilization Fee shall be payable quarterly in arrears on the last day of each
calendar quarter for the calendar quarter then ended commencing on the first
such date following the Closing Date, with a final payment on the Maturity Date
or any earlier date on which the Total Commitment shall terminate.

 

§4.3.       Funds for Payments.

 

§4.3.1.    Payments
to Administrative Agent. 
All payments of principal, interest, Facility Fees, Utilization Fees,
Letter of Credit Fees and any other fees or amounts due hereunder or under any
of the other Loan Documents shall be made to the Administrative Agent, for the
respective accounts of the Lenders and the Administrative Agent, not later
than, except with respect to principal and interest on Loans denominated in an
Alternative Currency, 2:00 p.m. (New York time), at the Administrative Agent’s
Head Office or at such other location designated by the Administrative Agent
that the Administrative Agent may from time to time designate, in each case in
Same Day Funds. Except as otherwise expressly provided herein, all payments by
the Borrower hereunder

 

47

 

with respect to principal and interest on Loans denominated in an
Alternative Currency 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 Head Office, or at such other location designated by the Administrative
Agent that the Administrative Agent may from time to time designate, in such
Alternative Currency and in Same Day Funds not later than the Applicable Time
specified by the Administrative Agent on the dates specified herein. Without
limiting the generality of the foregoing, the Administrative Agent may require that
any payments due under this Credit Agreement be made in the United States.

 

§4.3.2.    No Offset, Etc. 
All payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without condition or deduction for any recoupment,
defense, setoff or counterclaim and free and clear of and without deduction for
any taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is compelled by law to
make such deduction or withholding.  If
any such obligation is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, other than
(a) with respect to taxes based upon the Administrative Agent’s or any Lender’s
net income, or (b) with respect to amounts owing to a Lender that (i) is not
incorporated under the laws of the United States of America or a state thereof
and (ii) has not delivered to the Administrative Agent the forms referred to in
§4.3.3 hereof, the Borrower will pay to the Administrative Agent, for the
account of the Lenders or (as the case may be) the Administrative Agent, on the
date on which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars or the applicable Alternative
Currency as shall be necessary to enable the Lenders or the Administrative Agent
to receive the same net amount which the Lenders or the Administrative Agent
would have received on such due date had no such obligation been imposed upon
the Borrower.  The Borrower will deliver
promptly to the Administrative Agent certificates or other valid vouchers for
all taxes or other charges deducted from or paid with respect to payments made
by the Borrower hereunder or under such other Loan Document.

 

§4.3.3.    Withholding.
 Each Lender and the Administrative
Agent that is not a U.S. Person as defined in Section 7701(a)(30) of the Code
for federal income tax purposes (a “Non-U.S.  Lender”) hereby
agrees that, if and to the extent it is legally able to do so, it shall, on the
date it becomes a Lender hereunder, deliver to the Borrower and the Administrative
Agent such certificates, documents or other evidence, as and when required by
the Code or Treasury Regulations issued pursuant thereto, including (a) in the
case of a Non-U.S. Lender that is a “bank” for purposes of Section 881(c)(3)(A)
of the Code, two (2) duly completed copies of Internal Revenue Service Form
W-8BEN or Form W-8ECI and any other certificate or statement of exemption
required by Treasury Regulations, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Lender or the
Administrative Agent establishing that with respect to payments of principal,
interest or fees hereunder it is (i) not subject to United States federal
withholding tax under the Code because such payment is effectively connected
with the conduct by such Lender or Administrative Agent of a trade or

 

48

 

business in the United States or (ii) totally exempt from United States
federal withholding tax under a provision of an applicable tax treaty and (b)
in the case of a Non-U.S. Lender that is not a “bank” for purposes of
Section 881(c)(3)(A) of the Code, a certificate in form and substance
reasonably satisfactory to the Administrative Agent and the Borrower and to the
effect that (i) such Non-U.S. Lender is not a “bank” for purposes of
Section 881(c)(3)(A) of the Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated as a bank
for purposes of any tax, securities law or other filing or submission made to
any governmental authority, any application made to a rating agency or
qualification for any exemption from any tax, securities law or other legal
requirements, (ii) is not a ten (10) percent shareholder for purposes of
Section 881(c)(3)(B) of the Code and (iii) is not a controlled foreign
corporation receiving interest from a related person for purposes of Section
881(c)(3)(C) of the Code, together with a properly completed Internal Revenue
Service Form W-8 or W-9, as applicable (or successor forms).  Each Lender or the Administrative Agent
agrees that it shall, promptly upon a change of its lending office or the
selection of any additional lending office, to the extent the forms previously
delivered by it pursuant to this section are no longer effective, and promptly
upon the Borrower’s or the Administrative Agent’s reasonable request after the
occurrence of any other event (including the passage of time) requiring the
delivery of a Form W-8BEN, Form W-8ECI, Form W-8 or W-9 in addition to or in
replacement of the forms previously delivered, deliver to the Borrower and the
Administrative Agent, as applicable, if and to the extent it is properly
entitled to do so, a properly completed and executed Form W-8BEN, Form W-8ECI,
Form W-8 or W-9, as applicable (or any successor forms thereto). Without
limiting the obligations of the Lenders set forth above regarding delivery of
certain forms and documents to establish each Lender’s status for U.S.
withholding tax purposes, each Lender agrees promptly to deliver to the
Administrative Agent or the Borrower, as the Administrative Agent or the
Borrower shall reasonably request, on or prior to the Closing Date, and in a
timely fashion thereafter, such other documents and forms required by any
relevant taxing authorities under the laws of any other jurisdiction, duly
executed and completed by such Lender, as are required under such laws to
confirm such Lender’s entitlement to any available exemption from, or reduction
of, applicable withholding taxes in respect of all payments to be made to such
Lender outside of the U.S. by the Borrower pursuant to this Credit Agreement or
otherwise to establish such Lender’s status for withholding tax purposes in
such other jurisdiction.  Each Lender
shall promptly (A) notify the Administrative Agent of any change in
circumstances which would modify or render invalid any such claimed exemption
or reduction, and (B) take such reasonable steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such Lender, and as may be
reasonably necessary to avoid any requirement of applicable laws of any such
jurisdiction that the Borrower make any deduction or withholding for taxes from
amounts payable to such Lender. 
Additionally, the Borrower shall promptly deliver to the Administrative
Agent or any Lender, as the Administrative Agent or such Lender shall
reasonably request, on or prior to the Closing Date, and in a timely fashion
thereafter, such documents and forms required by any relevant taxing
authorities under the laws of any jurisdiction, duly executed and completed by
the Borrower, as are required to be furnished by such Lender or the
Administrative Agent under such laws in connection with any payment by the
Administrative Agent or any

 

49

 

Lender of taxes or otherwise in connection with the Loan Documents,
with respect to such jurisdiction. This §4.3.3 shall not be construed to
require the Administrative Agent, any Lender or the Issuing Bank to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to the Borrower or any other Person.

 

§4.4.       Computations.. 
All computations of interest for Base Rate Loans when the Base Rate is
determined by Bank of America’s “prime rate” shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest
shall be based on a 360-day year, and, in each case, paid for the actual number
of days elapsed, or, in the case of interest in respect of Loans denominated in
Alternative Currencies as to which market practice differs from the foregoing,
in accordance with such market practice. Except as otherwise provided in the
definition of the term “Interest  Period” with respect to Eurocurrency Rate
Loans, whenever a payment hereunder or under any of the other Loan Documents
becomes due on a day that is not a Business Day, the due date for such payment
shall be extended to the next succeeding Business Day, and interest shall
accrue during such extension.

 

§4.5.       Inability to
Determine Eurocurrency Rate. 
In the event, prior to the commencement of any Interest Period relating
to any Eurocurrency Rate Loan (whether denominated in Dollars or an Alternative
Currency), the Administrative Agent shall determine or be notified by the
Required Lenders that adequate and reasonable methods do not exist for
ascertaining the Eurocurrency Rate that would otherwise determine the rate of
interest to be applicable to any Eurocurrency Rate Loan during any Interest
Period, the Administrative Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Lenders) to the Borrower and the Lenders. 
In such event (a) any Loan Request or Conversion Request with respect to
Eurocurrency Rate Loans in the affected currency or currencies shall be
automatically withdrawn and, in the case of Loans requested in Alternative
Currencies, shall be deemed a request for a Loan denominated in Dollars (or at
the timely request of the Borrower, a Loan denominated in an unaffected
Alternative Currency), and in the case of Loans requested in Dollars, shall be
deemed a request for Base Rate Loans, (b) each Eurocurrency Loan in the affected
currency or currencies, will automatically, on the last day of the then current
Interest Period relating thereto, (i) in the case of Eurocurrency Rate Loans
denominated in an Alternative Currency, become a Loan denominated in Dollars
(or at the timely request of the Borrower, a Loan denominated in an unaffected
Alternative Currency) and (ii) in the case of a Eurocurrency Rate Loan
denominated in Dollars, become a Base Rate Loan, and (c) the obligations of the
Lenders to make Eurocurrency Rate Loans in the affected currency or currencies
shall be suspended until the Administrative Agent or the Required Lenders, as
applicable, determine that the circumstances giving rise to such suspension no
longer exist, whereupon the Administrative Agent or, as the case may be, the
Administrative Agent upon the instruction of the Required Lenders, shall so
notify the Borrower and the Lenders.

 

§4.6.       Illegality. 
Notwithstanding any other provisions herein, if any present or future
law, regulation, treaty or directive or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain Eurocurrency
Rate Loans

 

50

 

(whether denominated in Dollars or an Alternative Currency), such
Lender shall forthwith give notice of such circumstances to the Borrower and
the other Lenders and thereupon the commitment of such Lender to make
Eurocurrency Rate Loans in the affected currency or currencies or convert Loans
of another Type to Eurocurrency Rate Loans in the affected currency or
currencies shall forthwith be suspended and such Lender’s Loans then
outstanding as Eurocurrency Rate Loans in the affected currency or currencies,
if any, shall be automatically, on the last day of the then current Interest Period
relating thereto or within such earlier period as may be required by law, (a)
in the case of Eurocurrency Rate Loans denominated in an Alternative Currency,
converted to a Loan denominated in Dollars (or at the timely request of the
Borrower, a Loan denominated in an unaffected Alternative Currency) and (b) in
the case of a Eurocurrency Rate Loan denominated in Dollars, converted to a
Base Rate Loan.  The Borrower hereby
agrees promptly to pay the Administrative Agent for the account of such Lender,
upon demand by such Lender, any additional amounts necessary to compensate such
Lender for any costs incurred by such Lender in making any conversion in
accordance with this §4.6, including any interest or fees payable by such
Lender to lenders of funds obtained by it in order to make or maintain its
Eurocurrency Rate Loans hereunder.

 

§4.7.       Additional Costs, Etc.  If any change after the Closing Date to any
present applicable law or if any future applicable law, which expression, as
used herein, includes statutes, rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or other
regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at
any time or from time to time hereafter made upon or otherwise issued to any
Lender or the Administrative Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:

 

(a)           subject any Lender or the
Administrative Agent to any tax, levy, impost, duty, charge, fee, deduction or
withholding of any nature with respect to this Credit Agreement, the other Loan
Documents, such Lender’s Commitment, the Loans or the Letters of Credit or any
risk participation with respect to such Letters of Credit (other than taxes
based upon or measured by the income or profits of such Lender or the
Administrative Agent), or

 

(b)           materially change the basis of
taxation (except for changes in taxes on income or profits) of payments to any
Lender of the principal of or the interest on any Loans or any other amounts
payable to any Lender or the Administrative Agent under this Credit Agreement
or any of the other Loan Documents, or

 

(c)           impose or increase or render applicable
(other than to the extent specifically provided for elsewhere in this Credit
Agreement) any special deposit, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans by, or
letters of credit issued by (or any risk participation with respect to such
letters of credit), or commitments of an office of any Lender,

 

51

 

(d)           impose on any Lender or the
Administrative Agent any other conditions or requirements with respect to this
Credit Agreement, the other Loan Documents, the Loans, the Letters of Credit or
any risk participation with respect to such Letters of Credit, such Lender’s
Commitment, or any class of loans, letters of credit or commitments of which
any of the Loans or such Lender’s Commitment forms a part, or

 

(e)           result
in the Mandatory Cost, as calculated hereunder, not representing the cost to
any Lender of complying with the requirements of the Bank of England and/or the
Financial Services Authority or the European Central Bank in relation to its
making, funding or maintaining Eurocurrency Rate Loans denominated in an
Alternative Currency,

 

and
the result of any of the foregoing is:

 

(i)            to
increase the cost to any Lender, of making, funding, issuing, renewing,
extending or maintaining any of the Loans, the Letters of Credit or such Lender’s
Commitment, or

 

(ii)           to
reduce the amount of principal, interest, or other amount payable to such
Lender or the Administrative Agent hereunder on account of such Lender’s
Commitment, or any of the Loans or Letters of Credit, or

 

(iii)          to
require such Lender or the Administrative Agent to make any payment or to
forego any interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the gross
amount of any sum receivable or deemed received by such Lender or the
Administrative Agent from the Borrower hereunder,

 

then, in each such case and to the extent that the
amount of such additional cost, reduction, payment, foregone interest or other
sum is not reflected in the Base Rate or the Eurocurrency Rate, the Borrower
will, upon demand made by such Lender or (as the case may be) the
Administrative Agent at any time and from time to time and as often as the
occasion therefor may arise, pay to such Lender or the Administrative Agent
such additional amounts as will be sufficient to compensate such Lender or the
Administrative Agent for such additional cost, reduction, payment or foregone
interest or other sum (without duplication for recovery of such amounts under
any other provision hereof), provided that the Borrower shall not be
liable to any Lender or the Administrative Agent for costs incurred more than
sixty (60) days prior to 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 60-day period solely as a result of such
present or future applicable law being retroactive to a date which occurred
prior to such 60-day period.

 

§4.8.       Capital Adequacy. 
If after the Closing Date any Lender or the Administrative Agent
determines that the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the

 

52

 

interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction has the effect of reducing the return
on such Lender’s or the Administrative Agent’s commitment with respect to any
Loans or Letters of Credit to a level below that which such Lender or the
Administrative Agent could have achieved but for such adoption, change or
compliance (taking into consideration such Lender’s or the Administrative Agent’s
then existing policies with respect to capital adequacy and assuming full
utilization of such entity’s capital) by any amount deemed by such Lender or
(as the case may be) the Administrative Agent to be material, then such Lender
or the Administrative Agent may notify the Borrower of such fact.  To the extent that the amount of such
reduction in the return on capital is not reflected in the Base Rate or the
Eurocurrency Rate then the Borrower agrees to pay such Lender or (as the case
may be) the Administrative Agent for the amount of such reduction in the return
on capital as and when such reduction is determined upon presentation by such
Lender or (as the case may be) the Administrative Agent of a certificate in
accordance with §4.9 hereof, provided that the Borrower shall not be liable to
any Lender or the Administrative Agent for costs incurred more than sixty (60)
days prior to receipt by the Borrower of the notice referred to in the
immediately preceding sentence from such Lender or (as the case may be) the
Administrative Agent.  Each Lender shall
allocate such cost increases among its customers in good faith and on an
equitable basis.

 

§4.9.       Certificate. 
A certificate setting forth any additional amounts payable pursuant to
§§4.7 or 4.8 hereof and a brief explanation of such amounts which are due,
submitted by any Lender or the Administrative Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.  If the Borrower is required to pay any
additional amounts pursuant to §§4.7 or 4.8 hereof with respect to any Lender,
the Borrower may, following payment in full of the amount or amounts due set
forth in such certificate, take the actions permitted by §4.12 hereof to
replace such Lender.

 

§4.10.     Indemnity. 
The Borrower agrees to indemnify each Lender and to hold each Lender harmless
from and against all redeployment costs or expenses that such Lender may
reasonably sustain or incur as a consequence of (a) default by the Borrower in
payment of the principal amount of or any interest on any Eurocurrency Rate
Loan, Competitive Bid Loan or Swing Line Loan which is a Fixed Rate Loan as and
when due and payable, including any such cost or expense arising from interest
or fees payable by such Lender to lenders of funds obtained by it in order to
maintain its Eurocurrency Rate Loans, Competitive Bid Loans or such Swing Line
Loans, (b) default by the Borrower in making a borrowing or conversion after
the Borrower has given (or is deemed to have given) a Loan Request or a
Conversion Request relating thereto in accordance with §§2.2 or 2.9 hereof, (c)
the making of any payment of a Eurocurrency Rate Loan, Competitive Bid Loan or
Swing Line Loan which is a Fixed Rate Loan or the making of any conversion of
any such Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Lender to lenders of funds obtained by it in order to maintain
any such Loans, or (d) any failure by the Borrower to make payment of any Loan
(or interest due thereon)

 

53

 

denominated in an Alternative Currency on its scheduled due date or any
payment thereof in a different currency.

 

§4.11.     Interest After Default.  Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents, if not
repaid on or before the fifth calendar day following the day such payment was
due, shall bear interest from the due date thereof, compounded monthly and
payable on demand at any time from and after the fifth calendar day following
the day such payment was due, at a rate per annum equal to two percent (2%)
above the rate of interest then applicable thereto (or, if no rate of interest
is then applicable thereto, the Base Rate) until such amount shall be paid in
full (after as well as before judgment).

 

§4.12.     Replacement of
Individual Lenders.  Upon the happening of any of the events set
forth in §§2.4.2, 4.3.2, 4.3.3, 4.6, 4.7, 4.8 or 4.13, or in the case of a
Delinquent Lender, the Borrower may (provided that at the time no Default or
Event of Default exists or would result after giving effect to the Borrower’s
action) prepay in full all Loans and other obligations owing by the Borrower to
each affected Lender under §§2.4.2, 4.3.2, 4.3.3, 4.6, 4.7, 4.8 or 4.13 and/or
each Delinquent Lender (each such Lender being called a “Substituted  Lender”), together
with all amounts payable by the Borrower under §4.10 hereof with respect to
such prepayment, and terminate the Commitment(s) of such Lender(s) subject to
the following conditions:

 

(a)           the Borrower shall have delivered to
the Administrative Agent not less than ten (10) Business Days prior to the
exercise of its rights under this §4.12 a written commitment in form and
substance satisfactory to the Administrative Agent and each of the Lenders from
a banking institution (the “Replacement  Lender”) reasonably
acceptable to the Administrative Agent and each of the remaining Lenders (other
than the Substituted Lender) in which such Replacement Lender agrees to become
a “Lender” under this Credit Agreement, having a Commitment Amount in the
amount of the Substituted Lender’s Commitment Amount;

 

(b)           the Borrower shall have given
appropriate notice of any prepayment under this §4.12 as required by §4.7 and
subject to all other provisions of this Credit Agreement; and

 

(c)           simultaneously with any prepayment of
all Loans and other obligations owing by the Borrower to a Substituted Lender
under this §4.12, the Substituted Lender shall have assigned, pursuant to §17
hereof of this Credit Agreement the Commitment of such Substituted Lender to
the Replacement Lender and such Replacement Lender shall have become a Lender
under this Credit Agreement, having a Commitment Amount in the amount of such
Substituted Lender’s Commitment Amount and such Replacement Lender shall have
simultaneously funded all such Loans prepaid hereunder. Each of the Lenders
agrees that in the event that it becomes a Substituted Lender pursuant to this
§4.12, it will cooperate and assign its Commitment pursuant to this §4.12(c).

 

54

 

§4.13.     Additional Reserve
Requirements. The Borrower shall pay to each Lender, (i) 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
Eurocurrency Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), and (ii) as long as such Lender shall be required to comply
with any reserve ratio requirement or analogous requirement of any other central banking or financial
regulatory authority imposed in respect of the maintenance of the Commitments
or the funding of the Eurocurrency Rate Loans in an Alternative Currency, such
additional costs, (expressed as a percentage per annum and rounded upwards, if
necessary, to the nearest five decimal places), to the extent not reflected in
the Mandatory Cost, equal to the actual
costs allocated to such Commitment or Loan by such Lender (as determined by
such Lender in good faith, which determination shall be conclusive), which in each case shall be due and payable on each date on which interest is payable on
such Loan, provided the Borrower shall have received at least ten (10)
days’ prior notice (with a copy to the Administrative Agent) of such additional
interest or costs from such
Lender.  If a Lender fails to give notice
ten (10) days prior to the relevant Interest Payment Date, such additional interest
or costs shall be due and payable ten
(10) days from receipt of such notice.

 

§4.14.     Guaranties. 
The payment and performance of the Obligations shall be guaranteed by
each Guarantor pursuant to the Guaranties, each of which shall be in the form
of Exhibit  E
hereto.  The Borrower may cause
additional Subsidiaries of the Borrower to become Guarantors hereunder by
causing such Subsidiary or Subsidiaries to agree to be bound by the provisions
of the Guaranty, to execute and deliver a Joinder Agreement and to deliver such
legal opinions and other documents and instruments as the Administrative Agent
may request.  The Administrative Agent
and the Lenders hereby agree that they shall, upon the written request of the
Borrower and at the cost and expense of the Borrower, release any Guarantor
from its obligations to the Administrative Agent and the Lenders under the
Guaranty to which such Guarantor is a party if, and only if, (a) such Guarantor
is not a guarantor of any of the Borrower’s publicly issued notes or bonds
outstanding from time to time, (b) no Default or Event of Default shall have
occurred and be continuing on the date of such release, (c) the Borrower shall
be in compliance with the Obligor Group Requirement after giving effect to such
release and (d) the Borrower shall have delivered to the Administrative Agent
and the Lenders on the date of such release a certificate signed by an
authorized officer of the Borrower and evidence satisfactory to the
Administrative Agent and the Lenders showing compliance with the provisions of
clauses (a), (b) and (c) hereof.  The
Borrower shall deliver to the Lenders an updated Schedule  2 upon
the release or addition of any Guarantor as provided in this §4.14.

 

§5.          REPRESENTATIONS
AND WARRANTIES.

 

The
Borrower represents and warrants to the Lenders and the Administrative Agent as
follows:

 

55

 

§5.1.       Corporate Authority.

 

§5.1.1.    Incorporation;
Good Standing.  The Borrower and each Guarantor (a) is a
corporation (or similar business entity) or, as the case may be, a
Massachusetts Business Trust duly organized, validly existing and in good
standing under the laws of its state of incorporation or organization, (b) has
all requisite corporate (or the equivalent company) or, as the case may be,
trust power to own its property and conduct its business as now conducted and
as presently contemplated, and (c) is in good standing as a foreign corporation
(or similar business entity) and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure to be
so qualified would not have a materially adverse effect on the business, assets
or financial condition of the Borrower.

 

§5.1.2.    Authorization. 
The execution, delivery and performance of this Credit Agreement and the
other Loan Documents by the Borrower and each Guarantor which is or is to
become a party thereto, and the transactions contemplated hereby and thereby
(a) are within the corporate (or the equivalent company) or, as the case may
be, trust authority of such Person, (b) have been duly authorized by all
necessary corporate (or the equivalent company) or, as the case may be, trust
proceedings, (c) do not conflict with or result in any breach or contravention
of any provision of law, statute, rule or regulation to which such Person is subject
which would have a material adverse effect either individually or in the
aggregate on the Borrower and its Subsidiaries taken as a whole or on the
ability of such Person to fulfill its obligations under this Credit Agreement
and the other Loan Documents to which it is a party, (d) do not conflict with
or result in any breach or contravention of any judgment, order, writ,
injunction, license or permit applicable to the Borrower or any Guarantor and
(e) do not conflict with any provision of the corporate charter or bylaws (or
similar constitutive documents) or, as the case may be, the Agreement and
Declaration of Trust of, or any agreement or other instrument binding upon, the
Borrower or any Guarantor.

 

§5.1.3.    Enforceability. 
The execution and delivery of this Credit Agreement and the other Loan
Documents to which the Borrower or any Guarantor is or is to become a party
will result in valid and legally binding obligations of such Person enforceable
against it in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors’ rights and except to the extent that availability of the
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.

 

§5.2.       Governmental Approvals.  The execution, delivery and performance by
the Borrower and the Guarantors of this Credit Agreement and the other Loan
Documents to which the Borrower or any Guarantor is or is to become a party and
the transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority other than
those already obtained.

 

56

 

§5.3.       Title to Properties; Leases.  Except as indicated on Schedule  5.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in
the consolidated balance sheet of the Borrower as at the Balance Sheet Date or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date), subject to no rights of
others, including any mortgages, leases, conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.

 

§5.4.       Financial Statements;
Fiscal Year.  (a) There has been furnished to each of the
Lenders an audited consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date, and consolidated statements of
income and cash flow of the Borrower and its Subsidiaries for the fiscal year
then ended, certified by Ernst & Young LLP. 
Such balance sheet and statements of income and cash flows have been
prepared in accordance with GAAP and fairly present the financial condition of
the Borrower and its Subsidiaries as at the close of business on the date
thereof and the results of operations for the fiscal year then ended.  There are no contingent liabilities of the
Borrower or any of its Subsidiaries as of such date involving material amounts,
known to the officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto.

 

(a)           There has been furnished to each of
the Lenders an unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as at October 30, 2004, and unaudited consolidated statements of
income and cash flow of the Borrower and its Subsidiaries for the fiscal
quarter then ended.  Such balance sheet
and statements of income and cash flows have been prepared in accordance with
GAAP and fairly present the financial condition of the Borrower and its
Subsidiaries as at the close of business on the date thereof and the results of
operations for the fiscal quarter then ended (subject to year-end
adjustments).  There are no contingent
liabilities of the Borrower or any of its Subsidiaries as of such date
involving material amounts, known to the officers of the Borrower, which were
not disclosed in such balance sheet and the notes related thereto.

 

(b)           The Borrower has a fiscal year which
is the 52/53 week period ending on the Saturday closest to January 31st  of each year.

 

§5.5.       No Material Changes, Etc.  Since the Balance Sheet Date there has
occurred no change in the operations, business, properties, assets or financial
condition of the Borrower and its Subsidiaries as shown on or reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date, or the consolidated statements of income and cash flows for
the fiscal year then ended, other than changes in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business, assets or financial condition of the Borrower
and its Subsidiaries taken as a whole. 
Since the Balance Sheet Date, the Borrower has not made any
Distributions except Distributions made in compliance with §7.4 hereof.

 

57

 

§5.6.       Franchises, Patents,
Copyrights, Etc.  The Borrower and each of its Subsidiaries
possesses all franchises, patents, copyrights, trademarks, trade names,
licenses and permits, and rights in respect of the foregoing, adequate for the
conduct of its business substantially as now conducted without known conflict
with any rights of others.

 

§5.7.       Litigation. 
Except as set forth in Schedule  5.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or, to the
best of the Borrower’s knowledge, threatened against the Borrower or any of its
Subsidiaries before any court, tribunal or administrative agency or board that,
either in any case or in the aggregate, would be reasonably likely to (i) materially
adversely affect the properties, assets, financial condition or business of the
Borrower and its Subsidiaries taken as a whole, (ii) materially impair the
right of the Borrower and each of its Subsidiaries to carry on business
substantially as now conducted by it, (iii) result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of the Borrower and its
Subsidiaries or (iv) question the validity of this Credit Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.

 

§5.8.       Compliance with
Other Instruments, Laws, Etc. 
Neither the Borrower nor any of its Subsidiaries is in violation of any
provision of its charter documents, bylaws (or equivalent constitutive
documents), or any agreement or instrument to which it may be subject or by
which it or any of its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that could result in the imposition of substantial penalties or materially and
adversely affect the financial condition, properties or business of the
Borrower and its Subsidiaries taken as a whole.

 

§5.9.       Tax Status. 
The Borrower and each of its Subsidiaries (a) has made or filed all
applicable federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject, (b) has paid
all taxes and other governmental assessments and charges shown or determined to
be due on such returns, reports and declarations, except those being contested
in good faith and by appropriate proceedings and (c) has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
apply.  Except as set forth on Schedule
5.9 attached hereto, there are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Borrower know of no basis for any such claim.

 

§5.10.     No Event of Default. 
No Default or Event of Default has occurred and is continuing.

 

§5.11.     Holding Company
and Investment Company Acts. 
Neither the Borrower nor any of its Subsidiaries is a “holding  company”,
or a “subsidiary  company” of a “holding  company”, or an “affiliate” of a “holding  company”, as such terms are defined in the
Public Utility Holding Company Act of 1935; nor is such Person an

 

58

 

“investment  company”, or a “principal  underwriter” of an “investment  company”, or a
company controlled by an “investment  company”, as such terms are defined in the
Investment Company Act of 1940.

 

§5.12.     Employee Benefit Plans.

 

§5.12.1. In General. 
Each Employee Benefit Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA, all
Applicable Pension Legislation, and, to the extent applicable, the Code,
including but not limited to the provisions thereunder respecting the bonding
of fiduciaries and other persons handling plan funds as required by §412 of
ERISA.  No prohibited transaction has
occurred that would result in material liability for the Borrower or any of its
Subsidiaries.

 

§5.12.2. Terminability
of Welfare Plans.  No Employee Benefit Plan which is an employee
welfare benefit plan within the meaning of §3(1) or §3(2)(B) of ERISA provides
benefit coverage subsequent to termination except as required by Title I,
Subtitle B, Part 6 of ERISA or applicable state law. The Borrower may terminate
each such Plan at any time (or at any time subsequent to the expiration of any
applicable bargaining agreement) in the discretion of the Borrower without
liability to any Person other than for claims arising or benefits accruing
prior to termination.

 

§5.12.3. Guaranteed
Pension Plans.  Each contribution required to be made to a
Guaranteed Pension Plan, whether required to be made to avoid the incurrence of
an accumulated funding deficiency, the notice or lien provisions of §302(f) of
ERISA, or otherwise, has been timely made. 
No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed Pension
Plan, and neither the Borrower nor any ERISA Affiliate is obligated to or has
posted security in connection with an amendment to a Guaranteed Pension Plan
pursuant to §307 of ERISA or §401(a)(29) of the Code.  No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by the
Borrower or any ERISA Affiliate with respect to any Guaranteed Pension Plan and
there has not been any ERISA Reportable Event, or any other event or condition
which presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each Guaranteed Pension Plan (which
in each case occurred within twelve months of the date of this representation),
and on the actuarial methods and assumptions employed for that valuation,
except as set forth on Schedule  5.12 attached hereto, the aggregate benefit
liabilities of all such Guaranteed Pension Plans within the meaning of §4001 of
ERISA did not exceed the aggregate value of the assets of all such Guaranteed
Pension Plans, disregarding for this purpose the benefit liabilities and assets
of any Guaranteed Pension Plan with assets in excess of benefit liabilities.

 

§5.12.4. Multiemployer
Plans.
 Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such

 

59

 

Multiemployer Plan under §4201 of ERISA or as a result of a sale of
assets described in §4204 of ERISA. 
Neither the Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and within the
meaning of §4241 or §4245 of ERISA or is at risk of entering reorganization or
becoming insolvent, or that any Multiemployer Plan intends to terminate or has
been terminated under §4041A of ERISA.

 

§5.13.     Regulations U and X, Etc.  The proceeds of the Revolving Credit Loans
shall be used for the purposes described in §6.12 hereof.  No portion of any Revolving Credit Loan is to
be used for the purpose of purchasing or carrying any “margin  security” or “margin  stock”
(as such terms are used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224 (the “Margin  Regulations”)) in
violation of the Margin Regulations.

 

§5.14.     Environmental Compliance.  The Borrower has taken all reasonably
necessary steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted thereon and, based upon such diligent
investigation, has determined that:

 

(a)           none of the Borrower, its
Subsidiaries nor any operator of the Real Estate or any operations thereon is
in violation, or alleged violation, of any Environmental Laws, which violation
would have a material adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries taken as a whole;

 

(b)           neither the Borrower nor any of its
Subsidiaries has received any Environmental Notice during the last five (5)
years that has the potential to materially affect the assets, liabilities,
financial condition or operations of the Borrower and its Subsidiaries taken as
a whole, except as set forth on Schedule  5.14 hereto;

 

(c)           except as set forth on Schedule
5.14 attached hereto: (i) no portion of the Real Estate has been used
for the handling, processing, storage or disposal of Hazardous Substances; and
no underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate; in each case except in
accordance with applicable Environmental Laws the noncompliance with which
would have a material adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries, taken as a whole; (ii) in the
course of any activities conducted by the Borrower or operators of its
properties, no Hazardous Substances have been generated or are being used on
the Real Estate except in accordance with applicable Environmental Laws the
noncompliance with which would have a material adverse effect on the business,
assets or financial condition of the Borrower and its Subsidiaries, taken as a
whole; (iii) there have been no releases or threatened releases of Hazardous
Substances on, upon, into or from the properties of the Borrower or any of its
Subsidiaries, which releases would have a material adverse effect on the
business, assets or financial condition of the Borrower and its Subsidiaries,
taken as a whole; (iv) to the best of the Borrower’s knowledge, there have been
no releases on, upon, from or into any

 

60

 

real property in the vicinity of any of the Real Estate which, through
soil or groundwater contamination, may have come to be located on the Real
Estate and which would have a material adverse effect on the Borrower and its
Subsidiaries, taken as a whole; and (v) in addition, any Hazardous Substances
that have been generated on any of the Real Estate have, to the best of the
Borrower’s knowledge, been transported offsite only as required under and in
compliance with applicable Environmental Laws.

 

§5.15.     Foreign Assets Control Regulations, Etc.  None of
the requesting or borrowing of the Loans, the requesting or issuance, extension
or renewal of any Letters of Credit or the use of the proceeds of any thereof
will violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq., as amended)
(the “Trading  With  the  Enemy  Act”) or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) (the “Foreign
Assets  Control
Regulations”) or any enabling legislation
or executive order relating thereto (which for the avoidance of doubt shall
include, but shall not be limited to (a) Executive Order 13224 of September 21,
2001 Blocking Property and Prohibiting Transactions With Persons Who Commit,
Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive  Order”)
and (b) the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56)).  Furthermore, neither the
Borrower nor any of its Subsidiaries or, to Borrower’s knowledge, other
Affiliates (a) is or will become a “blocked person” as described in the
Executive Order, the Trading With the Enemy Act or the Foreign Assets Control
Regulations or (b) engages or will engage in any dealings or transactions, or
be otherwise associated, with any such “blocked person”.

 

§5.16.     Subsidiaries, Etc. 
As of the Closing Date, other than those Subsidiaries of the Borrower
described on Schedule  5.16(a) attached hereto, the Borrower has no other
Subsidiaries.  As of the Closing Date,
except as set forth on Schedule  5.16(b) attached hereto, neither
the Borrower nor any Subsidiary of the Borrower is engaged in any joint venture
or partnership with any other Person.  As
of the Closing Date, except as set forth on Schedule
5.16(c) attached hereto, neither the
Borrower nor any Subsidiary of the Borrower owns or has acquired an equity
interest of fifty percent (50%) or less in any other Person.  The Borrower hereby agrees to deliver to the
Lenders an updated Schedule 5.16(a), Schedule  5.16(b) or Schedule  5.16(c),
as applicable, upon the acquisition or formation by the Borrower of any
Subsidiary, the formation of any joint venture or partnership by the Borrower
or any of its Subsidiaries with any other Person or the acquisition by the
Borrower or any of its Subsidiaries of an equity interest of fifty percent
(50%) or less in any other Person, in each case in accordance with the
provisions of this Credit Agreement.

 

§6.          AFFIRMATIVE COVENANTS OF THE BORROWER.

 

The Borrower covenants and agrees that, so long as any
Loan or Letter of Credit is outstanding or any Lender has any obligation to
make any Loans or the Issuing Bank has any obligation to issue, extend or renew
any Letters of Credit:

 

61

 

§6.1.       Punctual Payment. 
The Borrower will duly and punctually pay or cause to be paid the
principal and interest on the Loans, the Facility Fee, the Utilization Fee, the
Letter of Credit Fees, the Administrative Agent Fees, all other fees and other
amounts provided for in this Credit Agreement and the other Loan Documents to
which the Borrower is a party, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.

 

§6.2.       Maintenance of Office.  The Borrower will maintain its chief
executive office in Framingham, Massachusetts, or at such other place in the
United States of America as the Borrower shall designate upon written notice to
the Administrative Agent, where notices, presentations and demands to or upon
the Borrower in respect of the Loan Documents to which the Borrower is a party
may be given or made.

 

§6.3.       Records and Accounts.  The Borrower will (a) keep, and cause each of
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with GAAP and
(b) maintain adequate accounts and reserves for all taxes, depreciation,
depletion, obsolescence and amortization of its properties and the properties
of its Subsidiaries, contingencies, and other reserves.

 

§6.4.       Financial
Statements, Certificates and Information.  The Borrower will deliver to the
Administrative Agent (and the Administrative Agent will promptly, after receipt
thereof, deliver to the Lenders):

 

(a)           as soon as practicable, but in any
event not later than ninety (90) days after the end of each fiscal year of the
Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such year, and the related consolidated statement
of income and consolidated statement of cash flow for such year, each setting
forth in comparative form the figures for the previous fiscal year and all such
consolidated statements to be in reasonable detail, prepared in accordance with
GAAP, and certified without qualification by Ernst & Young LLP, any
nationally recognized firm of independent certified public accountants or by
other independent certified public accountants reasonably satisfactory to the
Administrative Agent and (ii) a statement certified by the chief financial
officer or the treasurer of the Borrower in substantially the form of Exhibit F
attached hereto (a “Compliance  Certificate”) and setting forth in reasonable
detail computations evidencing compliance with the covenants contained in §8
hereof, a calculation of the Obligor Group Requirement and (if applicable)
reconciliations to reflect changes in GAAP since the Balance Sheet Date;

 

(b)           as soon as practicable, but in any
event not later than forty-five (45) days after the end of each of the first
three fiscal quarters of each fiscal year of the Borrower, (i) copies of the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such quarter, and the related consolidated statement of income and
consolidated statement of cash flow for the portion of the Borrower’s fiscal
year then elapsed, all in reasonable detail and prepared in accordance with
GAAP, together with a certification by the chief financial officer or the
treasurer of the Borrower

 

62

 

that to the best of the Borrower’s knowledge, the information contained
in such financial statements fairly presents the financial position of the
Borrower and its Subsidiaries on the date thereof (subject to year-end
adjustments) and (ii) a Compliance Certificate as of such fiscal quarter end;

 

(c)           from time to time such other
financial data and information as the Administrative Agent or any Lender may
reasonably request;

 

(d)           (i) promptly upon becoming aware of
the occurrence of any actual or claimed “Event
of  Termination”
or similar event under and as defined in any of the documents relating to any
receivables securitization transaction or other financing of any special
purpose receivables Subsidiary of the Borrower, entered into or guaranteed by
the Borrower and/or any of its Subsidiaries and then in effect, notice thereof,
which notice shall describe such Event of Termination or similar event and
indicate what steps the Borrower and its Subsidiaries are taking to remedy the
same and (ii) promptly upon request therefor, such other information with
respect thereto as the Administrative Agent shall reasonably request; and

 

(e)           promptly after the same are
available, copies of each annual report, proxy or financial statement or other
report or communication sent to the stockholders of the Borrower, and copies of
all annual, regular, periodic and special reports and registration statements
which the Borrower may file or be required to file with the Securities 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.

 

All Confidential Information concerning the Borrower
supplied by the Borrower to the Lenders pursuant to the terms hereof will be
held in confidence by the Lenders and the Lenders shall not disclose such Confidential
Information except as permitted by §25 of this Credit Agreement.

 

Documents required to be
delivered pursuant to this §6.4 (to the extent any such documents are included
in materials otherwise filed with the United States Securities and Exchange
Commission) may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto on the Borrower’s website on the Internet
at staples.com; or (ii) on which such documents are posted on the Borrower’s
behalf on an Internet or intranet website, if any, to which each Lender, the
Issuing Bank and the Administrative Agent has access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that: (i) the Borrower shall deliver paper copies of such documents to the
Administrative Agent, the Issuing Bank or any Lender that requests in writing
that the Borrower deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent, the Issuing Bank
or such Lender and (ii) the Borrower shall notify the Administrative Agent (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e.,
soft copies) of such

 

63

 

documents.  Notwithstanding
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance Certificates required by §§6.4(a) and
(b) to the Administrative Agent.  Except
for such Compliance Certificates, the Administrative Agent shall have no
obligation to request the delivery or to maintain copies of the documents referred
to above, and in any event shall have no responsibility to monitor compliance
by the Borrower with any such request for delivery, and each Lender and the
Issuing Bank shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.

 

The Borrower hereby
acknowledges that (i) the Administrative Agent and/or the Arranger will make
available to the Lenders and the Issuing Bank materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another
similar electronic system (the “Platform”) and (ii) certain of the
Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with
respect to the Borrower or its securities) (each, a “Public  Lender”).  The Borrower hereby agrees that (A) all
Borrower Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” by the Borrower which, at a minimum,
shall mean that the word “PUBLIC” shall appear prominently on the first page
thereof; (B) by marking Borrower Materials “PUBLIC,” the Borrower shall be
deemed to have authorized the Administrative Agent, the Arranger, the Issuing
Bank and the Lenders to treat such Borrower Materials as either publicly
available information or not material information (although it may be sensitive
and proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws; (C) all Borrower Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Investor;” and (D) the Administrative Agent and the
Arranger shall treat any Borrower Materials that are not marked “PUBLIC” as
being suitable only for posting on a portion of the Platform not designated “Public
Investor” and the Administrative Agent, the Issuing Bank and the Lenders agree
not to trade securities on the basis of any Borrower Materials that are posted
on the Platform and are not marked “PUBLIC.”

 

§6.5.       Notices.  The Borrower will promptly notify the
Administrative Agent for the benefit of the Lenders in writing of the
occurrence of any Default or Event of Default. 
The Borrower will promptly give notice to the Administrative Agent for
the benefit of the Lenders (a) of any material violation of any Environmental
Law that the Borrower or any of its Subsidiaries reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or local
environmental agency, (b) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential environmental liability, or any federal, state or local
environmental agency or board, that has the potential to materially affect the
assets, liabilities, financial conditions or operations of the Borrower, (c)
upon becoming aware thereof, of any inquiry, proceeding, investigation, or
other action, including a notice from any agency of potential ERISA liability,
that has the potential to materially affect the assets, liabilities, financial
conditions or operations of the Borrower and (d) of any material change in accounting

 

64

 

policies or financial reporting practices by the Borrower or any
Subsidiary of the Borrower.  The Borrower
will give notice to the Administrative Agent for the benefit of the Lenders in
writing within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting the Borrower or any of its Subsidiaries or to which the Borrower or
any of its Subsidiaries is or becomes a party involving an uninsured claim
against the Borrower or any of its Subsidiaries that could reasonably be
expected to have a materially adverse effect on the Borrower and its
Subsidiaries taken as a whole and stating the nature and status of such litigation
or proceedings.  The Borrower will, and
will cause each of its Subsidiaries to, give notice to the Administrative Agent
for the benefit of the Lenders, in writing, in form and detail satisfactory to
the Administrative Agent, within ten (10) days of any judgment not covered by
insurance, final or otherwise, against the Borrower or any of its Subsidiaries
in an amount in excess of $25,000,000.

 

§6.6.       Legal
Existence; Maintenance of Properties.  The Borrower will do or cause to be done all
things necessary to preserve and keep in full force and effect its legal
existence, rights and franchises and those of its Subsidiaries and will not,
and will not cause or permit any of the Guarantors to, convert to a limited
liability company or a limited liability partnership unless simultaneously with
such conversion the Borrower or such Guarantor shall have executed and
delivered to the Administrative Agent all documentation which the
Administrative Agent reasonably determines is necessary to continue the
Borrower’s or such Guarantor’s obligations in respect of this Credit Agreement
or the Guaranty, as applicable.  It (a)
will cause all of its properties and those of its Subsidiaries used or useful
in the conduct of its business or the business of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment, (b) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (c) will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses;
provided that nothing in this §6.6 shall prevent the Borrower from
discontinuing the operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its or their business and does not in the aggregate
materially adversely affect the business of the Borrower and its Subsidiaries
on a consolidated basis.

 

§6.7.       Insurance. 
The Borrower will, and will cause each of its Subsidiaries to, maintain
with financially sound and reputable insurers insurance with respect to its
properties and business against such casualties and contingencies as shall be
in accordance with the general practices of businesses engaged in similar activities
in similar geographic areas and in amounts, containing such terms, in such
forms and for such periods as may be reasonable and prudent.  At the request of the Administrative Agent,
the Borrower shall deliver from time to time a summary schedule indicating all
insurance then in force with respect to the Borrower and its Subsidiaries.

 

65

 

§6.8.       Taxes.  The
Borrower will, and will cause each of its Subsidiaries to, duly pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all taxes, assessments and other governmental charges imposed upon it
and its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge upon any of its
property; provided that any such tax, assessment, charge, levy or claim need
not be paid if the validity or amount thereof shall currently be contested in
good faith by appropriate proceedings and if the Borrower or such Subsidiary
shall have set aside on its books adequate reserves with respect thereto; and
provided further that the Borrower and each Subsidiary of the Borrower will pay
all such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor or shall have obtained such bonding as may be required to
release such lien.

 

§6.9.       Inspection of
Properties and Books, Etc. 
The Borrower shall permit the Lenders, through the Administrative Agent
or any of the Lenders’ other designated representatives, no more frequently
than once each calendar year, or more frequently as determined by the Lenders
upon the occurrence and during the continuance of an Event of Default, to visit
and inspect any of the properties of the Borrower or any of its Subsidiaries,
and each such inspection, if no Event of Default has occurred and is
continuing, shall be at the Lenders’ expense. 
The Borrower shall also permit the Lenders, through the Administrative
Agent or any of the Lenders’ other designated representatives, to examine the
books of account of the Borrower and its Subsidiaries (and to make copies
thereof and extracts therefrom), and to discuss the affairs, finances and
accounts of the Borrower and its Subsidiaries with, and to be advised as to the
same by, its and their officers, all at such reasonable times and intervals as
the Administrative Agent or any Lender may reasonably request.  The Borrower authorizes the Administrative
Agent and, if accompanied by the Administrative Agent, the Lenders to
communicate directly with the Borrower’s independent certified public
accountants and authorizes such accountants to disclose to the Administrative
Agent and the Lenders any and all financial statements and other supporting
financial documents and schedules with respect to the business, financial
condition and other affairs of the Borrower or any of its Subsidiaries.

 

§6.10.     Compliance with
Laws, Contracts, Licenses, and Permits.  The Borrower will, and will cause each of its
Subsidiaries to, comply with (a) the applicable laws and regulations wherever
its business is conducted, including all Environmental Laws, (b) the provisions
of its charter documents and by-laws (or equivalent constitutive documents),
(c) all agreements and instruments by which it or any of its properties may be
bound and (d) all applicable decrees, orders, and judgments, in each case if
noncompliance with which would have a material adverse effect on the business,
assets or financial condition of the Borrower and its Subsidiaries, taken as a
whole, or on the ability of the Borrower or any of the Guarantors to fulfill
its obligations under this Credit Agreement or any of the other Loan Documents
to which such Person is a party.  If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the

 

66

 

Borrower may fulfill any of its obligations hereunder or any of the
other Loan Documents to which the Borrower is a party, the Borrower will, or
(as the case may be) will cause such Subsidiary to, immediately take or cause
to be taken all reasonable steps within the power of the Borrower or such
Subsidiary to obtain such authorization, consent, approval, permit or license
and furnish the Administrative Agent and the Lenders with evidence thereof.

 

§6.11.     Employee Benefit Plans.  The Borrower will (a) promptly upon request
of the Administrative Agent, furnish to the Administrative Agent a copy of the
most recent actuarial statement required to be submitted under §103(d) of ERISA
and Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (b) promptly upon receipt or dispatch, furnish to
the Administrative Agent any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under §§302, 4041, 4042, 4043, 4063, 4065,
4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under §§4041A,
4202, 4219, 4242, or 4245 of ERISA.

 

§6.12.     Use of Proceeds.  The Borrower will use the proceeds of the
Revolving Credit Loans and the Letters of Credit solely for the repayment of
all amounts under the Existing Credit Agreement and other existing Indebtedness
(unless repayment or prepayment thereof is otherwise prohibited hereunder), and
for working capital and capital expenditures and all other lawful corporate
purposes, including, without limitation, for the payment of dividends permitted
hereunder and for the acquisition of assets and or Capital Stock of Persons in
the same line of business as the Borrower or any Subsidiary of the Borrower and
for share repurchases, in each case, to the extent permitted under this Credit
Agreement.

 

§6.13.     Licenses and Permits.  The Borrower will maintain and renew any and
all licenses or permits now held or hereafter acquired by the Borrower or any
of its Subsidiaries unless the loss, suspension, revocation or failure to renew
any such licenses or permits would not have a material adverse effect on the
business or financial condition of the Borrower and such Subsidiary.

 

§6.14.     Guaranties.  In the
event that any Subsidiary of the Borrower, which is not a Guarantor hereunder,
becomes a guarantor of any of the Borrower’s publicly issued notes or bonds
outstanding from time to time, the Borrower shall cause such Subsidiary to
become a Guarantor hereunder pursuant to §4.14.

 

§6.15.     Further Assurances.  The Borrower will, and will cause each of the
Guarantors to, cooperate with the Lenders and the Administrative Agent and
execute such further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Credit Agreement and the
other Loan Documents.

 

67

 

§7.          CERTAIN NEGATIVE
COVENANTS OF THE BORROWER.

 

The
Borrower covenants and agrees that, so long as any Loan or Letter of Credit is
outstanding or any Lender has any obligation to make any Loans or the Issuing
Bank has any obligation to issue, extend or renew any Letter of Credit:

 

§7.1.       Restrictions on Indebtedness. 
The Borrower will not, and will not permit any of its Subsidiaries to,
create, incur, assume, guarantee or become or remain liable, contingently or
otherwise, with respect to Indebtedness other than:

 

(a)           Indebtedness to the Lenders and the
Administrative Agent arising under any of the Loan Documents;

 

(b)           current liabilities of the Borrower
or such Subsidiary incurred in the ordinary course of business not incurred
through (i) the borrowing of money, or (ii) the obtaining of credit except for
credit on an open account basis customarily extended and in fact extended in
connection with normal purchases of goods and services;

 

(c)           Indebtedness in respect of taxes,
assessments, governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be required
to be made in accordance with the provisions of §6.8 hereof;

 

(d)           Indebtedness in respect of judgments
or awards that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in respect of
which the Borrower or such Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which a stay
of execution shall have been obtained pending such appeal or review;

 

(e)           endorsements
for collection, deposit or negotiation and warranties of products or services,
in each case incurred in the ordinary course of business;

 

(f)            Indebtedness in respect of
documentary letters of credit issued in the ordinary course of business;

 

(g)           Indebtedness of the Borrower in
respect of interest rate protection arrangements and exchange rate protection
arrangements;

 

(h)           Indebtedness existing on the Closing
Date and listed and described on Schedule 7.1 hereto or any
refinancing thereof on substantially similar terms as the Indebtedness being
refinanced;

 

(i)            Subordinated Debt;

 

(j)            obligations
under Capitalized Leases;

 

68

 

(k)           Indebtedness in respect of
intercompany loans, guaranties and, so long as no Default or Event of Default
shall have occurred and be continuing at the time such Indebtedness is
incurred, other Investments and contingent obligations to make Investments, (i)
from the Borrower to any of its Subsidiaries or of any of its Subsidiaries’
obligations or (ii) between Subsidiaries of the Borrower or of any of the
Borrower’s Subsidiaries’ obligations, or (iii) from any Subsidiary of the
Borrower to the Borrower or of any of the Borrower’s obligations;

 

(l)            Indebtedness incurred in connection
with the acquisition after the Closing Date of any real or personal property by
the Borrower or any Subsidiary of the Borrower as contemplated by §7.2(ix)
hereof;

 

(m)          Indebtedness secured by a lien on Real
Estate of the Borrower or its Subsidiaries; provided that the aggregate amount
of Indebtedness permitted pursuant to this §7.1(m) shall not, at any time,
exceed the fair market value of the Real Estate securing such Indebtedness;

 

(n)           other Indebtedness of the Borrower
and its Subsidiaries (whether or not such Subsidiaries are Guarantors), provided that (i) with respect to Indebtedness
incurred by the Borrower or a Guarantor, such Indebtedness contains covenants
that are no more restrictive on the Borrower or such Guarantor than the
covenants contained in this Credit Agreement and (ii) immediately after such
incurrence of Indebtedness, and after giving effect thereto on a pro forma basis, no Default or Event of Default shall then
exist;

 

(o)           Indebtedness consisting of
Investments permitted under §7.3(m) hereof;

 

(p)           Indebtedness payable at the election
of the Borrower by the issuance of the Borrower’s capital stock; and

 

(q)           Indebtedness
of the Borrower and its Subsidiaries in respect of receivables securitization
transactions or other financing of any special purpose receivables Subsidiary
of the Borrower, entered into or guaranteed by the Borrower and/or any of its
Subsidiaries; provided that, the aggregate amount of all such
Indebtedness shall not exceed $300,000,000 outstanding at any time.

 

Notwithstanding the foregoing, at no time shall the
aggregate amount of Indebtedness of the Borrower and its Subsidiaries
consisting of guaranties and other Contingent Liabilities (excluding (i)
Indebtedness permitted pursuant to §7.1 to the extent such Indebtedness (or if
such Indebtedness is a Contingent Liability of the Borrower and/or its
Subsidiaries, the underlying Indebtedness relating to such Contingent
Liability) is included in the calculation of Consolidated Total Funded Debt and
(ii) obligations in respect of documentary letters of credit) exceed, in the
aggregate, 15% of the Stockholders’ Equity of the Borrower at such time.  For purposes of this Section, the amount of
Contingent Liabilities in respect of interest rate protection arrangements and
exchange rate protection arrangements permitted under §7.1(g) at any time shall
be the

 

69

 

net liability of the Borrower and
its Subsidiaries under such arrangements at such time, calculated on a basis
satisfactory to the Administrative Agent in accordance with accepted practice.

 

§7.2.       Restrictions on Liens.  The Borrower will not, and will not permit
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency under the laws of the United States of
America or any state thereof, or otherwise, be given any priority whatsoever
over its general creditors; or (e) sell, assign, pledge or otherwise transfer
any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; provided that the Borrower and any
Subsidiary of the Borrower may create or incur or suffer to be created or
incurred or to exist:

 

(i)            liens
in favor of the Borrower on all or part of the assets of Subsidiaries of the
Borrower securing Indebtedness owing by Subsidiaries of the Borrower to the
Borrower;

 

(ii)           liens
to secure taxes, assessments and other government charges and liens to secure
claims for labor, material or supplies, in each case in respect of obligations
not overdue or which are being contested in good faith and by appropriate
proceedings and for which the Borrower or such Subsidiary has set aside on its
books adequate reserves with respect thereto;

 

(iii)          deposits
or pledges made in connection with, or to secure payment of, worker’s
compensation, unemployment insurance, old age pensions or other social security
obligations;

 

(iv)          liens
in respect of judgments or awards that have been in force for less than the
applicable period for taking an appeal so long as execution is not levied
thereunder or in respect of which the Borrower or such Subsidiary is at the
time in good faith prosecuting an appeal and in respect of which a stay of
execution shall have been obtained pending such appeal or shall have obtained
an unsecured bond sufficient to release such lien;

 

(v)           liens of carriers, warehousemen, mechanics and materialmen,
and other like liens, in respect of obligations not overdue or, if such obligations
are overdue, being contested in good faith by appropriate proceedings and

 

70

 

for
which the Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto, provided that no proceeding to
foreclose any such lien shall have been commenced;

 

(vi)          encumbrances
on Real Estate consisting of easements, rights of way, zoning restrictions,
restrictions on the use of real property and defects and irregularities in the
title thereto, landlord’s or lessor’s liens under Capitalized Leases to which
the Borrower or a Subsidiary of the Borrower is a party, and other minor liens
or encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary conduct of the
business of the Borrower and its Subsidiaries, which defects do not
individually or in the aggregate have a materially adverse effect on the
business of the Borrower individually or of the Borrower and its Subsidiaries
on a consolidated basis;

 

(vii)         liens existing on the Closing Date and listed on Schedule
7.2 attached hereto or liens on the same assets in connection with the
refinancing of such existing liens;

 

(viii)        liens
arising in the ordinary course of business of the Borrower or a Subsidiary of
the Borrower none of which in the opinion of the Borrower interferes materially
with the use of the property affected in the ordinary course of business of the
Borrower and its Subsidiaries and which do not, individually or in the
aggregate, have a materially adverse effect on the business of the Borrower or
such Subsidiary individually or of the Borrower and its Subsidiaries on a
consolidated basis;

 

(ix)           purchase
money security interests in or purchase money mortgages on real or personal
property acquired after the Closing Date to secure purchase money Indebtedness
of the type permitted by §7.1(l) hereof, incurred in connection with the
acquisition of such property, which security interests or mortgages cover only
the real or personal property so acquired;

 

(x)            liens on accounts receivable of the Borrower and/or its
Subsidiaries that are the subject of and secure the Indebtedness permitted
under §7.1(q);

 

(xi)           liens securing other permitted Indebtedness that does not
exceed $50,000,000 in the aggregate;

 

(xii)          liens in respect of the interests of lessors under
Capitalized Leases; and

 

(xiii)         liens on Real Estate securing Indebtedness permitted under
§7.1(m) hereof.

 

§7.3.       Restrictions on Investments. 
The Borrower will not, and will not permit any of its Subsidiaries to,
make or permit to exist or to remain outstanding any Investment except
Investments in:

 

71

 

(a)           marketable
direct or guaranteed obligations of the United States of America or any country
which is a member of the OECD;

 

(b)           demand deposits, certificates of
deposit, bankers acceptances and time deposits of (i) United States or Canadian
banks having total assets in excess of $1,000,000,000 or (ii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of such
country, and having total assets in excess of $1,000,000,000, provided that
such bank is acting through a branch or agency located in the country in which
its is organized or another country which is a member of the OECD;

 

(c)           (i) securities commonly known as “commercial
paper” denominated in Dollars or any Alternative Currency which at the time of
purchase have been rated and the ratings for which are not less than “P 1”
if rated by Moody’s, and not less than “A 1” if rated by S&P; and (ii)
securities commonly known as “short-term bank notes” issued by any Lender
denominated in Dollars or any Alternative Currency which at the time of
purchase have been rated and the ratings for which are not less than “P 2”
if rated by Moody’s, and not less than “A 2” if rated by S&P;

 

(d)           Investments existing on the Closing
Date and listed on Schedule 7.3 attached hereto;

 

(e)           Investments with respect to
Indebtedness permitted by §7.1(k) hereof so long as such entities remain
Subsidiaries of the Borrower;

 

(f)            taxable or tax-exempt securities
which at the time of purchase have been rated and the ratings for which are not
less than A 3 if rated by Moody’s, and not less than A- if rated by
S&P;

 

(g)           Investments consisting of loans and
advances to employees of the Borrower or any Subsidiary of the Borrower, not
exceeding $10,000,000 in the aggregate at any one time outstanding;

 

(h)           options to
invest in or to lease real property to be used in the operations of the
Borrower or any Subsidiary of the Borrower;

 

(i)            guaranties
by endorsement of negotiable instruments for deposit or collection or similar
transactions effected in the ordinary course of business;

 

(j)            (i) the
Borrower’s or any Subsidiary’s guaranty of the Indebtedness of any Subsidiary
or the Borrower, and (ii) any other Investments by the Borrower or any
Subsidiary of the Borrower in any Subsidiary of the Borrower or the Borrower;

 

(k)           Investments by the Borrower or any
Subsidiary of the Borrower to acquire a more than fifty percent (50%) equity
interest in any Person, provided that such acquisition is permitted under §7.6
hereof;

 

72

 

(l)            Investments by the Borrower or any
Subsidiary of the Borrower to acquire up to a fifty percent (50%) equity
interest in another Person, provided that (i) such Person is in the same line
of business as the Borrower or such Subsidiary, as applicable, (ii) the
aggregate amount of (A) such Investments in such Person and (B) existing
Investments made by the Borrower or any Subsidiary of the Borrower pursuant to
this §7.3(l) shall at no time exceed 65% of the Stockholders’ Equity of the
Borrower, and (iii) the consideration for such interest shall be the exchange
by the Borrower or such Subsidiary of a certain number of shares of the
Borrower’s common stock for equity securities of the other Person and/or the
payment in cash in an aggregate cash amount for any such Investment not to
exceed $200,000,000;

 

(m)          Investments consisting of
Distributions permitted by §7.4;

 

(n)           Investments
consisting of loans and advances to, guaranties of the obligations of and
equity Investments in, Persons in a related line of business as the Borrower,
not exceeding $25,000,000 in the aggregate at any one time outstanding;

 

(o)           shares
of money market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) (b), (c) and (f) contained in this
§7.3; and

 

(p)           shares
of money market mutual or similar funds which have an Aaa or MR1+ money market
fund rating from Moody’s or an AAA money market fund rating from S&P.

 

§7.4.       Distributions. 
The Borrower will not declare any dividend or make any Distribution if
any Default or Event of Default has occurred and is continuing or would result
after giving effect to such Distribution.

 

§7.5.       Employee Benefit Plans.  Neither the Borrower nor any ERISA Affiliate will:
(a) engage in any “prohibited  transaction” within the meaning of §406 of
ERISA or §4975 of the Code which could result in a material liability for the
Borrower or any of its Subsidiaries; or (b) permit any Guaranteed Pension Plan
to incur an “accumulated  funding  deficiency”,
as such term is defined in §302 of ERISA, whether or not such deficiency is or
may be waived; or (c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the Borrower
or any of its Subsidiaries pursuant to §302(f) or §4068 of ERISA; or (d) amend
any Guaranteed Pension Plan in circumstances requiring the posting of security
pursuant to §307 of ERISA or §401(a)(29) of the Code; or (e) permit or take any
action which would result in the aggregate benefit liabilities (with the
meaning of §4001 of ERISA) of all Guaranteed Pension Plans exceeding the value
of the aggregate assets of such Plans, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in excess of
benefit liabilities.

 

§7.6.       Merger
and Consolidation; Acquisitions.  The Borrower will not, and will not permit
any of its Subsidiaries to, merge or consolidate with any other Person;

 

73

 

enter into any stock or asset acquisitions (other than the acquisition
of assets in the ordinary course of such Person’s business and other than the
acquisition of stock permitted under §7.3(j) or §7.3(l) hereof); enter into any
joint venture or partnerships (except to the extent permitted under §7.3
hereof); or enter into any new lines of business or otherwise change the
conduct of the Borrower’s or such Subsidiary’s business as presently conducted
other than (a) the merger or consolidation of one or more Subsidiaries of the
Borrower with and into the Borrower, provided that the Borrower is the
surviving entity, (b) the merger or consolidation of two or more Subsidiaries
of the Borrower, provided that, if one of the Subsidiaries is a Guarantor, that
the Guarantor is the surviving entity, or (c) the acquisition (whether of stock
or assets or by means of a merger) of (i) a more than fifty percent (50%)
equity interest in any other Person or (ii) assets of any other Person; provided
that (A) immediately after such acquisition, and after giving effect thereto on
a pro forma basis, no Default or Event of
Default shall then exist, (B) if required by applicable law, the board of
directors and the shareholders or the equivalent, of such other Person has
approved such acquisition, (C) such other Person is in the business of selling
office services, products and/or supplies, and (D) if the Borrower or a
Guarantor and such other Person merge, the Borrower or such Guarantor is the
surviving entity.

 

§7.7.       Disposition
of Assets and Sale-Leaseback Transactions.  The Borrower will not, and will not permit
any of its Subsidiaries to, dispose of or sell assets other than:

 

(a)           the disposition
of assets in the ordinary course of business;

 

(b)           sale-leaseback transactions and other
dispositions of assets that do not have a materially adverse effect on the
business, assets or financial condition of the Borrower or any of its
Subsidiaries, provided that (i) the aggregate net book value of the assets to
be sold plus the net book value of all other assets of the Borrower and its
Subsidiaries sold under this clause (b) during the period of time from the
Closing Date through the date of such sale does not, at the time of such sale,
exceed 25% of the Consolidated Total Assets of the Borrower and its
Subsidiaries, (ii) such assets are sold in an arm’s length transaction for fair
market value (after giving effect to all tax benefits, if any, associated with
such sale), and (iii) the Borrower shall, if an Event of Default exists or
would result from such sale, prepay the Revolving Credit Loans by an amount
equal to (A) 50% of the amount by which the aggregate net sale proceeds of all
assets sold pursuant to this clause (b) exceeds $20,000,000 but is less than or
equal to $50,000,000 plus (B) 100% of the amount by which the aggregate net
sale proceeds of all assets sold pursuant to this clause (b) exceeds
$50,000,000; and

 

(c)           the sale of
accounts receivable of the Borrower and/or its Subsidiaries pursuant to the
transactions permitted under §7.1(q).

 

§7.8.       Subordinated Debt.  The Borrower will not effect or permit any
change in or amendment to any document or instrument pertaining to the
subordination, covenants, events of default, terms of payment or required
prepayments of any Subordinated Debt, give any notice of redemption or
prepayment or offer to repurchase

 

74

 

under any such document or instrument or, directly or indirectly, make
any payment of principal of or interest on or in redemption, retirement or
repurchase of any Subordinated Debt, except that (a) the Borrower may make
regularly scheduled payments when required by the terms of the Subordinated Debt,
and (b) the Borrower may refinance all or a portion of the Subordinated Debt so
long as such refinancing Subordinated Debt (i) has a maturity that is no
earlier than the Subordinated Debt being refinanced and (ii) is subordinated to
the Obligations on terms at least as favorable to the Administrative Agent and
the Lenders, in the opinion of the Administrative Agent and the Required
Lenders, as the Subordinated Debt being refinanced.

 

§7.9.       Transactions with Affiliates. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any transaction of any kind with any
Affiliate of the Borrower (excluding transactions between the Borrower and any
of its Subsidiaries and transactions between any Subsidiary of the Borrower and
any other Subsidiary of the Borrower), whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm’s length transaction with a Person
other than an Affiliate.

 

§8.          FINANCIAL COVENANTS OF
THE BORROWER.

 

The
Borrower covenants and agrees that, so long as any Loan or Letter of Credit is
outstanding or any Lender has any obligation to make any Loans or the Issuing
Bank has any obligation to issue, extend or renew any Letter of Credit:

 

§8.1.       Fixed Charge Coverage Ratio. 
As at the end of each fiscal quarter of the Borrower, the Borrower will
not permit the ratio (the “Fixed  Charge  Coverage
Ratio”) of (a) the sum of (i) Consolidated
EBIT for the period of the four consecutive fiscal quarters (the “Measurement  Period”)
ending on such date plus (ii) the Rental Expense for such Measurement Period,
to (b) the sum of (i) the Consolidated Total Interest Expense for such
Measurement Period plus (ii) the Rental Expense for such Measurement Period, to
be less than 1.50 to 1.

 

§8.2.       Adjusted
Funded Debt to Total Capitalization Ratio.  As at the end of each fiscal quarter of the
Borrower, the Borrower will not permit the ratio of (a) Consolidated Adjusted
Funded Debt as at such date to (b) the sum of (i) Consolidated Adjusted Funded
Debt as at such date plus (ii) Stockholders’ Equity as of such date, to be
greater than 0.75 to 1.

 

§9.          CLOSING CONDITIONS.

 

The
obligations of the Lenders to make the initial Loans and the Issuing Bank to
issue the initial Letter of Credit (if issued on the Closing Date) shall be
subject to the satisfaction of the following conditions precedent:

 

§9.1.       Loan Documents.  Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect

 

75

 

and shall be in form and
substance satisfactory to each of the Lenders.  The Administrative Agent shall have received a
fully executed counterpart of each such document.

 

§9.2.       Certified
Copies of Charter Documents.  The Administrative Agent shall have received
from the Borrower and each of the Guarantors a copy, certified by a duly
authorized officer of such Person to be true and complete on the Closing Date,
of each of (a) its charter or other incorporation documents (or the equivalent
constitutive documents) as in effect on such date of certification, and (b) its
by-laws or the equivalent constitutive documents as in effect on such date.

 

§9.3.       Corporate Action.  All corporate (or other) action necessary for
the valid execution, delivery and performance by the Borrower and each of the
Guarantors of this Credit Agreement and the other Loan Documents to which it is
or is to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Lenders shall have been provided to the
Administrative Agent.

 

§9.4.       Incumbency Certificate. 
The Administrative Agent shall have received from the Borrower and each
of the Guarantors an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of the Borrower and each Guarantor, as
applicable, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and to the benefit
of each of the Borrower and the Guarantors, each of the Loan Documents; (b)
with respect to the Borrower, to make Loan Requests, Conversion Requests, Swing
Line Loan Requests and Notices of Competitive Bid Borrowing; and (c) to give
notices and to take other action on its behalf under the Loan Documents.

 

§9.5.       Opinion of Counsel.  The Administrative Agent shall have received
favorable legal opinions addressed to the Lenders and the Administrative Agent,
dated as of the Closing Date, in form and substance satisfactory to the Lenders
and the Administrative Agent, from (a) Jack A. VanWoerkom Esq., general counsel
to the Borrower and the Guarantors and (b) Wilmer Cutler Pickering Hale and
Dorr LLP, special counsel to the Borrower and the Guarantors.

 

§9.6.       Payment of Fees.  The Borrower shall have paid to the
Administrative Agent and the Arranger, as appropriate, the Administrative Agent
Fees, the Closing Fee and all other fees and expenses (including without
limitation all reasonable legal fees and disbursements of the Administrative
Agent’s Special Counsel) required to be paid by it on or prior to the Closing
Date.

 

§9.7.       Termination
of Existing Credit Agreement.  The Borrower shall have repaid all principal,
interest and fees owing, and shall have terminated the commitments under, the
Existing Credit Agreement and the Administrative Agent shall have received
evidence thereof in form and substance satisfactory to it.

 

76

 

§9.8.       Compliance Certificate.  The Borrower shall have delivered to the
Lenders a Compliance Certificate, dated as of the Closing Date, and based on
the financial statements of the Borrower for the fiscal quarter ended October
30, 2004.

 

§9.9.       UCC Search Results.  The Administrative Agent shall have received
the results of UCC searches (and the equivalent thereof in all applicable
foreign jurisdictions), indicating no Liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Administrative Agent.

 

§9.10.     Certificate of Insurance. 
The Administrative Agent shall have received a certificate of insurance,
dated no earlier than December 13, 2004, from an independent insurance broker
dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance of
the Borrower and its Subsidiaries.

 

§9.11.     No Material Adverse Change.  The Administrative Agent shall be satisfied
that there shall have occurred no material adverse
change in the business, operations, liabilities (actual or contingent) assets,
properties or condition of the Borrower or its Subsidiaries since the Balance
Sheet Date.

 

§10.        CONDITIONS
TO ALL BORROWINGS.

 

The obligations of the Lenders to make any Loan and
the Issuing Bank to issue, extend, renew or amend any Letter of Credit, in each
case whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:

 

§10.1.     Representations
True; No Event of Default. 
Each of the representations and warranties of any of the Borrower and
its Subsidiaries contained in this Credit Agreement, the other Loan Documents
or in any document or instrument delivered pursuant to or in connection with
this Credit Agreement (excluding, in the case of any loan or the issuance,
extension, renewal or amendment of any Letter of Credit at a time when the
Senior Debt Rating is at or above the Senior Debt Rating Threshold, the
representation and warranty contained in §5.5 hereof) shall be true as of the
date as of which they were made and shall also be true at and as of the time of
the making of such Loan or the issuance, renewal or extension of such Letter of
Credit, with the same effect as if made at and as of that time (except to the
extent of changes resulting from transactions contemplated or permitted by this
Credit Agreement and the other Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing.

 

§10.2.     No Legal Impediment. 
No change shall have occurred in any law or regulations thereunder or
interpretations thereof that in the reasonable opinion of any Lender would make
it illegal for such Lender to make such Loan or for the Issuing Bank to issue,
extend or renew such Letter of Credit.

 

77

 

§10.3.     Governmental Regulation. 
Each Lender shall have received such statements in substance and form
reasonably satisfactory to such Lender as such Lender shall require for the
purpose of compliance with any applicable regulations of the Comptroller of the
Currency or the Board of Governors of the Federal Reserve System.

 

§10.4.     Proceedings and Documents. 
All proceedings in connection with the transactions contemplated by this
Credit Agreement, the other Loan Documents and all other documents incident
thereto shall be reasonably satisfactory in substance and in form to the
Lenders and to the Administrative Agent and the Administrative Agent’s Special
Counsel, and the Lenders, the Administrative Agent and such counsel shall have
received all information and such counterpart originals or certified or other
copies of such documents as the Administrative Agent may reasonably request.

 

§10.5.     Alternative Currency. In the case of any Loan to be denominated
in an Alternative Currency, there shall not have occurred any change in
national or international financial, political or economic conditions or
currency exchange rates or exchange controls which in the reasonable opinion of
the Administrative Agent or the Required Lenders would make it impracticable
for such Loan to be denominated in the relevant Alternative Currency.

 

§11.        EVENTS
OF DEFAULT; ACCELERATION; ETC.

 

§11.1.     Events of Default and
Acceleration.  If any of the following events (“Events  of  Default” or, if the giving of notice or the
lapse of time or both is required, then, prior to such notice or lapse of time,
“Defaults”) shall occur and be continuing:

 

(a)           the Borrower shall fail to pay any
principal of the Loans when the same shall become due and payable, whether at
the stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;

 

(b)           the Borrower or any Guarantor shall
fail to pay any interest on the Loans, the Facility Fee, the Utilization Fees, the
Administrative Agent Fees, other fees or other sums due hereunder or under any
of the other Loan Documents, within five (5) Business Days of the date when the
same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment;

 

(c)           the Borrower
(i) shall fail to comply with any of its covenants contained in §§6.4, 6.5,
6.10, 7 or 8 hereof, or (ii) shall fail to comply with its covenant contained
in §6.6 hereof and such failure shall continue for thirty (30) days;

 

(d)           the Borrower
or any of its Subsidiaries shall fail to perform any term, covenant or
agreement contained herein or in any of the other Loan Documents (other than
those specified elsewhere in this §11.1) for thirty (30) days after written
notice of such failure has been given to the Borrower by the Administrative
Agent;

 

78

 

(e)           any material representation or
warranty of the Borrower or any of its Subsidiaries in this Credit Agreement or
any of the other Loan Documents or in any other document or instrument
delivered pursuant to or in connection with this Credit Agreement shall prove
to have been false in any material respect upon the date when made or deemed to
have been made or repeated;

 

(f)            the Borrower or any of its
Subsidiaries shall fail to pay when due, or within any applicable period of
grace, any obligation for borrowed money or credit received or in respect of
any Capitalized Leases or any obligations with respect to interest rate
protection arrangements or exchange rate protection arrangements which, in the
aggregate, represents Indebtedness (calculated, with respect to interest rate
protection arrangements and exchange rate protection arrangements based on the
notional principal amount thereof) of $50,000,000 or more, or fail to observe
or perform any material term, covenant or agreement contained in any agreement
by which it is bound, evidencing or securing borrowed money or credit received
or in respect of any Capitalized Leases or evidencing any interest rate
protection arrangement or exchange rate protection arrangement which in the
aggregate represents Indebtedness (calculated, with respect to interest rate
protection arrangements and exchange rate protection arrangements based on the
notional principal amount thereof) of $50,000,000 or more, and for such period
of time as would permit (assuming the giving of appropriate notice if required)
the holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof;

 

(g)           the Borrower or any of its
Subsidiaries shall make an assignment for the benefit of creditors, or admit in
writing its inability to pay or generally fail to pay its debts as they mature
or become due, or shall petition or apply for the appointment of a trustee or
other custodian, liquidator or receiver of the Borrower or any of its
Subsidiaries or of any substantial part of the assets of the Borrower or any of
its Subsidiaries or shall commence any case or other proceeding relating to the
Borrower or any of its Subsidiaries under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against the Borrower or any of its Subsidiaries and shall
not have been dismissed within sixty (60) days, or the Borrower or any of its
Subsidiaries shall indicate its approval thereof, consent thereto or
acquiescence therein;

 

(h)           a decree or order is entered
appointing any such trustee, custodian, liquidator or receiver or adjudicating
the Borrower or any of its Subsidiaries bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for relief
is entered in respect of the Borrower or any Subsidiary of the Borrower in an
involuntary case under federal bankruptcy laws as now or hereafter constituted;

 

(i)            there shall
remain in force, undischarged, unsatisfied and unstayed, for more than sixty
(60) days, whether or not consecutive, any final judgment against the Borrower
or any of its Subsidiaries that, with other outstanding final judgments,

 

79

 

undischarged, against the
Borrower or any of its Subsidiaries exceeds in the aggregate $25,000,000;

 

(j)            with respect to any Guaranteed
Pension Plan, an ERISA Reportable Event, or a failure to make a required
installment or other payment (within the meaning of §302(f)(1) of ERISA), shall
have occurred and the Required Lenders shall have determined in their
reasonable discretion that such event reasonably could be expected to result in
liability of the Borrower or any of its Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $10,000,000 and such
event in the circumstances occurring reasonably could constitute grounds for
the termination of such Guaranteed Pension Plan by the PBGC, for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan or for the imposition of a Lien in
favor of such Guaranteed Pension Plan; or a trustee shall have been appointed
by the United States District Court to administer such Plan; or the PBGC shall
have instituted proceedings to terminate such Guaranteed Pension Plan;

 

(k)           the holders of all or any part of the
Subordinated Debt shall accelerate the maturity of all or any part of the
Subordinated Debt or the Subordinated Debt shall be prepaid, redeemed or
repurchased in whole or in part, or an offer to prepay, redeem or repurchase
the Subordinated Debt in whole or in part shall have been made, in each case in
violation of the provisions of this Credit Agreement;

 

(l)            if any of the Loan Documents shall
be canceled, terminated, revoked or rescinded, in each case otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Lenders, or any action at law, suit or in equity or
other legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of the Borrower or any of its Subsidiaries
party thereto or any of their respective stockholders, or any court or any
other governmental or regulatory authority or agency of competent jurisdiction
shall make a determination that, or issue a judgment, order, decree or ruling
to the effect that, any one or more of the Loan Documents is illegal, invalid
or unenforceable in accordance with the terms thereof; or

 

(m)          a “Change  in  Control” shall have occurred (which for the
purposes of this subsection (m) shall mean the occurrence of any of the following
events):

 

(i)            the
acquisition by any Person (including any syndicate or group deemed to be a “person”
under Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended)
of beneficial ownership, directly or indirectly, through a purchase, merger or
other acquisition transaction or series of transactions, of shares of Capital
Stock of the Borrower entitling such Person to exercise 50% or more of the
total voting power of all shares of Capital Stock of the Borrower entitled to
vote generally in the elections of directors (any shares of voting stock of
which such person or group is the beneficial owner that are not then
outstanding being deemed outstanding for purposes of calculating such
percentage);

 

80

 

(ii)           any
consolidation of the Borrower with, or merger of the Borrower into, any other
Person, any merger of another Person into the Borrower, or any sale or transfer
of all or substantially all of the assets of the Borrower to another Person (other
than a transfer of assets to one or more Guarantors or a merger (A) which does
not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Capital Stock of the Borrower or (B) which is effected
solely to change the jurisdiction of incorporation of the Borrower); or

 

(iii)          during
any consecutive two-year period, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (together with any
new directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Borrower was approved by a vote of 66-2/3%
of the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Borrower then in office;

 

(n)           any of (i) the Borrower or any of its
Subsidiaries shall fail to make any payment under any transaction permitted under
§7.1(q) hereof when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise), and any
such failure shall continue after the applicable grace period, if any,
specified in the documents relating to such transaction, or (ii) the “Termination  Date”
or similar date (under and as defined in any of the documents relating to the
transactions permitted under §7.1(q) hereof) 
shall have been declared to have occurred, or (iii) any “Event  of  Termination” or similar event (under and as
defined in any of the documents relating to the transactions permitted under
§7.1(q) hereof) shall occur and continue after the applicable grace period, if
any, specified in such documents if either, pursuant to such documents, (A) the
existence of such Event of Termination or similar event would automatically
cause the Termination Date or similar date to occur or (B) the existence of
such Event of Termination or similar event would permit the purchaser or lender
under such documents to declare the Termination Date or similar date to have
occurred and such Event of Termination or similar event continues unremedied or
unwaived for a period of more than ninety (90) days after the date that the
Administrative Agent gives notice to the Borrower of such Event of Termination
or similar event; or

 

(o)           the Borrower and its Subsidiaries at
any time shall not be in compliance with the Obligor Group Requirement and such
failure continues for twenty (20) days following
the date on which a Compliance Certificate is to be delivered by the Borrower
pursuant to §§6.4(a) or (b) hereof, as applicable;

 

then, and in any such event, so long as the same may
be continuing, the Administrative Agent may, and upon the request of the
Required Lenders shall, by notice in writing to the Borrower declare all
amounts owing with respect to this Credit Agreement, the Letters of Credit and
the other Loan Documents and all Reimbursement Obligations to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby

 

81

 

expressly waived by the Borrower; provided that in the event of
any Event of Default specified in §§11.1(g) or 11.1(h) hereof, all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Administrative Agent or any Lender.

 

§11.2.     Termination of Commitments. 
If any one or more of the Events of Default specified in §§11.1(g) or
11.1(h) hereof shall occur, any unused portion of the credit hereunder shall
forthwith terminate and each of the Lenders shall be relieved of all further
obligations to make Loans to the Borrower and the Issuing Bank shall be
relieved of all further obligations to issue, extend or renew Letters of
Credit.  If any other Event of Default
shall have occurred and be continuing, the Administrative Agent may and, upon
the request of the Required Lenders, shall, by notice to the Borrower,
terminate the unused portion of the credit hereunder, and upon such notice
being given such unused portion of the credit hereunder shall terminate
immediately and each of the Lenders shall be relieved of all further
obligations to make Loans and the Issuing Bank shall be relieved of all further
obligations to issue, extend or renew Letters of Credit.  No termination of the credit hereunder shall
relieve the Borrower of any of the Obligations.

 

§11.3.     Remedies.  In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Lenders
shall have accelerated the maturity of the Loans pursuant to §11.1 hereof, each
Lender, if owed any amount with respect to the Loans or Letters of Credit may,
with the consent of the Required Lenders, but not otherwise, proceed to protect
and enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender. 
No remedy herein conferred upon any Lender or the Administrative Agent
or the holder of any Note is intended to be exclusive of any other remedy and
each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity
or by statute or any other provision of law.

 

§12.        SETOFF.

 

Regardless of the adequacy of any collateral, during
the continuance of any Event of Default, any deposits or other sums credited by
or due from any of the Lenders or any of the Subsidiaries of the holding
company owning such Lender to the Borrower and any securities or other property
of the Borrower in the possession of such Lender or such Subsidiary of the
holding company owning such Lender may be applied to or set off by such Lender
or such Subsidiary of the holding company owning such Lender against the
payment of Obligations and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, of the Borrower to such Lender. 
Each of the Lenders agrees with each other Lender that (a) if an amount
to be set off is to be applied to Indebtedness of the Borrower to such Lender,
other than

 

82

 

Indebtedness evidenced by the Credit Agreement or constituting
Reimbursement Obligations owed to such Lender, such amount shall be applied
ratably to such other Indebtedness (except that no amounts shall be applied to
documentary letters of credit) and to the Indebtedness evidenced by the Credit
Agreement or constituting Reimbursement Obligations owed to such Lender, and
(b) if such Lender shall receive from the Borrower, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Credit Agreement, or constituting
Reimbursement Obligations owed to, such Lender by proceedings against the
Borrower at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall
retain and apply to the payment of the Obligations held by such Lender any amount
in excess of its ratable portion of the payments received by all of the Lenders
with respect to the Loans made by, and Reimbursement Obligations owed to, all
of the Lenders, such Lender will make such disposition and arrangements with
the other Lenders with respect to such excess, either by way of distribution,
pro tanto assignment of claims, subrogation or otherwise as shall result in
each Lender receiving in respect of the Loans made by it or Reimbursement
Obligations owed it, its proportionate payment as contemplated by this Credit
Agreement; provided that if all or any part of such excess payment is
thereafter recovered from such Lender, such disposition and arrangements shall
be rescinded and the amount restored to the extent of such recovery, but
without interest.

 

§13.        THE
ADMINISTRATIVE AGENT.

 

§13.1.     Authorization.

 

(a)           Each of the Lenders hereby
irrevocably appoints Bank of America to act on its behalf as administrative
agent hereunder and under the other Loan Documents. The Administrative Agent is
authorized to take such action on behalf of each of the Lenders and to exercise
all such powers as are hereunder and under any of the other Loan Documents and
any related documents delegated to the Administrative Agent, together with such
powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied to
have been assumed by the Administrative Agent.

 

(b)           The relationship between the
Administrative Agent and the Lenders is and shall be that of an independent
contractor.  The use of the term “Administrative
Agent” herein is for convenience only and is used to describe, as a form of
convention, the independent contractual relationship between the Administrative
Agent and each of the Lenders.  Nothing
contained in this Credit Agreement or any of the other Loan Documents shall be
construed to create an agency, trust or other fiduciary relationship between
the Administrative Agent and any of the Lenders.

 

(c)           As an independent contractor
empowered by the Lenders to exercise certain rights and perform certain duties
and responsibilities hereunder and under the other Loan Documents, the
Administrative Agent is nevertheless a “representative” of the Lenders, as that
term is defined in Article 1 of the Uniform

 

83

 

Commercial Code, for purposes of actions for the
benefit of the Lenders with respect to all collateral security and guaranties
contemplated by the Loan Documents.  Such actions include the designation of the
Administrative Agent as “secured  party”, “mortgagee”,
“lienholder” or the like on all financing
statements, motor vehicle titles and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority or
enforcement of any security interests, mortgages, liens or deeds of trust in
collateral security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Lenders and the Administrative Agent.

 

§13.2.     Employees and Agents.  The Administrative Agent may exercise its
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and the other
Loan Documents.  The Administrative Agent
may utilize the services of such Persons as the Administrative Agent in its
sole discretion may reasonably determine, and all reasonable fees and expenses
of any such Persons shall be paid by the Borrower.

 

§13.3.     No Liability. 
Neither the Administrative Agent nor any of its shareholders, directors,
officers or employees nor any other Person assisting them in their duties nor
any agent or employee thereof, shall be liable to the Lenders for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Administrative Agent
or such other Person, as the case may be, may be liable for losses due to its
willful misconduct or gross negligence. The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability to any Lender for relying upon, any writing, communication,
signature, resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex, electronic mail 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 the Borrower), independent
accountants and other experts selected by the Administrative Agent. With
respect to the Lenders, 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; provided
that the Administrative Agent shall not be required to take any action that, in
its opinion or the opinion of its counsel, is contrary to any Loan Document or
applicable law; provided  further that, the Administrative Agent
shall not be required to take any action (other than an action expressly
required by this Credit Agreement to be taken by it under such circumstances)
that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability. The Administrative Agent shall in all cases
be fully protected, as against the Lenders, in acting, or in refraining from
acting, under this Credit Agreement or any other Loan Document in accordance
with a request or consent of the Required Lenders (or such

 

84

 

greater number of Lenders as may
be expressly required hereby in any instance) and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.
Except as expressly set forth herein and in the other Loan Documents, the
Administrative Agent shall have no duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Borrower or any of
their respective Affiliates that is communicated to or obtained by the Person
serving as the Administrative Agent or any of its Affiliates in any
capacity.  The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice describing
such Default is given to the Administrative Agent by the Borrower or a Lender.

 

§13.4.     No Representations.

 

§13.4.1. General.  The
Administrative Agent shall not be responsible for the execution or validity or
enforceability of this Credit Agreement, the Letters of Credit, any of the other
Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Obligations, or for the value of any
such collateral security or for the validity, enforceability or collectibility
of any such amounts owing with respect to this Credit Agreement or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Borrower or any of its Subsidiaries, or
be bound to ascertain or inquire as to the performance or observance of any of
the terms, conditions, covenants or agreements herein or in any instrument at
any time constituting, or intended to constitute, collateral security for the
Obligations or to inspect any of the properties, books or records of the
Borrower or any of its Subsidiaries.  The
Administrative Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any Lender shall
have been duly authorized or is true, accurate and complete.  The Administrative Agent has not made nor
does it now make any representations or warranties, express
or implied, nor does it assume any liability to the Lenders, with
respect to the creditworthiness or financial conditions of the Borrower or any
of its Subsidiaries.  Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Credit Agreement.

 

§13.4.2. Closing Documentation, etc..  For purposes of determining compliance with
the conditions set forth in §9, each Lender that has executed this Credit
Agreement shall be deemed to have consented to, approved or accepted, or to be
satisfied with, each document and matter either sent, or made available, by the
Administrative Agent  or the
Arranger to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender, unless an officer of the Administrative Agent  or the Arranger active upon the Borrower’s account shall
have received notice from such Lender prior to the Closing Date specifying such
Lender’s objection thereto and such objection shall not have been withdrawn by
notice to the Administrative Agent or the Arranger to such effect on or prior
to the Closing Date.

 

85

 

§13.5.     Payments.

 

§13.5.1. Payments
to Administrative Agent.  A payment by the Borrower to the
Administrative Agent hereunder or any of the other Loan Documents for the
account of any Lender shall constitute a payment to such Lender.  The Administrative Agent agrees promptly to
distribute to each Lender such Lender’s pro rata share of payments received by
the Administrative Agent for the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan Documents.

 

§13.5.2. Distribution by
Administrative Agent.  If in the opinion of the Administrative Agent
the distribution of any amount received by it in such capacity hereunder or
under any of the other Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution shall
have been adjudicated by a court of competent jurisdiction.  If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Administrative Agent is
to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Administrative Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such manner and
to such Persons as shall be determined by such court.

 

§13.5.3. Delinquent
Lenders.  Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Lender that fails (a) to make available to the Administrative Agent its pro
rata share of any Loan, to make available to the Issuing Bank its pro  rata
share of each drawing under any Letter of Credit or to participate in any Swing
Line Loan or (b) to comply with the provisions of §12 hereof with respect to
making dispositions and arrangements with the other Lenders, where such Lender’s
share of any payment received, whether by setoff or otherwise, is in excess of
its pro rata share of such payments due and payable to all of the Lenders, in
each case as, when and to the full extent required by the provisions of this
Credit Agreement, shall be deemed delinquent (a “Delinquent
Lender”) and shall be deemed a Delinquent
Lender until such time as such delinquency is satisfied.  A Delinquent Lender shall be deemed to have
assigned any and all payments due to it from the Borrower, whether on account
of outstanding Loans, interest, fees or otherwise, to the remaining
nondelinquent Lenders for application to, and reduction of, their respective
pro rata shares of all outstanding Syndicated Loans.  The Delinquent Lender hereby authorizes the
Administrative Agent to distribute such payments to the nondelinquent Lenders
in proportion to their respective pro rata shares of all outstanding Syndicated
Loans.  A Delinquent Lender shall be
deemed to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Syndicated Loans of the
nondelinquent Lenders, the Lenders’ respective pro rata shares of all
outstanding Syndicated Loans have returned to those in effect immediately prior
to such delinquency and without giving effect to the nonpayment causing such
delinquency.

 

§13.6.     Holders
of Notes.  The
Administrative Agent may deem and treat the payee of any Note as the absolute
owner or purchaser thereof for all purposes hereof until

 

86

 

it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.

 

§13.7.     Indemnity.  To the extent not reimbursed by the Borrower,
the Lenders ratably agree hereby to indemnify and hold harmless the
Administrative Agent and its Affiliates (including
any of the officers, directors, employees, agents and attorneys-in-fact of any
thereof) (each an “Indemnified Party”) from and against any and all
claims, actions and suits (whether groundless or otherwise), losses, damages,
costs, expenses (including any expenses for which such Indemnified Party has
not been reimbursed by the Borrower as required by §14 hereof), and liabilities
of every nature and character arising out of or related to this Credit
Agreement, the Letters of Credit or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or such Indemnified
Party’s actions taken hereunder or thereunder, except to the extent that any of
the same shall be directly caused by such Indemnified Party’s willful
misconduct, gross negligence or, in the absence of instruction or concurrence
of the Required Lenders, breach of contract

 

§13.8.     Administrative Agent as
Lender; Etc.  In its individual capacity, Bank of America
shall have the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Loans made by it, as it would have were it
not also the Administrative Agent.  None
of the Co-Documentation Agents or the Syndication Agent shall have any
obligation, liability, responsibility or duty under this Credit Agreement other
than as a Lender hereunder.

 

§13.9.     Resignation.  (a) The Administrative Agent may resign at
any time by giving seventy five (75) days’ prior written notice thereof to the
Lenders and the Borrower.  Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Administrative Agent.  Unless a Default
or Event of Default shall have occurred and be continuing, such successor
Administrative Agent shall be reasonably acceptable to the Borrower.  Upon the earlier of (i) acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent (subject to such successor’s agreement to succeed as Issuing Bank and
lender of the Swing Line Loans pursuant to §13.9(b)) and (ii) the date on which
the Administrative Agent notifies the Borrower that no qualifying Person has
accepted such appointment within seventy five (75) days after the
Administrative Agent shall have provided notice to the Lenders and the
Borrowers of its resignation, (A) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and (B) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made, in the case of clause (i), by or to
the successor Administrative Agent and in the case of clause (ii), by or to each
Lender and the Issuing Bank directly, until such time as the Required Lenders
appoint a successor Administrative Agent as provided for above in this
§13.9(a). Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan

 

87

 

Documents (if not already discharged therefrom as provided above in
this §13.9(a)).  The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this §13 and §§14 and 15 shall continue in effect
for the benefit of such retiring Administrative Agent, its sub-agents and their
respective Affiliates, partners, directors, officers, employees, agents and
advisors in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.

 

(b)           Any
resignation by Bank of America as administrative agent pursuant to this §13.9 shall also constitute its resignation
as Issuing Bank and as lender of the Swing Line Loans to the extent that Bank
of America is acting in such capacities at such time.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of the
retiring Issuing Bank and the lender of the Swing Line Loans, (b) the retiring
Issuing Bank and lender of the Swing Line Loans shall be discharged from all of
their respective duties and obligations hereunder or under the other Loan
Documents, and (c) the successor Issuing Bank shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to the retiring Issuing Bank
to effectively assume the obligations of the retiring Issuing Bank with respect
to such Letters of Credit.

 

§13.10.  Notification of
Defaults and Events of Default.  Each Lender hereby agrees that, upon learning
of the existence of a Default or an Event of Default, it shall promptly notify
the Administrative Agent thereof.  The
Administrative Agent hereby agrees that upon receipt of any notice under this
§13.10 it shall promptly notify the other Lenders and the Borrower of the
existence of such Default or Event of Default.

 

§13.11.  Administrative Agent May File Proofs of Claim.

 

(a)           In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial, administrative or like proceeding or any assignment for the
benefit of creditors relative to Borrower or any of its Subsidiaries, the
Administrative Agent (irrespective of whether the principal of any Loan,
Reimbursement Obligation or Unpaid Reimbursement Obligation shall then be due
and payable as herein expressed or by declaration or otherwise and irrespective
of whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding, under any
such assignment or otherwise:

 

(i)            to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, Reimbursement
Obligations or Unpaid Reimbursement Obligations and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any

 

88

 

claim for the reasonable compensation, expenses, disbursements and
advances of the Lenders and the Administrative Agent and their respective
agents and counsel and all other amounts due the Lenders and the Administrative
Agent under the terms of this Credit Agreement)  allowed in such proceeding or under any such assignment; and

 

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

 

(b)           Any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such proceeding or under any such
assignment is hereby authorized by each Lender to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders, nevertheless to
pay to the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel due the Administrative Agent under the terms of the Credit
Agreement, and any other amounts due the Administrative Agent under the terms
of this Credit Agreement.

 

(c)           Nothing contained
herein shall authorize the Administrative Agent to consent to or accept or
adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations owed to such Lender or the
rights of any Lender or to authorize the Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding or under any such
assignment.

 

§14.        EXPENSES.

 

The
Borrower agrees to pay (a) the Administrative Agent’s reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Administrative
Agent or any of the Lenders (other than taxes based upon the Administrative
Agent’s or any Lender’s net income or taxes not payable by the Borrower
pursuant to the provisions of this Credit Agreement) on the transactions
contemplated by this Credit Agreement (the Borrower hereby agreeing to
indemnify the Administrative Agent and each Lender with respect thereto), (c)
the reasonable fees, expenses and disbursements of the Administrative Agent’s
Special Counsel or any local counsel to the Administrative Agent incurred in
connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, each closing hereunder, and
amendments, modifications, approvals, consents or waivers hereto or hereunder,
(d) the reasonable fees, expenses and disbursements of the Administrative Agent
or any of its Affiliates incurred by the Administrative Agent or such Affiliate
in connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, including all insurance
premiums and surveyor, engineering and appraisal charges, (e) all reasonable
out-of-pocket

 

89

 

expenses incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder, (f) all reasonable out-of-pocket expenses (including,
without limitation, reasonable attorneys’ fees and costs and reasonable accounting,
appraisal, investment banking and similar professional fees and charges)
incurred by the Administrative Agent or any Lender in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents
against the Borrower or any of its Subsidiaries or the administration thereof
after the occurrence of an Event of Default (including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiation) and (ii)
any other litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Lender’s or the Administrative Agent’s
relationship with the Borrower or any of its Subsidiaries (other than any
litigation, proceeding or dispute referred to in §15 hereof) but only if such
Lender or the Administrative Agent is the prevailing party in such litigation,
proceeding or dispute, and (g) all reasonable fees, expenses and disbursements
of the Administrative Agent incurred in connection with UCC searches.  The Borrower shall not pay the fees, expenses
and disbursements incurred by any Lender other than the Administrative Agent in
connection with the review and preparation of this Credit Agreement, the other
Loan Documents and the other agreements and instruments mentioned herein.  The covenants of this §14 shall survive
payment or satisfaction of all other Obligations.

 

§15.        INDEMNIFICATION.

 

The
Borrower agrees to indemnify and hold harmless the Administrative Agents, the
Arranger, the Lenders and their respective Affiliates, officers, directors and
employees (each such Person being called an “Indemnitee”) from and
against any and all claims, actions and suits whether groundless or otherwise,
and from and against any and all liabilities, losses, damages and expenses of
every nature and character arising out of this Credit Agreement or any of the
other Loan Documents or the transactions contemplated hereby including, without
limitation, (a) any actual or proposed use by the Borrower or any of its
Subsidiaries of the proceeds of any of the Loans or the Letters of Credit, (b)
the Borrower or any of its Subsidiaries entering into or performing this Credit
Agreement or any of the other Loan Documents or (c) with respect to the
Borrower and its Subsidiaries and their respective properties and assets, the
violation of any Environmental Law, the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release or threatened release of any
Hazardous Substances or any action, suit, proceeding or investigation brought
or threatened with respect to any Hazardous Substances (including, but not
limited to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding, but excluding liabilities, losses, damages or
expenses which are determined by a court of competent jurisdiction by final
order to result from the gross negligence, willful misconduct or breach of
contract of the Person seeking indemnification hereunder.  In litigation, or the preparation therefor,
the Indemnitee shall be entitled to select its own counsel and, in addition to
the foregoing indemnity, the Borrower agrees to pay promptly the reasonable
fees and expenses of such counsel. No Indemnitee shall be liable for any damages arising from the use by
others of any information or other materials obtained through IntraLinks or
other similar information transmission systems in connection with this Credit
Agreement or for any damages

 

90

 

arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems in connection with this Credit Agreement
or the other Loan Documents or the transactions contemplated hereby or thereby,
except, in each case, to the extent such damages are found in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Indemnitee’s gross negligence, willful misconduct or breach of
contract relating to its treatment or handling of such Intralinks information,
electronic telecommications or other information transmission system.  If, and to the extent that the obligations of
the Borrower under this §15 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction
of such obligations which is permissible under applicable law.  The covenants contained in this §15 shall
survive payment or satisfaction in full of all other Obligations.

 

§16.        SURVIVAL OF
COVENANTS, ETC.

 

All
covenants, agreements, representations and warranties made herein, in any of
the other Loan Documents or in any documents or other papers delivered by or on
behalf of the Borrower or any of its Subsidiaries pursuant hereto shall be
deemed to have been relied upon by the Lenders and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by any of them
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default, and shall survive the making by the Lenders
of any of the Loans or the issuance of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Credit Agreement or any Letter of Credit or the other Loan
Documents remains outstanding or any Lender has any obligation to make any
Loans or the Issuing Bank has any obligation to issue, renew or extend Letters
of Credit, and for such further time as may be otherwise expressly specified in
this Credit Agreement.  All statements
contained in any certificate or other paper delivered to any Lender or the
Administrative Agent at any time by or on behalf of the Borrower or any of its
Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower or such Subsidiary hereunder.

 

§17.        ASSIGNMENT
AND PARTICIPATION.

 

§17.1.     General
Conditions and Conditions to Assignment.  The provisions of this Credit 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 the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except:

 

(a)           any Lender may assign to one or more Eligible Assignees all
or a portion of its interests, rights and obligations under this Credit
Agreement (including all

 

91

 

or a portion of its Commitment Percentage and Commitment and the same
portion of the Loans at the time owing to it and its risk associated with
Letters of Credit); 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) or, if the Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Acceptance, as of the Trade Date, shall not be less than $5,000,000 unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed);

 

(ii)           the
parties to such assignment shall execute and deliver to the Administrative
Agent, for recording in the Register (as hereinafter defined), an Assignment
and Acceptance, substantially in the form of Exhibit G attached hereto (an “Assignment  and
Acceptance”), together with any Notes
subject to such assignment, a processing and recordation fee of $3,500 and, in
the case of a Foreign Lender, any documents, certificates or evidence required
to be delivered under §4.3.3, and the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire;

 

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

 

(iv)          (A)
any assignment of a Commitment must be approved by the Administrative Agent,
the Issuing Bank and the lender of the Swing Line Loans unless the Person that
is the proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee) and (B) unless an
Event of Default has occurred and is continuing, in the case of any assignment
to an Eligible Assignee who would impose costs or burdens on the Borrower under
§§4.3.2, 4.3.3, 4.6, 4.7, 4.8 and/or 4.13 not applicable to the assigning
Lender (or in the aggregate greater than any such costs or burdens imposed by
the assigning Lender), such assignment must be approved by the Borrower (each
such approval, whether referred to in clause (A) or (B), not to be unreasonably
withheld or delayed).

 

Subject to the approvals pursuant to §17.1(a)(iv),
upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder, and (ii) the assigning Lender shall, to the extent of its interest
being

 

92

 

assigned by such Assignment and Acceptance (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender’s rights and
obligations under this Credit Agreement, such Lender shall cease to be a party
hereto), be released from its obligations under this Credit Agreement but, notwithstanding such assignment, shall
continue to be entitled to the benefits of (i) §§4.3.2, 4.7, 4.8 and 4.10 and
(ii) §15, with respect to facts and circumstances occurring prior to the
effective date of such assignment. Any assignment or transfer by a Lender of
rights or obligations under this Credit Agreement that does not comply with
this paragraph shall be treated for purposes of this Credit Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with §17.4.;

 

(b)           by way of participation in accordance with the provisions
of §17.4.; or

 

(c)           by way of pledge or assignment of a security interest
subject to the restrictions of §17.7 (and any other attempted assignment or
transfer by any party hereto shall be null and void).

 

Nothing in this Credit 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 §17.4 and, to the extent expressly contemplated
hereby, the respective Affiliates, directors, officers, employees, agents and
advisors of each of the Administrative Agent, the Issuing Bank and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Credit
Agreement or any of the other Loan Documents.

 

§17.2.     Certain
Representations and Warranties; Limitations; Covenants.  By executing and delivering an Assignment and
Acceptance, the parties to the assignment thereunder confirm to and agree with
each other and the other parties hereto as follows:  (a) other than the representation and
warranty that it is the legal and beneficial owner of the interest being assigned
thereby free and clear of any adverse claim, the assigning Lender makes no
representation or warranty, express or implied, and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with this Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or the attachment, perfection or priority of any security interest or
mortgage; (b) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower and its Subsidiaries or any other Person primarily or secondarily liable
in respect of any of the Obligations, or the performance or observance by the
Borrower and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations of any of their obligations under
this Credit Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (c) such assignee
confirms that it has received a copy of this Credit Agreement, together with
copies of the most recent financial statements referred to in §§5.4 and 6.4
hereof and such other documents and information

 

93

 

as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (d) such assignee will,
independently and without reliance upon the assigning Lender, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Credit Agreement;
(e) such assignee represents and warrants that it is an Eligible Assignee; (f)
such assignee appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; (g) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Lender; (h) such
assignee represents and warrants that it is legally authorized to enter into
such Assignment and Acceptance; and (i) such assignee acknowledges that it has
made satisfactory arrangements with the assigning Lender with respect to its pro  rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit.

 

§17.3.     Register. 
The Administrative Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the “Register”) for the recordation of the names
and addresses of the Lenders and the Commitment Percentage of, and principal
amount of the Loans owing to the Lenders from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Credit Agreement.  The Register shall be
available for inspection by the Borrower and the Lenders at any reasonable time
and from time to time upon reasonable prior notice.

 

§17.4.     Participations. 
Each Lender may sell participations to one or more Persons (other than a
natural person) (each, a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Credit Agreement and the other Loan
Documents; provided that (a) except in the case of any such participation sold
to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a
Lender, each such participation shall be in an amount of not less than
$5,000,000 or shall be in an amount of such Lender’s entire remaining
Commitment and the Loans at the time owing to it, (b) any such sale or
participation shall not affect the rights and duties of the selling Lender
hereunder to the Borrower, (c) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations and (d) the
Borrower, the Administrative Agent, the Lenders and the Issuing Bank shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Credit 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 Credit Agreement and to approve any amendment,
modification or waiver of any provision of this Credit Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver that
would reduce the principal of or the interest rate on any Loans subject to such
participation, extend the term or increase the amount of the

 

94

 

Commitment of such Lender as it relates to such Participant, reduce the
amount of any fees to which such Participant is entitled or extend any regularly
scheduled payment date for principal or interest with respect to Loans subject
to such participation.  Subject to §17.5,
the Borrower agrees that each Participant shall be entitled to the benefits of
§§4.3.2, 4.7, 4.8 and 4.10  to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to §17.1.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
§12 as though it were a Lender, provided such Participant agrees to be subject
to §12 as though it were a Lender

 

§17.5.     Limitation upon Participant Rights.  A Participant shall not be entitled to
receive any greater payment under §4.3.2, 4.7 and 4.8 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.  Without limiting the foregoing, a Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of §4.3.2 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 §4.3.3 as though it were a Lender.

 

§17.6.     Assignee or
Participant Affiliated with the Borrower.  If any assignee Lender is an Affiliate of the
Borrower, then any such assignee Lender shall have no right to vote as a Lender
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or other
modifications to any of the Loan Documents or for purposes of making requests
to the Administrative Agent pursuant to §§11.1 or 11.2 hereof, and the
determination of the Required Lenders shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Lender’s interest in any of the Loans. 
If any Lender sells a participating interest in any of the Loans to a
Participant, and such Participant is the Borrower or an Affiliate of the
Borrower, then such transferor Lender shall promptly notify the Administrative
Agent of the sale of such participation. 
A transferor Lender shall have no right to vote as a Lender hereunder or
under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of
the Loan Documents or for purposes of making requests to the Administrative
Agent pursuant to §§11.1 or 11.2 hereof to the extent that such participation
is beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Required Lenders shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest
of such transferor Lender in the Loans to the extent of such participation.

 

§17.7.     Miscellaneous
Assignment Provisions.  Any
Lender may at any time grant a security interest in all or any portion of its
rights under this Credit Agreement to secure obligations of such Lender,
including without limitation (a) any pledge or assignment to secure obligations
to any of the twelve Federal Reserve Banks organized under §4 of the Federal
Reserve Act, 12 U.S.C. §341 and (b) with respect to any Lender that is a Fund,
to any lender or any trustee for, or any other representative of, holders of
obligations owed or securities issued by such Fund as security for such
obligations or

 

95

 

securities or any institutional custodian for such Fund or for such
lender; provided that no such grant shall release such Lender from any of its
obligations hereunder or under any of the other Loan Documents, provide any
voting rights hereunder to the secured party thereof, substitute any such
secured party for such Lender as a party hereto or affect any rights or
obligations of the Borrower or the Administrative Agent hereunder.  The words “execution,” “signed,” “signature,”  and words of like import in any Assignment
and Acceptance shall be deemed to include electronic signatures or the keeping
of records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

 

§17.8.     Resignation after Assignment. Notwithstanding
anything to the contrary contained herein, if at any time Bank of America
assigns all of its Commitment and Loans pursuant to §17.1, Bank of America may,
(i) upon seventy five (75) days’ notice to the Borrower and the Lenders, resign
as Issuing Bank and/or (ii) upon seventy five (75) days’ notice to the
Borrower, resign as lender of the Swing Line Loans.  In the event of any such resignation as
Issuing Bank or lender of the Swing Line Loans, the Borrower shall be entitled
to appoint from among the Lenders a successor Issuing Bank or lender of the
Swing Line Loans hereunder; provided, however, that no failure by
the Borrower to appoint any such successor shall affect the resignation of Bank
of America as Issuing Bank or lender of the Swing Line Loans, as the case may
be.  If Bank of America resigns as
Issuing Bank, it shall retain all the rights and obligations of the Issuing
Bank hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as Issuing Bank and all Unpaid Reimbursement
Obligations plus the Maximum Drawing Amount with respect thereto (including the
right to require the Lenders to make Base Rate Loans or make payments with
respect to Reimbursement Obligations). 
If Bank of America resigns as lender of the Swing Line Loans, it shall
retain all the rights of the lender of the Swing Line Loans provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to §2.10.

 

§18.        NOTICES, ETC.

 

Except
as otherwise expressly provided in this Credit Agreement, all notices and other
communications made or required by this Credit Agreement or any Letter of
Credit Applications shall be in writing and shall be delivered in hand, mailed
by United States registered or certified first class mail, postage prepaid,
sent by overnight courier, or sent by telegraph, telecopy, facsimile or telex
and confirmed by delivery via courier or postal service, addressed as follows:

 

(a)           if to the Borrower, at 500 Staples
Drive, Framingham, MA 01701, Attention: Mr. Robert Mayerson (phone: 508-253-9590)
(fax: 508-253-5485) (e-mail:

 

96

 

bob.mayerson@staples.com), or at such other address for notice as the
Borrower shall last have furnished in writing to the Person giving the notice,
with a copy to Jack A. VanWoerkom, Esq., Executive Vice President and General
Counsel, Staples, Inc., 500 Staples Drive, Framingham, MA  01701 (phone: 508-253-8614) (fax:
508-253-8955) (e-mail: jack.vanwoerkom@staples.com);

 

(b)           if to the Administrative Agent, (i)
for payments and requests for Loans, at 1850 Gateway Blvd., Mail Code:
CA4-706-05-09, Concord, California 94520-3282, Attention: Rachel L. Warford
(phone: 925-675-8361) (fax: 888-969-9236) (e-mail:
rachel.warford@bankofamerica.com), (ii) for all other notices, 100 North Tryon
Street, Mail Code: NC1-007-14-24, Charlotte, NC 28255-0001, Attention: Judy D.
Payne (phone: 704.386.2941) (fax: 704.409.0310) (e-mail:
judy.d.payne@bankofamerica.com), or such other addresses for notice as the
Administrative Agent shall last have furnished in writing to the Person giving
the notice; and

 

(c)           if to any Lender, at such Lender’s
address set forth on Schedule  1 hereto, or such other address for
notice as such Lender shall have last furnished in writing to the Person giving
the notice.

 

Any
such notice or demand shall be deemed to have been duly given or made and to
have become effective (i) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
the receipt thereof by such officer and (ii) if sent by registered or certified
first-class mail return receipt requested, postage prepaid, on the third
Business Day following the mailing thereof.

 

Notices
and other communications to the Lenders and the Issuing Bank hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to
notices to any Lender or the Issuing Bank pursuant to §§2 and 3 if such Lender
or the Issuing Bank, as applicable, has notified the Administrative Agent that
it is incapable of receiving notices under such §§2 and 3 by electronic
communication.  The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications.

 

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

 

97

 

described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

 

The
Administrative Agent, the Issuing Bank and the Lenders shall be entitled to
reasonably rely and act in good faith upon any notices (including telephonic
Loan Requests and Swing Line Loan Requests) purportedly given by or on behalf
of the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  The Borrower shall indemnify the Administrative
Agent, the Issuing Bank, each Lender and the directors, officers, employees,
agents and advisors of each of them from all losses, costs, expenses and
liabilities resulting from the reliance by such Person pursuant to this §18 on
each notice purportedly given by or on behalf of the Borrower.  All telephonic notices to and other
telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

§19.        GOVERNING
LAW.

 

THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW). 
THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING IN SUCH STATE AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN §18
HEREOF.  THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

 

§20.        HEADINGS.

 

The
captions in this Credit Agreement are for convenience of reference only and
shall not define or limit the provisions hereof.

 

§21.        COUNTERPARTS.

 

This
Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one

 

98

 

instrument.  In proving this
Credit Agreement it shall not be necessary to produce or account for more than
one such counterpart signed by the party against whom enforcement is
sought.  Delivery by facsimile by any of
the parties hereto of an executed counterpart hereof or of any amendment or
waiver hereto shall be as effective as an original executed counterpart hereof
or of such amendment or waiver and shall be considered a representation that an
original executed counterpart hereof or such amendment or waiver, as the case
may be, will be delivered.

 

§22.        ENTIRE
AGREEMENT, ETC.

 

The
Loan Documents and any other documents executed in connection herewith or
therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
§24 hereof.

 

§23.        WAIVER OF
JURY TRIAL.

 

Each
party hereto hereby waives its right to a jury trial with respect to any action
or claim arising out of any dispute in connection with this Credit Agreement or
any of the other Loan Documents, any rights or obligations hereunder or
thereunder or the performance of which rights and obligations.  Except as prohibited by law, the Borrower
hereby waives any right it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages.  The Borrower (a) certifies that
no representative, agent or attorney of any Lender or the Administrative Agent
has represented, expressly or otherwise, that such Lender or the Administrative
Agent would not, in the event of litigation, seek to enforce the foregoing
waivers and (b) acknowledges that the Administrative Agent and the Lenders have
been induced to enter into this Credit Agreement, the other Loan Documents to
which it is a party by, among other things, the waivers and certifications
contained herein.

 

§24.        CONSENTS,
AMENDMENTS, WAIVERS, ETC.

 

Any
consent or approval required or permitted by this Credit Agreement to be given
by the Lenders may be given, and any term of this Credit Agreement, the other
Loan Documents or any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower, the written consent of the Required Lenders and the written
acknowledgment of the Administrative Agent. 
Notwithstanding the foregoing, (a) the rate of interest on the Loans and
the amount of any Facility Fees or Utilization Fees may not be reduced or
forgiven, the term of the Loans or the Commitments may not be extended, the
regularly scheduled payment date for principal or interest on the Loans, the
Reimbursement Obligations or any Facility Fees or Utilization

 

99

 

Fees may not be postponed or extended, and the Commitment Amounts of a
Lender may not be increased, in each case without the written consent of the
Borrower and the written consent of each Lender directly affected thereby; (b)
the principal amount of any Loans or the Reimbursement Obligations may not be
forgiven without the written consent of each Lender directly affected thereby;
(c) this §24 may not be changed without the written consent of the Borrower and
the written consent of all of the Lenders; (d) the definition of Required
Lenders may not be amended without the written consent of all of the Lenders;
(e) the Administrative Agent may not release any guaranty for the Obligations
(except as provided in §4.14 hereof) without the written consent of all the Lenders;
(f) the amount of the Administrative Agent Fees payable for the account of the
Administrative Agent, any provision applicable to the Swing Line Loans and the
Administrative Agent in its capacity as lender of the Swing Line Loans, and §13
hereof may not be amended without the written consent of the Administrative
Agent; (g) no provision applicable to the Issuing Bank may be amended without
the written consent of the Issuing Bank; and (h) §1.5 or the definition of “Alternative
Currency” may not be amended without the written consent of each Lender. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon.  No course
of dealing or delay or omission on the part of the Administrative Agent or any
Lender in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto.  No notice to or
demand upon the Borrower shall entitle the Borrower to other or further notice
or demand in similar or other circumstances.

 

§25.        TREATMENT OF CERTAIN CONFIDENTIAL
INFORMATION.

 

§25.1.     Confidentiality. 
Each of the Lenders and the Administrative Agent agrees, on behalf of
itself and each of its Affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential
information of the same nature and in accordance with safe and sound banking
practices, any Confidential Information supplied to it by the Borrower or any
of its Subsidiaries pursuant to this Credit Agreement, provided that nothing
herein shall limit the disclosure of any such information (a) after such
information shall have become public other than through a violation of this §25
or becomes available to any of the Lenders or the Administrative Agent on a
nonconfidential basis from a source other than the Borrower or any of its
Subsidiaries, (b) to the extent required by statute, rule, regulation or
judicial process, (c) to counsel for any of the Lenders or the Administrative Agent,
(d) to bank examiners, any other regulatory authority having jurisdiction over
any Lender or the Administrative Agent (to the extent required by such Lender
by law or subpoena, but only to the extent permitted by applicable laws and
regulations, including those applying to classified materials), or to auditors
or accountants (provided such auditor or accountant has agreed to be bound by
this §25), (e) to the Administrative Agent, any Lender or, solely in connection
with this Credit Agreement and the transactions contemplated hereby, any
Financial Affiliate (provided such Financial Affiliate has agreed in a writing
enforceable by the Borrower to be bound by this §25), (f) in connection with
any litigation to which any one or more of the Lenders, the Administrative
Agent or any Financial Affiliate is a party, or in connection with the
enforcement of rights or remedies hereunder or under any

 

100

 

other Loan Document, (g) solely in connection with this Credit
Agreement and the transactions contemplated hereby, to a Lender Affiliate or a
Subsidiary or Affiliate of the Administrative Agent (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), (h) to any assignee or participant (or prospective assignee or
participant) or any actual or prospective counterparty (or its advisors) to any
swap or derivative transactions referenced to credit or other risks or events
arising under this Credit Agreement or any other Loan Document so long as such
assignee, participant or counterparty, as the case may be, agrees in a writing
enforceable by the Borrower to be bound by the provisions of this §25 or (i)
with the consent of the Borrower.

 

§25.2.     Prior
Notification. 
Unless specifically prohibited by applicable law or court order, each of
the Lenders and the Administrative Agent shall, prior to disclosure thereof,
notify the Borrower of any request for disclosure of any such non-public
information by any governmental agency or representative thereof (other than
any such request in connection with an examination of the financial condition
of such Lender by such governmental agency) or pursuant to legal process
including, without limitation, any disclosure under §25.1(b), (d) or (f).  In addition to, and without limiting the
foregoing, each of the Lenders and the Administrative Agent shall permit the
Borrower to intervene in any relevant proceedings to protect its interests in
the non-public information and shall provide reasonable cooperation to the
Borrower, at the Borrower’s expense, in seeking to obtain such protection.  Each of the Lenders and the Administrative
Agent further agrees that if the Borrower is not successful in precluding the
court or other legal body from requiring the disclosure of the non-public
information, such Lender or the Administrative Agent, as the case may be, will
furnish only that portion of the non-public information which it in good faith
reasonably considers to be legally required and, at the request and expense of
the Borrower, will exercise all reasonable efforts to obtain reliable
assurances that confidential treatment will be accorded the non-public
information.

 

§25.3.     Other.  In
no event shall any Lender or the Administrative Agent be obligated or required
to return any materials furnished to it or any Financial Affiliate by the
Borrower or any of its Subsidiaries.  The
obligations of each Lender under this §25 shall supersede and replace the
obligations of such Lender under any confidentiality letter in respect of this
financing signed and delivered by such Lender to the Borrower prior to the date
hereof and shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Loans or Reimbursement Obligations
from any Lender.

 

§26.        SEVERABILITY.

 

The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction, and shall not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision of this
Credit Agreement in any jurisdiction.

 

101

 

§27.        JUDGMENT CURRENCY.

 

If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder or any other Loan
Document in one currency into another currency, the rate of exchange used shall
be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the first currency with such other currency
on the Business Day preceding that on which final judgment is given.  The obligation of the Borrower in respect of
any such sum due from it to the Administrative Agent or the Lenders hereunder
or under the other Loan Documents shall, notwithstanding any judgment in a currency
(the “Judgment  Currency”) other than that in which such sum is
denominated in accordance with the applicable provisions of this Credit
Agreement (the “Agreement  Currency”), be discharged only to the
extent that on the Business Day following receipt by the Administrative Agent
of any sum adjudged to be so due in the Judgment Currency, the Administrative
Agent may in accordance with normal banking procedures purchase the Agreement
Currency with the Judgment Currency.  If
the amount of the Agreement Currency so purchased is less than the sum
originally due to the Administrative Agent from the Borrower in the Agreement
Currency, such Borrower agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify the Administrative Agent or the Person to whom
such obligation was owing against such loss. 
If the amount of the Agreement Currency so purchased is greater than the
sum originally due to the Administrative Agent in such currency, the Administrative
Agent agrees to return the amount of any excess to such Borrower (or to any
other Person who may be entitled thereto under applicable law).

 

§28.        USA
PATRIOT Act Notice.

 

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

 

[signature
pages follow]

 

102

 

IN
WITNESS WHEREOF, the undersigned have duly executed this
Credit Agreement as a sealed instrument as of the date first set forth above.

 

	
   

  	
  STAPLES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Mayerson

  	
   

  
	
   

  	
  Name: Robert Mayerson

  
	
   

  	
  Title: Senior Vice
  President, Finance &

  Treasurer

  

 

 

Signature Page to
Revolving Credit Agreement

 

 

	
   

  	
  BANK OF AMERICA, N.A.,
  individually

  and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sanjay H. Gurnani

  	
   

  
	
   

  	
  Name: Sanjay. H. Gurnani

  
	
   

  	
  Title: Vice President

  

 

 

	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CITICORP USA, Inc.,  individually and as

  Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Frezoulis

  	
   

  
	
   

  	
  Name: John Frezoulis

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC BANK USA, NATIONAL

  ASSOCIATION,  individually and as Co-

  Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cameron D. Gateman

  	
   

  
	
   

  	
  Name: Cameron D.
  Gateman

  
	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
  13503

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, NA,

  individually and as Co-Documentation

  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Teri Streusand

  	
   

  
	
   

  	
  Name: Teri Streusand

  
	
   

  	
  Title: Vice President

  
						

 

 

	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION,  individually and as Co-

  Documentation Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Aaron H. Headley

  	
   

  
	
   

  	
  Name: Aaron H. Headley

  
	
   

  	
  Title: Associate

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J. Vegh

  	
   

  
	
   

  	
  Name: Michael J. Vegh

  
	
   

  	
  Title: Assistant Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SOVEREIGN BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Judith C.E. Kelly

  	
   

  
	
   

  	
  Name: Judith C.E. Kelly

  
	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION BANK OF CALIFORNIA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Theresa L. Rocha

  	
   

  
	
   

  	
  Name: Theresa L. Rocha

  
	
   

  	
  Title: Vice President

  

 

 

	
   

  	
  U.S. BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jennifer L.
  Thurston

  	
   

  
	
   

  	
  Name: Jennifer L.
  Thurston

  
	
   

  	
  Title: Asst. Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Johna Fidanza

  	
   

  
	
   

  	
  Name: Johna Fidanza

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NOVA SCOTIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd S. Meller

  	
   

  
	
   

  	
  Name: Todd S. Meller

  
	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BAYCLAYS BANK PLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David Barton

  	
   

  
	
   

  	
  Name: David Barton

  
	
   

  	
  Title: Manager

  

 

 

	
   

  	
  CALYON NEW YORK BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James D. A. Gibson

  	
   

  
	
   

  	
  Name: James D. A.
  Gibson

  
	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Schubert

  	
   

  
	
   

  	
  Name: Philip Schubert

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON,

  acting through its
  Cayman Islands Branch

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Philip Ho

  	
   

  
	
   

  	
  Name: Philip Ho

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cassandra Droogan

  	
   

  
	
   

  	
  Name: Cassandra Droogan

  
	
   

  	
  Title: Associate

  

 

 

	
   

  	
  DEUTSCHE BANK AG NEW YORK

  BRANCH

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas A. Foley

  	
   

  
	
   

  	
  Name: Thomas A. Foley

  
	
   

  	
  Title: Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Belinda Wheeler

  	
   

  
	
   

  	
  Name: Belinda Wheeler

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KBC BANK N.V.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert M. Surdam,
  Jr.

  	
   

  
	
   

  	
  Name: Robert M. Surdam,
  Jr.

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert Snauffer

  	
   

  
	
   

  	
  Name: Robert Snauffer

  
	
   

  	
  Title: First Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PNC BANK, NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald V. Davis

  	
   

  
	
   

  	
  Name: Donald V. Davis

  
	
   

  	
  Title: Managing
  Director

  

 

 

 

	
   

  	
  SUMITOMO MITSUI BANKING

  CORP., NEW YORK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Edward McColly

  	
   

  
	
   

  	
  Name: Edward McColly

  
	
   

  	
  Title: Vice President
  & Department Head

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILLIAM STREET COMMITMENT

  CORPORATION (RECOURSE
  ONLY

  TO ASSETS OF WILLIAM STREET

  COMMITMENT CORP)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jennifer M. Hill

  	
   

  
	
   

  	
  Name: Jennifer M. Hill

  
	
   

  	
  Title: Chief Financial
  OfficerExhibit
10.1

 

SHAREHOLDERS
AGREEMENT

 

 

AMONG

 

 

INFOCUS
CORPORATION

 

A Cayman
Subsidiary of InFocus Corporation

 

TCL
CORPORATION

 

AND

 

TCL
Optoelectronic Tech (Shenzhen) Co., Ltd.

 

 

Dated
as of December 14, 2004

 

with
respect to

 

 

SOUTH
MOUNTAIN TECHNOLOGIES, LTD.

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  DESCRIPTION OF THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  ESTABLISHMENT
  AND STRUCTURE OF THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  DIRECTORS AND BOARD
  MEETINGS

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  BUSINESS SCOPE
  AND BUSINESS MANAGEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  BUDGETS, FINANCIAL INFORMATION AND AUDIT

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  DISTRIBUTION
  POLICY AND DETERMINATION OF NET PROFIT

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  FINANCE FOR THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  TRANSFER OF SHARES

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  AMENDMENT AND
  ALTERATION OF THE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  TERMINATION AND BUY OUT

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  DURATION

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  RIGHTS TO
  INFORMATION AND CONFIDENTIALITY

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  TIME

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  SEVERABILITY

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  SURVIVAL OF RIGHTS, DUTIES AND OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  COSTS

  	
   

  
	
   

  	
   

  	
   

  
	
  20.

  	
  ENTIRE AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  21.

  	
  CONFLICT WITH THE ARTICLES

  	
   

  
	
   

  	
   

  	
   

  
	
  22.

  	
  NO PARTNERSHIP

  	
   

  
	
   

  	
   

  	
   

  
	
  23.

  	
  NOTICE

  	
   

  
	
   

  	
   

  	
   

  
	
  24.

  	
  FURTHER ASSURANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  25.

  	
  NO IMMUNITY

  	
   

  
	
   

  	
   

  	
   

  
	
  26.

  	
  DISPUTE RESOLUTION

  	
   

  
	
   

  	
   

  	
   

  
	
  27.

  	
  GOVERNING LAW

  	
   

  
	
   

  	
   

  	
   

  
	
  28.

  	
  COUNTERPARTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1:

  	
  LIST
  OF RELATED CONTRACTS

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT
  A:

  	
  FORM
  OF DEED OF ADHERENCE

  	
   

  
				

 

i

 

THIS AGREEMENT is made as of December 14, 2004, by and
among InFocus Corporation, a corporation duly organized and existing under the
laws of Oregon, U.S.A., and a wholly-owned Cayman Island subsidiary of InFocus
Corporation, hereinafter “InFocus Cayman” as one party (hereinafter
individually and collectively referred to as “InFocus,” as applicable), and TCL
Corporation, a company limited by shares duly organized and existing under the
laws of the PRC, and TCL Optoelectronic
Tech (Shenzhen) Co., Ltd. (“TCL Optoelectronic”), a limited liability
company duly organized and existing under the laws of the PRC (hereinafter
individually and collectively referred to as “TCL,” as applicable), as the
other party.

 

WHEREAS:

 

A.                                    InFocus Corporation is the worldwide leader
in the development, production and sale of thin displays, front and rear
digital projection systems, engines devices and related products;

 

B.                                    TCL Corporation, directly and through its
Subsidiaries, is a leading manufacturer and marketer of televisions,
telecommunication equipment (including fixed line and mobile telephones),
personal computers and peripheral computer equipment, consumer audio and video
products, home appliances and electrical components and products;

 

C.                                    The Parties have agreed to establish the
Company (as defined below) as a 50/50 joint venture business between InFocus
Cayman and TCL Optoelectronic, and that the Company will engage in (i) the
design, manufacture, manufacture outsourcing, sale and provision of after sales
service and support for Joint Venture Products (as hereinafter defined)
thereof; (ii) research and development in respect of Joint Venture Products ;
and (iii) contract manufacturing of Joint Venture Products for third parties (the
“Business”);

 

D.                                    The Parties have agreed that the Business
shall be conducted through South Mountain Technologies, Ltd., a limited
liability company organized under the laws of Cayman Islands (the “Company”)
and one or more Subsidiaries of the Company as provided herein. Design,
manufacturing, research and development, sales and operations of the Company
shall be conducted by a wholly-owned Subsidiary (the “WFOE”) of the Company to
be established in Shenzhen, PRC under the PRC’s Wholly Foreign-Owned Enterprise
Law as more particularly described herein. 
Additional research and development operations of the Company shall be
conducted by Subsidiaries to be established by the Company in Wilsonville,
Oregon and Fredrikstad, Norway;

 

E.                                      The Parties have agreed that certain of the
Joint Venture Products designated as Committed Products and more particularly
described herein shall be manufactured exclusively by the WFOE;

 

F.                                      The Parties have agreed that the Company
shall have the opportunity to bid for the right to manufacture on an exclusive
basis other Joint Venture Products that are not Committed Products as more
particularly described herein;

 

	
   

  	
   

  
	
  Initialed by TCL

  	
  Initialed by
  INFOCUS

  

 

1

 

G.                                    InFocus Corporation agrees to guarantee the
performance of obligations under this Agreement by InFocus Cayman, and to be
held jointly and severally liable for any non-performance of the obligations
under, or breach of this Agreement by, InFocus Cayman or its Permitted Transferee
hereunder;

 

H.                                    TCL Corporation agrees to guarantee the
performance of obligations under this Agreement by TCL Optoelectronic, and to
be held jointly and severally liable for any non-performance of the obligations
under, or breach of this Agreement by, TCL Optoelectronic or its Permitted
Transferee hereunder;

 

I.                                         The Company was incorporated in Cayman
Islands on December 13, 2004, and at the date hereof has an authorized
share capital of US$ 20 million divided into 200,000,000 Ordinary Shares of par value US$ 0.10 each, of
which 200 shares have been issued at a subscription price of US$2.50 per share
and held by InFocus Cayman and TCL Optoelectronic on a 50/50 basis; and

 

J.                                      The Parties have agreed, subject to the
satisfaction of the conditions precedent in Article 4, to subscribe for “A”
and “B” Shares on the terms and subject to the conditions hereinafter
contained.

 

NOW, THEREFORE, it is hereby agreed as follows:

 

1.                                      DEFINITIONS

 

1.1                                 The following words and expressions shall
have the following meanings:

 

“A” Director means a director holding office appointed by
holders of a majority of the “A” Shares;

 

“A” Shareholders means the persons from time to time
registered as holder(s) of “A” Shares, initially TCL Optoelectronic or its
Permitted Transferee hereunder;

 

“A” Shares means the Ordinary Shares to be designated “A”
Ordinary Shares in the capital of the Company;

 

Affiliate of a Party shall mean a legal entity
that, directly or indirectly, controls, or is controlled by, a Party. The term “control”
means ownership of fifty percent (50%) or more of the registered capital or
voting stock, or the power to appoint or elect a majority of directors or the
power to direct the management of such entity. 
In respect of TCL, Affiliates shall include, but not be limited to, TCL
International Holdings Limited, the Component SBU division of TCL Corporation
and the joint venture between TCL International Holdings Limited and Thomson
S.A. named TTE Corporation (“TTE”).  The
Affiliates of a Party shall not include the Company and its Subsidiaries;

 

Annual Accounts has the meaning given such term in Article 7.2;

 

2

 

Articles means the Memorandum and Articles of
Association of the Company in a form consistent with the terms of this
Agreement and to be adopted pursuant to Article 4.2.3;

 

Audited Accounts means the audit report and audited
consolidated accounts of the Company for the applicable fiscal year;

 

Auditors means Ernst & Young or such other
internationally-recognized accounting firm as shall be appointed by the Board
in accordance with this Agreement;

 

“B” Director means a director holding office appointed by
holders of a majority of the “B” Shares;

 

“B” Shareholders means the persons from time to time
registered as holder(s) of “B” Shares, initially InFocus Cayman;

 

“B” Shares means the Ordinary Shares to be designated “B”
Ordinary Shares in the capital of the Company;

 

Board means the board of directors of the Company;

 

Business Day means any day, other than a Saturday, Sunday
or a day on which banks in the United States, the PRC or Hong Kong are required
or authorized by law to be closed;

 

Business has the meaning given such term in Recital
C;

 

Committed Products  has the meaning given such term in Article 6.2;

 

Company  has the meaning given such term in Recital D;

 

Completion Date means the date when the Completion takes
place or such later date as the Shareholders may agree;

 

Completion means completion of the subscription for
shares pursuant to Article 4 of this Agreement. Completion shall take
place after fulfillment (or, at their discretion, waiver by the Shareholders)
of all the Conditions as specified in Article 4 of this Agreement.  The Completion shall take place on the 5th
Business Day or on another day as agreed between the Parties following the
fulfillment (or, at their discretion, waiver by the Shareholders) of each of
the Conditions as specified in Article 4;

 

Directors means the “A” Directors and the “B”
Directors;

 

Fair Market Value of the Company shall mean the price that a willing buyer
would pay to a willing seller for all of the equity capital of the Company in
an arm’s length transaction, with neither the buyer nor the seller being under
any immediate need to consummate the transaction.  It is agreed that the buyer and the seller in
arriving at such price would (1) consider, among other factors, the past and
present earnings of the Company, the initial public

 

3

 

offering value of the Company if shares of capital
stock of the Company were offered to the public in a widely distributed initial
public offering and listed on one or more major stock exchanges if such initial
public offering could reasonably be expected to be successful at such time, and
comparable stock market valuation assuming that shares of the Company were
listed on a major stock exchange and publicly traded and widely distributed
with no discount for lack of liquidity if such listing and public trading could
be reasonably expected to be achieved at such time; and (2) ascribe no value to
the patents and technology licensed to the Company under the InFocus Technology
License Agreement or the TCL Technology License Agreement to the extent such
licenses would terminate as a result of a transfer of ownership interests and
take into account the potential effect of such termination and the termination
of this Agreement and other agreements between the Company and the shareholder
transferring its equity interests in the Company on the earnings and financial
position on the Company after such transfer as well as other effect on the
earnings and financial position of the Company resulting from or relating to
such transfer;

 

InFocus Technology License
Agreement means
the technology license agreement between InFocus Corporation and the Company in
substantially the form agreed by the Parties;

 

Joint Venture Products  has the meaning given such term in Article 6.1;

 

Landed Price  means the actual cost of Joint Venture
Products to a purchaser as delivered to the purchaser or its customers, taking
into account all costs from production and delivery to the purchaser;

 

MFN means most-favored-nation terms, including
pricing and other significant terms that are at least as favorable as the terms
offered to or agreed with others;

 

Ordinary Shares means the “A” Shares and the “B” Shares;

 

Party means, as applicable, each of TCL
Corporation, TCL Optoelectronic, InFocus Corporation and InFocus Cayman, and
any transferee in the transfer of all or part of the interests of TCL Optoelectronic
or InFocus Cayman made pursuant to this Agreement upon the signing by such
transferee of a Deed of Adherence substantially in the form of Exhibit B,
which are sometimes collectively referred to as the “Parties;”

 

Permitted Transferee means, with respect to a Party, a parent
company or other entity owning, directly or indirectly, 75% or more of the
voting equity securities in such Party, or a Subsidiary (directly or
indirectly) whose voting equity securities are 75% or more owned by TCL Corporation
(as to TCL) or InFocus Corporation (as to InFocus);

 

PRC or China means the People’s Republic of China;

 

Related Contract means each of the other agreements listed in
Schedule 1;

 

4

 

Senior Officers mean the Chief Executive Officer (“CEO”),
the Chief Operating Officer (“COO”), the Chief Financial Officer (“CFO”), the
Chief Technology Officer (“CTO”), the head of each department of the Company or
its Subsidiaries and other senior officers designated by the board of the
directors of the Company or its Subsidiaries;

 

Shareholders means the “A” Shareholders and the “B”
Shareholders;

 

Shares means the “A” Shares and the “B” Shares and
any shares issued in exchange therefor by way of conversion or reclassification
and any shares representing or deriving from such shares as a result of any
increase in or reorganization or variation of the capital of the Company;

 

Subsidiary means, with respect to any Party, a
corporation or other entity of which 50% or more of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly,
by such Party, provided that the Subsidiaries of a Party shall not include the
Company and its Subsidiaries;

 

TCL Technology License Agreement means the technology license agreement
between TCL Corporation and the Company in substantially the form agreed by the
Parties;

 

Technology License Agreement means the InFocus Technology License
Agreement and/or TCL Technology License Agreement, as applicable;

 

TTE has the meaning as set forth in the
definition of Affiliate.

 

1.2                                 Unless the context otherwise requires, any
reference to a statutory provision shall include such provision as from time to
time amended so far as such amendment applies or is capable of applying to any
transactions entered into hereunder.

 

1.3                                 References to Recitals, Articles, Paragraphs
and Schedules are to recitals, articles, paragraphs and schedules of this
Agreement.

 

1.4                                 The headings are for convenience only and
shall not affect the interpretation hereof.

 

1.5                                 Unless the context otherwise requires, words
importing the singular only shall include the plural and vice versa and
references to natural persons shall include bodies corporate.

 

2.                                      DESCRIPTION OF THE COMPANY

 

The Company has been formed
as a newly established limited liability company under the laws of the Cayman
Islands with an authorized capital of US$20 million, divided into 200,000,000
shares of common stock of par value US$0.10 each, of which 200 shares have been issued at a
subscription price of US$2.50 per share and held by InFocus Cayman and TCL
Optoelectronic or its Permitted Transferee on a 50/50 basis.

 

5

 

3.                                      REPRESENTATIONS AND WARRANTIES

 

3.1                                 By TCL

 

TCL hereby represents and warrants as of the date
hereof and on the Completion Date (except for those as of a specified date) as
follows:

 

3.1.1                        TCL Corporation is a company limited by
shares duly organized and validly existing with the status of a legal person
under the laws of the PRC.

 

3.1.2                        The execution and performance by TCL of this
Agreement and each Related Contract to which it is or will be a party (i) are
within its corporate power and business scope, (ii) have been duly authorized
by all necessary corporate action, (iii) do not contravene its articles of
association and (iv) do not contravene any law or contractual restriction
binding on or affecting it other than, in the case of performance of this
Agreement and each Related Contract, the Approvals required in the PRC prior to
the Completion Date, including the Approvals relating to overseas investment by
TCL, the establishment, registration and related matters of the WFOE, and any
required registration or approval of the InFocus Technology License Agreement
and other Related Contracts.

 

3.1.3                        All authorizations, consents or approvals or
other actions by, and all notices to or filings with, any governmental
authority (the “Approvals”) required for the due execution and delivery by TCL
of this Agreement and each Related Contract to which it is or will be a party
have been obtained, and all such Approvals will be obtained prior to the
Completion Date.

 

3.1.4                        This Agreement is, and each Related Contract
to which TCL is a party is, or on execution thereof will be, the legal, valid
and binding obligation of TCL, enforceable against TCL in accordance with its
respective terms except as enforceability may be limited by applicable
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity relating to
enforceability.

 

3.2                                 By InFocus

 

InFocus hereby represents and warrants as of the
date hereof and on the Completion Date (except for those as of a specified
date) as follows:

 

3.2.1                        InFocus Corporation is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Oregon, the United States of America.

 

6

 

3.2.2                        The execution and performance by InFocus of
this Agreement and each Related Contract to which it is or will be a party (i)
are within its corporate power, (ii) have been duly authorized by all necessary
corporate action, (iii) do not contravene its Articles of Incorporation or
By-Laws and (iv) do not contravene any law or contractual restriction binding
on or affecting InFocus, other than, in the case of the performance of this
Agreement and each Related Contract, any consent or waiver required prior to
the Completion Date under the Credit Agreement between InFocus and its primary
line of credit lender, and in the case of the performance of this Agreement and
the InFocus Technology License Agreement, any government approval required
prior to the Completion Date.

 

3.2.3                        All authorizations, consents or approvals or
other actions by, and all notices to or filings with, any governmental
authority (the “Approvals”) required for the due execution and delivery by
InFocus of this Agreement and each Related Contract to which it is or will be a
Party have been obtained, and all such Approvals will be obtained prior to the
Completion Date, other than, in the case of the performance of this Agreement
and the InFocus Technology License Agreement, any government approval required
prior to the Completion Date.

 

3.2.4                        This Agreement is, and each Related Contract
to which InFocus is a Party is, or on execution will be, the legal, valid and
binding obligation of InFocus, enforceable against InFocus in accordance with
its respective terms except as enforceability may be limited by applicable
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors’ rights generally and by general principles of equity relating to
enforceability.

 

4.                                      ESTABLISHMENT AND STRUCTURE OF THE COMPANY

 

4.1                                 Meeting or Unanimous Consent of the Board of
Directors

 

On or prior to the Completion Date, the Shareholders
shall procure the holding of a meeting of the Board and the passing thereat of
a resolution convening an Extraordinary General Meeting of the Company
immediately following the adjournment of the meeting of the Board for the
purposes referred to in Articles 4.2 and 4.3 or alternatively, procure a
unanimous written consent of the Directors and a special resolution of the
Company signed by all the Shareholders.

 

4.2                                 Extraordinary General Meeting or Special
Resolution by Written Consent

 

Upon the calling of the Extraordinary General
Meeting the Shareholders shall give consents to short notice in respect of such
Extraordinary General Meeting and shall attend and vote thereat in favor of
resolutions (in such form as shall have been previously approved by the
Shareholders) or alternatively provide written consent to the adoption of a
special resolution:

 

7

 

4.2.1                        designating the issued Ordinary Shares in the
name of TCL Optoelectronic as “A” Shares and designating the issued Ordinary
Shares in the name of InFocus Cayman as “B” Shares.

 

4.2.2                        authorizing the Directors to issue and allot
a total of 1,999,900 “A” and 1,999,900 “B” Shares at the subscription price of
US$2.50 per shares to the Shareholders on the Completion Date in accordance
with this Agreement.

 

4.2.3                        adopting the Articles in substitution for the
existing articles of association of the Company.

 

4.3                                 Subscription for Shares

 

Forthwith upon the passing of the resolutions of the
Company pursuant to Article 4.2:

 

4.3.1                        the Shareholders shall each complete, sign
and deliver to the Company applications for the allotment to them of the number
of “A” or “B” Shares set against their names below (in addition to the 100
shares initially issued to each of TCL Optoelectronic and InFocus Cayman) to be
subscribed for in cash at a price of US$2.50 per share, by wire transfer of
immediately available funds for the appropriate sum:

 

TCL Optoelectronic:1,999,900 “A” Shares at the
Completion Date

 

InFocus Cayman: 1,999,900 “B” Shares at the
Completion Date

 

4.3.2                        the Shareholders shall procure that the
meeting of the Board referred to in Article 4.1 is reconvened and that
there are passed thereat resolutions or alternatively, an unanimous written
consent of the director is obtained:

 

(i)                                     approving the Shareholders’ applications for
the “A” and “B” Shares and allotting those Shares at the Completion Date,
authorizing the Shareholders names to be entered in the Register of Members of
the Company as holders of the Shares so allotted and directing the sealing of
certificates in respect thereof;

 

(ii)                                  adopting the year ending December 31 as
the Company’s fiscal year;

 

(iii)                               appointing Ernst & Young or another
internationally recognized accounting firm agreed between the Parties as the
Company’s Auditors;

 

(iv)                              accepting the resignation of the initial
Secretary of the Company and appointing as Secretary of the Company an officer
of the Company nominated by the A Directors;

 

8

 

(v)                                 approving agreements listed on Schedule 1
hereto, in substantially the forms initialed by the Parties; and

 

(vi)                              ratifying the articles of association (or
equivalent formation documents) for the WFOE and the wholly-owned Subsidiaries
of the Company in the United States of America and Norway.

 

4.3.3                        The Company shall issue a total of 2,000,000 “A”
Shares to TCL Optoelectronic and 2,000,000 “B” Shares to InFocus Cayman in
total with the remaining shares after the Completion Date being issued as the
Board deems appropriate pursuant to this Agreement and shall register the
Shareholders as the holders of such shares and shall prepare, seal share
certificates in respect and deliver to the Shareholders thereof in their names.
TCL and InFocus shall subscribe for, and the Company shall issue to them,
Shares in the remaining authorized share capital of the Company on a 50/50
basis (i.e. US$5 million each) at the same subscription price per Share within
one (1) year of the Completion Date with the exact timing of such further
subscription to be determined by the Board.

 

4.3.4                        The Parties have agreed upon the
pre-establishment budget of US$ 3 million by a separate agreement and shall
contribute to such budget by wire transfer of immediately available funds
within five (5) Business Days of the date hereof.  Expenditures made by a Party in accordance
with such budget, shall be credited against the Party’s subscription price for
Shares, subject to confirmation of the expenditures by the Board.

 

4.4                                 Conditions to the Completion

 

The obligation of the Parties to complete the
purchase of Shares on the Completion Date shall be conditioned upon the
fulfillment (or, at their discretion, waiver by the Shareholders), of each of
the following conditions precedent (“Conditions”) described below:

 

(a)                                  the passing of a resolution by the board of
directors of each of InFocus and TCL to approve this Agreement, the
arrangements contemplated herein and all ancillary matters relating hereto;

 

(b)                                 adoption of the Articles pursuant to Article 4.2.3
of this Agreement;

 

(c)                                  approval by the Parties of the articles of
association of the WFOE to be finalized based on this Agreement;

 

(d)                                 approval by the Parties of the agreements
listed on Schedule 1 hereto;

 

(e)                                  registration and approval (if necessary) by
the PRC Ministry of Commerce or its authorized local government authorities and
any other government authorities of the technology license agreement between
the Company and the WFOE;

 

9

 

(f)                                    approval of the WFOE by the competent PRC
approval authorities, which permits the unlimited sale of the Joint Venture
Products in the PRC;

 

(g)                                 approval of the WFOE’s articles of
association by the competent PRC approval authorities in the form submitted
without changes that are materially adverse to a Party’s interest in the
Company or the WFOE (unless waived by the Parties);

 

(h)                                 issuance of a business license to the WFOE by
the competent PRC industrial and commercial bureau for the WFOE to engage in
the business specified in the WFOE’s articles of association as approved by the
Board; and

 

(i)                                     written certification by the Parties that
their respective representations and warranties under Article 3 are true and
correct when made and on the Completion Date (except for those with a specified
date) in all material respects.

 

4.5                                 Satisfaction

 

InFocus and TCL shall in their own name or, where
appropriate, on behalf of the Company, use their respective commercially
reasonable efforts to procure the satisfaction of the Conditions. Each Party
shall forthwith notify the other in writing upon it becoming aware of the
fulfillment of any of the Conditions. Upon fulfillment (or at their discretion,
waiver by the Parties) of all the Conditions, the Parties shall proceed to
Completion in accordance with this Article 4.

 

4.6                                 Non-fulfillment

 

In the event that the Conditions have not been
fulfilled (or, at their discretion, waived by the Parties) on or before the
date that is four (4) months from the date hereof or such later date as the
Parties may agree in writing, all liabilities of the Parties hereunder shall
cease, subject to all accrued rights and obligations and subject to the
obligations of the Parties under Article 14.2 of this Agreement remaining
in force.

 

4.7                                 Completion

 

4.7.1                        Neither InFocus nor TCL shall be obliged to
complete the subscription of the Shares on the Completion Date unless
subscription for all the Shares scheduled for such Completion is completed simultaneously.

 

4.7.2                        Subject to the terms of this Agreement, the
Parties shall subscribe for and the Company shall issue and allot on the
Completion Date the applicable number of Shares to the Parties pursuant to Article 4.

 

10

 

5.                                      DIRECTORS AND BOARD MEETINGS

 

5.1                                 “A” Directors of the Company

 

Holders of a majority of the “A” Shares shall
appoint the following three persons as the initial “A” Directors:

 

Hu Quisheng

Bo Lianming

Shi Wanwen

 

5.2                                 “B” Directors of the Company

 

Holders of a majority of the “B” Shares shall
appoint the following three persons as the initial “B” Directors:

 

Kyle Ranson

John Harker

Mike Yonker

 

5.3                                 Resignation of Directors

 

Any Director may resign at any time by delivering
his or her written resignation to the Party which appointed him or her and to
the Chairman or, in the case of the resignation of the Chairman, to the Vice
Chairman.  Such resignation shall specify
whether it will be effective at a particular time, upon receipt by the relevant
Party which appointed such Director or at the decision of the Board.  If no such specification is made it shall be
deemed effective at the decision of the relevant Party which appointed such
Director.

 

5.4                                 Vacancies and Removal of Directors.

 

Any vacancy on the Board shall be filled by the
Party which appointed the Director who vacated his or her seat on the Board and
his or her replacement shall serve out the remainder of the departing Director’s
term of office.  A vacancy on the Board
shall be deemed to exist under this Article in the case of the death,
removal or resignation of any Director. 
A Director can be removed from the Board at any time, with or without
cause, by the Party which appointed him or her as a Director.  When appointing and replacing Directors, the
Party making such appointment shall notify the Company and the other Party in
writing and shall indemnify the Company from all of its losses and expenses
resulting from any claim by such Directors against the Company relating to such
removal.

 

5.5                                 Chairman and Vice Chairman of the Board

 

The Chairman of the Board shall be appointed by TCL
and the Vice Chairman shall be appointed by InFocus. The first Chairman shall
be Hu Quisheng and the first Vice Chairman shall be Kyle Ranson.  The Chairman or Vice Chairman can be removed
at any time, with or without cause, by the Party which appointed him or
her.  When appointing and replacing the
Chairman or Vice Chairman, the Party making such appointment shall notify the
Company and the other Party in writing and shall indemnify the Company from all
of its

 

11

 

losses and expenses resulting from any claim by such
Chairman or Vice Chairman against the Company relating to such removal.

 

5.6                                 Board Meetings

 

5.6.1                        Meeting of the Board. The Board shall convene and hold at least
one regular meeting in each quarter. 
Before each meeting, the Chairman shall issue to all Directors a written
notice setting forth the agenda, time and place of the meeting.  Special meetings of the Board shall also be
convened by the Chairman (or, if the Chairman fails to do so, the Vice
Chairman) upon a written proposal made by any two of the Directors.  Meetings of the Board may be held in any
jurisdiction approved by the Board, provided that adequate facilities are
available for telephonic participation. 
All board meetings shall be conducted in English and Chinese with both
Parties having interpreters available in attendance.  Both Parties will be allowed to have guests
attend board meetings on an as-needed basis based upon the agenda of the
meeting.  Such attendance must be
approved by the Chairman and Vice Chairman, and such approval will not be
unreasonably withheld.  Such allowed
guests may be excused during the meeting during any period in which
confidential information is discussed or conflict of interest information is
discussed.

 

5.6.2                        Notice and Agenda; Waiver of Notice.  All
regular or special meetings of the Board shall be called upon ten (10) Business
Days’ prior written notice (or upon such lesser period of time as the Directors
shall unanimously agree in writing from time to time) to all Directors.  Such notice shall indicate the date, time,
and place and agenda of the meeting together with any related materials.  Extemporary and additional proposals can be
included in the agenda and discussed in the meetings with the agreement of the
majority of the Directors present with at least one A Director and one B
Director included in such majority. 
Notice of meeting need not be given to any Director who submits a
written waiver of notice, signed by such Director, whether before or after the
meeting.  Neither the business to be
transacted at, nor the purpose of, any meeting of the Board need be specified
in any written waiver of notice. 
Attendance of a Director at a meeting (whether in person, by proxy or by
telephone) shall constitute a waiver of notice of such meeting, except when the
Director attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.

 

5.6.3                        Quorum.  The quorum for board meetings
shall not be less than five (5) Directors attending in person, by proxy or
telephone. Any resolution made in a board meeting without a quorum shall be of
no effect.  A majority of the Directors
present, whether or not a quorum is present, may adjourn any meeting to another
time and place.  Notice of any
adjournment of any meeting of the Board to another time or place shall be given
to the Directors who were not present at the time of the adjournment in the
manner specified by Article 5.6.2 hereof and,

 

12

 

unless such time and place
are announced at the meeting, to the other Directors.  The participation of the Directors in
meetings of the Board is critical to the success of the Company.  The failure of at least two (2) A or B
Directors to attend duly called regular or special meetings of the Board so as
to result in the failure to achieve a quorum for three consecutive meetings of
the Board shall constitute a material breach of the Agreement by the Party
which appointed such non-attending Directors. A board meeting (the “First
Meeting”) properly called hereunder that does not have the requisite quorum
shall automatically reconvene at the same time on the fifth (5th) Business Day
(the “Second Meeting”) from the original date of such meeting at the same place
with the same agenda.  If a quorum is
again not achieved due to the absence of the Directors appointed by the same
Party, then a third board meeting (the “Third Meeting”) shall automatically
reconvene at the same time on the fifth (5th) Business Day from the Second
Meeting date at the same place with the same agenda and the requisite quorum
shall be deemed to exist at such Third Meeting unless otherwise agreed by the
written consent of all the Directors.

 

5.6.4                        Attendance and Voting. 
Directors may be present and vote at a meeting of the Board in person,
by proxy or by telephone.  Each Director
shall have one vote.  The Chairman and
the Vice Chairman shall each have the same right of one vote accorded to each
of the other Directors.

 

5.6.5                        Participation by Telephone.  Any
member of the Board may participate in a meeting by means of conference
telephone or similar communication equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting by such means shall constitute presence in person at such meeting.

 

5.6.6                        Proxy.  Any Director who cannot
participate in person or by telephone at the meeting of the Board may present a
proxy in writing to the Board authorizing any other Director or a natural
person with legal capacity to participate at such meeting on such Director’s
behalf.

 

5.6.7                        Action Without a Meeting.  Any
action required or permitted to be taken at any meeting of the Board may be
taken without a meeting by a written resolution if such resolution is sent to
all members of the Board and affirmatively signed and adopted by the number of
Directors necessary to make such a decision as stipulated in the Articles.

 

5.6.8                        Matters Requiring Board Approval.  The
Board shall have and exercise all of the final authoritative powers belonging
or pertaining to the Company, and shall decide all major issues concerning the
Company.  Except as specifically agreed
to by the Parties, all decisions brought before the Board shall require the
approval of all the Directors present at a board meeting. The matters that
require the unanimous consent of the directors in a meeting in which a quorum
is present include, but are not limited to each of the matters listed below:

 

13

 

(1)                                  Any adoption of or amendments to the Articles
or the articles of association or other charter documents of any Subsidiary of
the Company;

 

(2)                                  Any winding up, liquidation or other
dissolution of the Company or any of its Subsidiaries;

 

(3)                                  Any change in the authorized share capital of
the Company, creation or issuance of additional Shares of or other equity or
equivalent interests in the Company or any of its Subsidiaries, transfer of the
issued Shares (other than a transfer to a Permitted Transferee), or redemption,
repurchase or cancellation of issued Shares or other equity interests in the
Company;

 

(4)                                  Any merger, consolidation, scheme of
arrangement, recapitalization or sale of all or substantially all of the
assets, of the Company or any of its Subsidiaries;

 

(5)                                  Any mortgage and pledge of, or grant of a
security interest in, the assets of the Company or any of its Subsidiaries to
any third party;

 

(6)                                  Any loan to, investment in, or guarantee of
the indebtedness of, a third party (other than a Subsidiary of the Company) by
the Company or any of its Subsidiaries;

 

(7)                                  Annual and any interim business plans, the
annual and any interim budget, including anticipated operating costs and
expenses, and the annual and any interim consolidated financial statements of
the Company and any significant change in any of the foregoing;

 

(8)                                  Significant changes to the Business of the
Company or any of its Subsidiaries, including engaging in any new line of
business or ceasing to carry on any existing line of business;

 

(9)                                  The approval and amendment of:

 

(a)                                  any contract, commitment or expenditure which
is not included in an annual or interim budget and which by itself, or together
with other contracts, commitments or expenditure which are not included in the
budget, involves total payments by the Company and its Subsidiaries that exceed
US$ 500,000 or its equivalent in any 12 month period;

 

(b)                                 any expenditure, contract or commitment
approved in the annual or interim budget which exceeds the amount provided for
in the budget by 10% or more or

 

14

 

US$500,000 or its equivalent or such higher dollar
amounts and such higher percentage as the Board may determine from time to
time;

 

(c)                                  any borrowing by the Company or any of its
Subsidiaries which would result in total debt of the Company and its
Subsidiaries exceeding US$500,000 or its equivalent other than those the
material terms of which have been specifically authorized in an annual or
interim business plan or budget of the Company; or

 

(d)                                 the disposition or transfer of assets owned
by the Company or its Subsidiaries with a value in excess of US$500,000 or its
equivalent;

 

(10)                            The commencement or settlement of
arbitration, litigation or conciliation by the Company or any of its
Subsidiaries with any third party;

 

(11)                            The appointment of a liquidation team and its
members to conduct the liquidation of the Company or any of its Subsidiaries;

 

(12)                            The appointment or termination of the
Auditors;

 

(13)                            Appointment or removal of the CEO and other
Senior Officers, or the determination of the salary and benefits for the CEO
and the other Senior Officers of the Company and any changes thereto;

 

(14)                            Determination of the scale of wages, benefits
and allowances of the workers and staff of the Company or its Subsidiaries and
any changes thereto;

 

(15)                            Declaration or payment of any dividend or
making of any distribution on or with respect to the Shares or any other share
capital of the Company;

 

(16)                            Adoption of or amendment to any share option
or similar incentive plan of the Company, the determination of key terms of the
options granted under such plan, and the grant of options to the CEO and other
Senior Officers;

 

(17)                            Any disposal of, or grant of an exclusive
license (without any right of use by the licensor) for, any intellectual
property rights or trade secrets that are material to the Business;

 

(18)                            Entering into any transaction involving the
Company or any of its Subsidiaries, on the one hand, and any Shareholder or any
of its Directors or Senior Officers or any of their respective Affiliates, on
the other hand;

 

15

 

(19)                            Effecting any increase or decrease in the
number of directors constituting the Board; and

 

(20)                            Determination of the plan of initial public
offering of the Shares, including the selection of lead underwriters and
listing venue and the determination of timing and key terms of such offering.

 

5.6.9                        Management.  The day-to-day operations of
the Company and its Subsidiaries shall be managed by executive officers
appointed by the Board.  The “B”
Directors shall have the right to nominate the CEO and the CTO of the Company
and its Subsidiaries.  The “A” Directors
shall have the right to nominate the COO and the CFO of the Company and its
Subsidiaries.  Under the direction and
authority of the CEO, these four executive officers shall manage the day-to-day
operations of the Company and its Subsidiaries as members of a Management
Committee.  The COO, CTO, CFO and
director of sales shall each report to the CEO. 
The CFO shall work with InFocus to (i) adopt internal controls over
financial reporting of the Company and its Subsidiaries that are consistent
with international standards and enable InFocus to comply with U.S. GAAP in
reporting its investment in the Company, and (ii) maintain on his or her staff
an executive or director level individual who has experience, expertise or
adequate training in compliance with financial reporting requirements under
U.S. GAAP, the Sarbanes-Oxley Act of 2002, and the regulations of the U.S.
Securities and Exchange Commission.

 

6.                                      BUSINESS SCOPE AND BUSINESS MANAGEMENT

 

6.1                                 Business Scope

 

The business scope of the Company shall include the
research, development, design, manufacture, manufacture outsourcing or supply
chain management, component sale, OEM sale, and the provision of after-sales
service and support with respect to the following joint venture products (“Joint
Venture Products”):

 

(a)                                  Optical engines for rear-projection
televisions (“RPTVs”) and such optical engines being the RPTV optical engines;

 

(b)                                 Optical engines for front projectors using
digital light processor, liquid crystal display (“LCD”), and other display
technologies; and

 

(c)                                  Front projectors;

 

16

 

6.2                                 Committed Products

 

The Parties agree that the following Joint Venture
Products shall be manufactured by the Company or its Subsidiaries on an
exclusive basis (“Committed Products”):

 

(a)                                  Products under the Stingray, V1, V2 and IROC
projects (as further described in the InFocus Technology License Agreement)
which products shall be committed by InFocus to be manufactured exclusively by
the Company or its Subsidiaries; and

 

(b)                                 Products under the HD3 project (as further
described in the TCL Technology License Agreement) which products shall be committed
by TCL to be manufactured exclusively by the Company or its Subsidiaries.

 

6.3                                 Manufacturing Schedule

 

The Parties intend that the Company will begin to
manufacture the Committed Products in the sequence as agreed between the
Parties and shall use their respective commercial best efforts to ensure that
the Company will achieve its production plan as agreed between the Parties.

 

6.4                                 Future Joint Venture Products

 

(a)                                  The Parties intend this Company to be
developed into a broad cooperation between the Shareholders on a worldwide
basis for the Business and the Joint Venture Products.

 

(b)                                 Each Party shall, and shall cause its
Affiliates to, provide the Company an opportunity to bid on all future proposed
requirements of Joint Venture Products, including a reasonable period of time
to prepare its bid and discuss the Requirements with such Party.  The Company shall have the right to
manufacture a future proposed product required by a Party exclusively if the
Company’s bid meets each of the following conditions (“Requirements”):

 

(i)                                     the Landed Price of the product as quoted by
the Company are not less advantageous to such Party or its Affiliates than bids
received from other manufacturers for such product;

 

(ii)                                  the Company demonstrates an ability to meet the
technical specifications, production schedule, warranty and quality
specifications and terms of delivery for such product; and

 

(iii)                               manufacture of such product by the Company is
not prohibited under the terms of an agreement in effect prior to the date of
this Agreement.

 

(c)                                  In the event that a key customer of a Party
for a proposed product indicates that it will only purchase such product if it
is not manufactured by the Company, such Party shall use its commercial

 

17

 

best efforts to arrange a meeting between the
Company and such customer and to resolve any concerns raised by such
customer.  If the Party and the Company
fail to resolve the objection of such customer after thirty (30) Business Days
and commercial best efforts have been made by the Party to resolve such
objection, the Party may allow a third party to manufacture for such customer.

 

(d)                                 If the Company declines to bid or fails to
meet the Requirements for the future proposed product, the Party and its
Affiliates will be free to accept another bid on the product and source it at
their discretion from such bidder, provided that the notice by such Party
requesting for a bid and the accepted bid shall contain terms of Requirements
that are equivalent to those offered to the Company.

 

(e)                                  The Parties acknowledge that InFocus
currently utilizes and will continue to utilize other contract manufacturers to
manufacture certain Joint Venture Products on behalf of InFocus, subject to the
provisions of Articles 6.1, 6.2, 6.3 and 6.4, including specifically
obligations set forth in Articles 6.4(b).

 

6.5                                 Conduct of the Business

 

Each of the Parties agrees to exercise its
respective rights hereunder and as a shareholder of the Company (insofar as it
lawfully can) so as to ensure that:

 

6.5.1                        the Company performs and complies with all
obligations on its part under this Agreement and complies with the restrictions
imposed upon it under the Articles; and

 

6.5.2                        the Business is conducted in accordance with
sound and good business practice and the highest ethical standards.

 

6.6                                 Management of the Business

 

6.6.1                        The Business shall be under the overall
management of the Board.  The Board shall
be responsible for determining the overall policies and objectives of the
Company.

 

6.6.2                        The Parties shall procure that the Board and
the Company make the following business management arrangements for the WFOE:

 

(a)                                  Management of the WFOE. 
Similar to the Company, the day-to-day operation and management of the
WFOE shall be under the direction of the CEO of the WFOE and managed by a
management committee of senior officers. 
The Parties shall nominate the Senior Officers of the Company to the
equivalent positions at the WFOE and shall cause the board of directors of the
WFOE to appoint and remove such Senior Officers of the WFOE at the same time as
they are appointed or removed as Senior Officers of the Company.

 

18

 

(b)                                 Term of Office.  The
CEO, the COO the CTO and the CFO shall, unless they became incapacitated,
retire or are removed from office earlier by the board of directors of the
WFOE, hold office for a term of three (3) years each and shall be eligible for
appointment for further terms.  The CEO,
the COO, the CTO, and the CFO may serve consecutive terms if reappointed by the
board of directors of the WFOE.  The
terms of service for the other officers shall be specified in an employment
contract.

 

(c)                                  Power of Board to Dismiss Officers.  The
board of directors of the WFOE may, by a resolution, remove the CEO, the COO,
the CTO or the CFO of the WFOE in accordance with the terms of their respective
employment contract and PRC law.  Unless
decided otherwise by the board of directors of the WFOE, the authority to
appoint and dismiss the other Senior Officers of the WFOE is delegated to the
CEO, who shall consult with and obtain consensus from the other members of the
management committee on such decisions.

 

(d)                                 Responsibilities of the CEO and Other
Officers.  The responsibility of the CEO shall be to
carry out the various decisions of the board of directors of the WFOE and to
organize and manage its daily business. 
Without the specific approval of the board of directors of the WFOE, the
CEO, the COO, the CTO and the CFO of the WFOE shall not simultaneously occupy
any operational position in any other economic organizations nor shall such
persons participate in any economic activity which may directly compete with
the interests of the WFOE.

 

(e)                                  Corporate Secretary.  The
WFOE shall have a corporate secretary who shall serve for a term of three (3)
years and be responsible for keeping the corporate books and records of the
WFOE, including the minutes of meetings of the board of directors.  The Parties will alternate the right to
appoint the secretary.

 

6.6.3                        TCL shall use all reasonable efforts to
assist the Company in the following matters related to the Company at the
expense of the Company except as otherwise provided hereinafter:

 

(a)                                  any matters involving PRC governmental
departments or agencies, including but not limited to tax holidays for the WFOE
and pending land lease;

 

(b)                                 working with local China banks to seek bank
financing for the WFOE;

 

(c)                                  working with TTE to secure additional
manufacturing space at other existing TTE manufacturing locations around the
world at reasonable lease rates;

 

19

 

(d)                                 the establishment of both RMB and U.S. dollar
current and capital accounts of the WFOE;

 

(e)                                  the submission of applications for all necessary
approvals, permits, certificates and licenses required in connection with the
conduct of the WFOE’s business for domestic and export sale of product;

 

(f)                                    the completion of all import formalities
including obtaining any required PRC import licenses for, and transporting to
the WFOE’s facilities from the designated port of entry in China, all materials
and equipment to be imported by the WFOE;

 

(g)                                 on behalf of the expatriate personnel of the
WFOE, to provide assistance in arranging PRC entrance and exit formalities,
work permit certificates and assist in finding accommodations compatible with
the style and standard of living of such personnel in their respective home
countries and assist such employees in making all PRC domestic travel
arrangements;

 

(h)                                 application for and obtaining the maximum
benefit of all permitted reductions in, or exemptions from, PRC income taxes
(including withholding taxes), import duties, value added, business and
consumption taxes, local surcharges, real estate taxes, vehicle taxes or any
other tax reductions, rebates or exemptions to which the WFOE is currently or
may in the future become entitled;

 

(i)                                     WFOE certification as a “technically advanced
enterprise” and in applying for the appropriate confirmation certificates and
associated benefits for the sale of Joint Venture Products to the Parties for
domestic and export consumption;

 

(j)                                     obtaining from the appropriate PRC
authorities all necessary licenses and foreign exchange approvals to permit the
repatriation out of the PRC of all profits, dividends, return of capital,
proceeds of liquidation and sale of equity interest in foreign exchange, after
the payment of applicable PRC income taxes, if any;

 

(k)                                  obtaining from the appropriate PRC
authorities all necessary licenses and foreign exchange approvals to permit the
repatriation of the salaries and benefit payments in foreign exchange of the
expatriate personnel of the WFOE, after payment of applicable PRC income taxes;

 

(l)                                     helping the Company develop the capability to
design and manufacture the Committed Products as soon as practicable; and

 

20

 

 

(m)                               at TCL’s own expense, securing the land use
rights for the land to be leased to the WFOE pursuant to a lease agreement for
a reasonable fair market rate as approved by the Board.

 

6.6.4                        InFocus shall use all reasonable efforts to
assist the Company in the following matters related to the Company at the
expense of the Company:

 

(a)                                  to develop its financial planning, corporate
governance and reporting systems in accordance with SEC and SARBOX regulations;

 

(b)                                 to utilize advanced computerized scientific management
systems;

 

(c)                                  to instruct and train selected PRC technical
personnel and staff of the Company in the PRC, including the application and
usage of intellectual property rights licensed to the Company and other
know-how necessary to manufacture the Joint Venture Products and conduct the
Business;

 

(d)                                 to prepare, submit and monitor applications
to obtain all required U.S. governmental approvals, including any required U.S.
export licenses or licenses covering the export of technology, equipment, software,
technical data or related materials from the U.S. to the PRC in connection with
the transactions contemplated hereby or under the InFocus Technology License
Agreement;

 

(e)                              to assist the WFOE in procuring equipment,
raw materials and supplies manufactured outside of the PRC;

 

(f)                                    to assist the relocation of expatriate staff
to their home countries;

 

(g)                                 to establish or assist in establishing the
U.S.A. and Norwegian Subsidiaries of the Company and complete the transfer of
adequate research and development assets and resources to those Subsidiaries
and to establish a world-class research and development capability for the
Company; and

 

(h)                                 to help the Company develop the capability to
design and manufacture the Committed Products as soon as practicable.

 

6.7                                 Sale of Joint Venture Products and Use of
Trademarks

 

6.7.1                        The Parties agree that the Company shall have
full authority in selling the Joint Venture Products worldwide as components or
on an OEM basis, including the pursuit of the following business models:

 

21

 

(a)                                  Optical Engines: The Company will supply Optical Engines to
the Parties and other television and projector manufacturers worldwide;

 

(b)                                 Front Projectors: The Company will supply Front Projectors to
the Parties and other manufactures on an OEM basis;

 

(c)                                  The Company shall carry out its own sourcing
activities and order components directly from the suppliers.

 

6.7.2                        Under a separately negotiated agreement, TCL
shall have the right to sell and distribute front projectors under the
trademarks of InFocus.  TCL may under
separately negotiated terms become a distributor or reseller of InFocus branded
products in the PRC (which for purposes of this agreement shall exclude the
special administrative regions of Hong Kong, and Macau and Taiwan province) and
third countries as may later be agreed upon. 
InFocus may under separately negotiated terms become a distributor or
reseller of TCL branded products.

 

6.7.3                        The Parties may purchase the Joint Venture
Products from the Company on a non-exclusive basis except as otherwise
described herein, including Articles 6.2 and 6.4.  The pricing of the Joint Venture Products to
be supplied by the Company to either Party shall be equivalent to or better
than the pricing offered to any other customer on products of the same or
equivalent bill of materials, regardless of purchasing volume.  Such pricing to each Party shall continue for
ten (10) years and thereafter as long as the respective Party maintains a ten percent
(10%) or more equity ownership in the Company on a fully-diluted basis.  In the event of supply shortage, the Company
shall use its commercial best efforts to allow the Parties to obtain preferred
and sufficient supply before orders from other customers are accepted or
fulfilled unless the Company is obligated to accept or fulfill such orders by
contract.

 

6.8                                 Research and Development

 

6.8.1                        The Parties shall transfer certain research
and development (“R&D”) personnel (the “Transferred R&D Resources”)
that are related to the R&D, design or manufacturing of the Joint Venture
Products as agreed between the Parties as part of or prior to the
Completion.  Under separately negotiated
agreements other assets of the Parties may be purchased or leased from the
Parties.  The Parties shall also make
available on a consultancy basis to the Company other R&D resources and
otherwise cooperate with and support the Company in optimizing its R&D
activities.

 

6.8.2                        The Parties shall contribute the Transferred
R&D Resources being transferred from them respectively to the Company on
the Completion Date free and clear of any liabilities, obligations or expenses
of any kind, whether accrued, contingent or otherwise, including employee
retirement obligations or other employee benefits or obligations with

 

22

 

respect to personnel being transferred to the
Company that have accrued as of, or are related to the period of their
employment with the Party prior to, the Completion Date unless such personnel
has been specifically hired by the Party for the Company.

 

6.8.3                        A Party may under its sole business
discretion allow the Company to test, utilize, license and purchase the Party’s
Developed Components (as defined below) and New Projection Technology (as
defined below), including the right to purchase certain quantities exclusively
during an initial period following the commercial launch of such
components.  The Party shall provide MFN
pricing to the Company for licensing Developed Components and New Projection
Technology.

 

“Developed Components” include components, software,
integrated circuits and other parts and applications developed by the Party or
any of its Subsidiaries and Affiliates or jointly developed by the Party or any
of its Affiliates and Subsidiaries and any other person or entity from time to
time that can be used by the Company in connection with the development, design
or manufacture of any of the Joint Venture Products.

 

“New Projection Technology” of a Party means Intellectual
Property (as defined in the Technology License Agreements) discovered, made,
conceived, reduced to practice or developed by the Party or its Affiliates or
Subsidiaries or jointly developed by the Party or any of its Affiliates and
Subsidiaries with any other person or entity from time to time that can be used
by the Company in connection with the development, design or manufacture of any
of the Joint Venture Products.

 

Notwithstanding the foregoing, except as may be
otherwise agreed or with respect to those that are jointly developed, all
intellectual rights of Developed Components and New Projection Technology shall
remain the property of the Party that has developed it.

 

6.9                                 Future
Ventures

 

Neither InFocus nor TCL shall create a
joint venture with a third party involving the Joint Venture Products that is
comparable to the joint venture arrangement contemplated herein in terms of
scale and commitment from such Party as long as such Party holds an equity
ownership of more than ten percent (10%) of the Company or the Company is not
in bankruptcy, receivership or liquidation.

 

6.10                           TTE.  TCL agrees to use its
commercial best efforts to cause TTE to offer InFocus terms that are at least
as favorable to InFocus as those TTE offers to third party customers under
similar circumstances in connection with the purchase of RPTVs or other thin
displays by InFocus from TTE.

 

23

 

7.                                      BUDGETS, FINANCIAL
INFORMATION AND AUDIT

 

7.1                                 The Company shall prepare and submit to the
Directors and to the Shareholders:

 

(i)                                     on or before December 1 in each fiscal
year a detailed draft operating budget for the Company and its Subsidiaries
(including estimated major items of revenue and capital expenditure) for the
following year, broken down on a monthly basis, and an accompanying cash flow
forecast, together with a balance sheet showing the projected position of the
Company and its Subsidiaries as at the end of the following fiscal year;

 

(ii)                                  within three weeks after the end of each
calendar month, unaudited management accounts, such accounts to include a
detailed profit and loss account, balance sheet and cash flow statement, an
analysis of revenue, a review of the budget, together with a reconciliation of
results with revenue and capital budgets for the corresponding month, and (if
so required by the Board) a statement of the source and application of funds
for such month; and

 

(iii)                               such further information as the Shareholders
may from time to time reasonably require as to any and all matters relating to
the business or financial condition of the Company or any of its Subsidiaries.

 

7.2                                 Annual Audit and Annual Accounts.  The
Auditors shall examine and verify the annual accounts (“Annual Accounts”) of
the Company and its Subsidiaries. Such Auditors shall submit its report to the
Board.  The Company shall submit to the
Parties the Annual Accounts within seventy-five (75) days after the end of the
fiscal year, together with the audit report of the independent Auditors.

 

7.3                                 Special Audit.  A
Party may appoint on its own behalf and at its own expense an accountant of its
choice, who may be either an accountant registered in the PRC or registered
elsewhere to audit the accounts of the Company and its Subsidiaries.  If the results of any such audit are
significantly different from that conducted by the independent Auditors of the
Company and are accepted by the Board, the expense shall be borne by the
Company.  Such accountant shall keep
confidential all the documents audited by him or her.  The Company will permit such accountant to
have access to the books and records of the Company and its Subsidiaries and
will provide him or her with office space and all other reasonable assistance
to enable him or her to carry out the audit.

 

8.                                      DISTRIBUTION POLICY AND DETERMINATION OF NET PROFIT

 

The Shareholders shall take such action as may be
necessary to procure that:

 

8.1                                 The Annual General Meeting of the Company at
which consolidated audited accounts in respect of the preceding fiscal year are
laid before the

 

24

 

Shareholders is held not later than four months
after the end of the relevant fiscal year or such accounts are otherwise
provided to and approved by the Shareholders in accordance with the Articles;

 

8.2                                 The Auditors shall at the expense of the
Company be instructed to report as to the amount of the profits for each
accounting period which are available for distribution by the Company at the
same time as they sign their report on the Audited Accounts for the accounting
period in question;

 

8.3                                 The Board shall determine the amount of
distribution of profits (if any) to the Shareholders in each fiscal year
provided that such distribution may not exceed profits lawfully available for
distribution after the appropriation of such reasonable and proper reserves for
working capital, capital expenditure or otherwise as the Board may think
appropriate or called for by the business plan of the Company.

 

9.                                      FINANCE FOR THE COMPANY

 

9.1                                 The Shareholders acknowledge that, in
addition to capital to be subscribed pursuant to Article 4, the Company
will require further cash infusions in order to fund its operations through the
WFOE.  InFocus  and TCL may, but are not obligated to, provide such further
finance by means of further capital injection or shareholder loans in
proportion to their respective holdings of shares in the Company and on such
commercial terms as they may agree with the Company.

 

9.2                                 If the Company requires additional financing
in addition to that provided by the Shareholders pursuant to Articles 4 and
9.1, it shall endeavor to obtain such financing from a third party lender.  If additional equity investment is required
from the Shareholders or third parties, the Shareholders will seek to complete
such investment in a manner that maintains their equal equity ownership in the
Company.

 

9.3                                 It is the intention of the Parties to
complete an underwritten public offering of the Company’s securities at the
earliest practicable date subject to the development of the Business and market
conditions.

 

10.                               TRANSFER OF SHARES

 

10.1                           Except with prior
written consent of the other Party or as hereinafter provided, no Shareholder
shall pledge, mortgage or otherwise encumber its legal or beneficial interest
in its Shares.

 

10.2                           Except as hereinafter provided, no Party may
transfer or sell all or any part of its Shares of the Company in any manner
whatsoever without the prior written consent of the other Party.

 

25

 

10.3                           Notwithstanding the provisions of Article 10.2,
a Party may transfer or sell all or any part of its Shares of the Company to a
Permitted Transferee of that Party upon notification to the other Party.  With respect to any such transfer or sale,
such other Party hereby agrees to any such transfer or sale and waives any
right of first refusal with respect to such transfer or sale and agrees to
perform all such acts required to effect such transfer or sale for which it is
responsible; provided, that the Permitted Transferee shall be required
to become a party to this Agreement by signing a Deed of Adherence
substantially in the form of Exhibit A; and, provided  further,
the Party making such transfer shall remain subject to all the terms and
conditions of this Agreement and shall guarantee the performance of all
obligations of the Permitted Transferee.

 

10.4                           If either Party shall desire to transfer or
sell its Shares of the Company to any third party other than a Permitted
Transferee of such Party, such Party (the “Transferring Party”) shall secure a
binding written offer from such third party (the “Third Party Offer”) to
purchase some or all of its Shares of the Company (the “Transferring Party’s
Shares”) and the other Party to this Agreement (the “Non-Transferring Party”)
shall have an option, exercisable within thirty (30) Business Days of receiving
notification of the Third Party Offer together with details of the identity,
financial condition and identity of the controlling shareholder or shareholders
of such third party, to purchase the Transferring Party’s Shares as specified
in this Article on the same terms and conditions as the Third Party
Offer.  Such option shall be exercised by
such Non-Transferring Party giving written notice to the Transferring Party of
its exercise of such option.  If the
Non-Transferring Party exercises its option within such 30 Business Day period
to purchase the Transferring Party’s Shares, then, unless such Third Party
Offer is withdrawn within the first ten (10) Business Days of such period, the
Transferring Party’s Shares shall be sold to such Non-Transferring Party on the
same terms and conditions as the Third Party Offer.

 

10.5                           If the Non-Transferring Party does not
exercise its option within such 30 Business Day period, the Transferring Party
may, subject to obtaining the prior written consent of such Non-Transferring
Party (which consent shall not be unreasonably withheld), transfer the
Transferring Party’s Shares to such third party, provided that such third party
shall not be a competitor of the Company or the Non-Transferring Party, and
provided further that such third party shall sign a Deed of Adherence in the
form of Exhibit A.

 

11.                               AMENDMENT AND ALTERATION OF THE AGREEMENT

 

11.1                           Amendments.  Any amendment to this Agreement
must be in writing and signed by the Parties.

 

11.2.                        Economic Adjustment and Change in Law.  If
either Party’s economic benefits are adversely and materially affected by the
promulgation of any new laws, rules or regulations of any jurisdictions, or the
amendment or interpretation of any existing laws, rules or regulations after
the date of this Agreement (a

 

26

 

“Change in Law”), the Parties shall promptly consult
with each other and use their commercial best endeavors to implement any
adjustments necessary to maintain each Party’s economic benefits derived from
this Agreement on a basis no less favorable than the economic benefits it would
have derived if such laws, rules or regulations had not been promulgated or
amended or so interpreted.

 

12.                               TERMINATION AND BUY OUT

 

12.1                           Termination Events.  This
Agreement can be terminated through the process in Article 12.2 beginning
with the motion by the Party indicated below if any of the following events or
conditions (a “Termination Event”) has occurred:

 

12.1.1                  Upon the motion of either Party, if the
holders of the “A” Shares and the “B” Shares agree in writing to terminate this
Agreement;

 

12.1.2                  Upon the motion of either Party, if a Change
in Law occurs and the Parties are unable to agree upon necessary adjustments
within a 90 day period after the occurrence of the Change in Law or are unable
to implement any such adjustments to give effect to the provisions of Article 11.2
within a 180 day period after the occurrence of the Change in Law;

 

12.1.3                  Upon the motion of the non-breaching Party,
if a Party shall commit a material breach of this Agreement the effect of which
would have a material adverse effect on the financial condition or business
operations of the Company, and such Party fails to remedy such material breach
within a period of sixty (60) days after notice in writing from the other Party
or the Board to remedy such breach;

 

12.1.4                  Upon the motion of the other Party, if any
representation or warranty made by a Party contained in Article 3 of this
Agreement shall have been incorrect in any material respect when made or on the
Completion Date;

 

12.1.5                  Upon the motion of either Party, if a
bankruptcy or similar proceeding has been commenced by or against the Company
or the WFOE; or

 

12.2                           Notification Procedure.  Upon
the occurrence of a Termination Event described in Articles 12.1.2 or 12.1.5,
either Party may notify in writing the other Party and the Chairman of the
Board that a Termination Event has occurred. 
Upon the occurrence of a Termination Event described in Articles 12.1.3
or 12.1.4, the Party entitled to make a motion to terminate may notify in
writing the defaulting Party and the Chairman of the Board that a Termination
Event has occurred.  Within thirty (30)
days of any such notification, the Parties shall commence negotiations and
endeavor to resolve the reason for the Termination Event.  In the event matters are not resolved to the
satisfaction of the Parties within thirty (30) days after commencement of
negotiations or the non-notifying Party refuses to commence negotiations within
such thirty (30) day period or such Terminating Event is of a nature that
cannot be

 

27

 

reasonably expected to be resolved, the notifying
Party may give the other Party and the Chairman of the Board written notice of
termination (a “Termination Notice”).

 

12.3                           Proceed to Liquidation.  If a
Termination Notice is given pursuant to Article 12.2 hereof with respect
to a Termination Event described in Article 12.1.2, unless the Parties
agree at the time such Termination Notice is given that the provisions of Article 12.4
should apply with respect to such Termination Event (in which case the
provisions of Article 12.4 shall apply), the Company will be liquidated.

 

12.4                           Buy-Out Provision.  (a)
If a Termination Notice is given pursuant to Article 12.2 hereof with
respect to a Termination Event described in Articles 12.1.3 or 12.1.4, then
unless otherwise agreed by the Parties that the provisions of this Article 12.4
shall not apply (in which case the Company shall either be sold on such terms
and conditions agreed by the Parties at such time, or failing such agreement,
liquidated), or (b) if a Termination Notice is given pursuant to Article 12.2
hereof with respect to a Termination Event described in 12.1.2 hereof and the
Parties agree at the time such Termination Notice is given that the provisions
of this Article 12.4 should apply to such Termination Event, the Party
entitled to provide a notice of termination in Article 12.1 shall have the
right to buy the other Party’s interest in the Company at its Fair Market
Value.

 

12.4.1                  Determination of the Fair Market Value.  The
Fair Market Value of the Company will be determined by an investment bank,
accounting firm or other appraiser with experience in valuing companies in the
consumer electronics industry of a comparable size (an “Appraiser”).  In the event the Board fails to appoint an
Appraiser within such thirty (30) days after such Party elects to buy to the
other Party’s interest period, each of TCL and InFocus will appoint an
Appraiser within fifteen (15) days thereafter. 
Should either TCL or InFocus fail to appoint its Appraiser within such
15 day period, then the Appraiser appointed in a timely fashion by the other
Party shall determine the Fair Market Value of the Company alone.  Such Appraiser or Appraisers, as the case may
be, shall complete their assessment of the Fair Market Value of the Company and
notify the Parties thereof in writing within forty-five (45) days of their
appointment.  If more than one Appraiser
is used and the assessments of the Appraisers provide values such that the
higher one is not more than 15% greater than the lower one, the average of the
two values will be taken as the Fair Market Value of the Company.  If the valuations differ by more than 15%,
TCL and InFocus will jointly appoint an additional Appraiser to perform a third
valuation.  If the Parties are unable to
agree on the selection of the third Appraiser within fifteen (15) days, either
Party may request the Chairman of the
Singapore International Arbitration Centre to appoint the third
Appraiser and the choice of such third Appraiser by the Chairman of the Singapore International Arbitration Centre
shall be binding on the Parties.  In such
circumstance, the Fair Market Value of the Company will be determined by
ascribing a weighting of 50% to the middle

 

28

 

valuation of the three valuations and the other two
valuations will be weighted at 25% each.

 

12.4.2                  If a Party exercises the right to purchase
the interest of the other Party in the Company, the purchasing Party must
complete such purchase within ninety (90) days after the Fair Market Value of
the other Party’s interest in the Company has been determined.  The Parties agree to take such steps as may
be advisable to implement the sale of the selling Party’s interest in the
Company, including obtaining all necessary government approvals for the
transfer of all of the selling Party’s interest in the Company to the
purchasing Party (or its designee) and the selling Party agrees to take all
such action, including causing the members of the Board designated by it to
approve such transfer, and to execute all documents necessary or advisable to
effect such transfer.

 

12.4.3                  Until such time as the sale of the interest
of one Party in the Company to the other Party is completed, the Company will,
to the fullest extent possible, maintain the conduct of its Business in the
ordinary course and neither Party shall hinder the Company from the conduct of
its Business.

 

12.5                           Deadlock Resolution.  If
the Board is unable to make a determination on any matter material to the
operation of the Company (provided that the continued failure or
inability to resolve or otherwise determine any such matter shall be of such a
nature as could materially adversely affect the financial condition or business
operations of the Company) after due consideration of such matter at two or
more meetings of the Board held within a period of not less than forty-five
(45) days nor more than sixty (60) days (hereinafter a “Deadlock”), either
Party may declare the occurrence of a Deadlock, by written notice thereof to
the other Party setting out its position on the matter in dispute and its
reasons for adopting such position.  Each
such notice shall be considered by the CEO of each of the Parties, who shall
communicate with each other and shall each use reasonable good faith efforts to
resolve such Deadlock within sixty (60) days or within any mutually agreed
extension of such period.

 

12.5.1                  If the Parties cannot reach agreement on the
Deadlock and the issue has not been submitted for resolution pursuant to Article 26
hereof, either of the Parties (the “Pricing Party”) shall have the right,
exercisable for thirty (30) Business Days thereafter to indicate its intention
to sell the equity interest it holds in the Company to the other Party (the “Deciding
Party”) in writing in the form of a notice (the “Deadlock Notice”).  The Deadlock Notice shall specify the price
at which the Pricing Party is willing, able and prepared to sell all (but not
part) of the interest it owns in the Company (the “Sale Interest”) to the
Deciding Party (the “Deadlock Price”) and may not be conditional on any term
other than the receipt of the Deadlock Price.

 

12.5.2                  The Deadlock Notice shall be deemed to:

 

29

 

(i)                                     constitute an irrevocable offer by the
Pricing Party, open for acceptance by the Deciding Party for thirty (30)
Business Days from the date of service of the Deadlock Notice (the “Purchase
Period”), to sell all (but not less than all) of the Sale Interest owned by it
to the Deciding Party at the Deadlock Price; and

 

(ii)                                  constitute an alternative irrevocable offer
by the Pricing Party to purchase all (but not less than all) of the Sale
Interest owned by the Deciding Party within the Purchase Period at the same
Deadlock Price.

 

12.5.3                  The Deciding Party may at any time before the
expiry of the Purchase Period serve notice in writing upon the Pricing Party of
its desire to purchase the Sale Interest of the Pricing Party on the terms set
out in this Article 12.5 (a “Purchase Notice”) which may not be expressed
to be subject to fulfillment of any condition whatsoever (other than those
conditions required by the applicable Law). 
Upon service of a Purchase Notice on the Pricing Party, the Pricing
Party shall be bound to sell (upon payment of the Deadlock Price), and the Deciding
Party who has served a Purchase Notice shall be bound to purchase (at the
Deadlock Price), all of the Sale Interest owned by the Pricing Party, which the
Pricing Party shall transfer, free from all claims, liens and encumbrances,
together with all rights attached thereto at the date of service of the
Deadlock Notice.

 

12.5.4                  If the Pricing Party has not received a
Purchase Notice before the expiry of the Purchase Period, the Deciding Party
shall be deemed to have declined the offer by the Pricing Party to sell
referred to in this Article 12.5.2(i) and the Deciding Party shall be
bound to sell (upon payment of the Deadlock Price), and the Pricing Party shall
be bound to purchase (at the same Deadlock Price), all of the Sale Interest
owned by the Deciding Party, which the Deciding Party shall transfer, free from
all claims, liens and encumbrances, together with all rights attached thereto
at the date of service of the Deadlock Notice.

 

12.5.5                  Either the Pricing Party or the Deciding
Party, which is to purchase all of the Sale Interest pursuant to this Article 12.5,
shall have the right to designate a third party who may, either alone or
together with such party, purchase the Sale Interest in the Company pursuant to
this Article 12.5.

 

12.5.6                  The sale and purchase of the Sale Interest
shall comply with applicable law.  Unless
otherwise agreed between the Parties, the sale and purchase of the Sale
Interest shall be completed within fourteen (14) Business Days, when all of the
relevant government approvals are received and the registration of the transfer
of such Sale Interest is completed.

 

12.5.7                  For the purposes of this Article 12.5,
the Deciding Party shall be deemed to have authorized the Company to take all
actions necessary on behalf of the Deciding Party to effectuate the sale of the
Deciding

 

30

 

Party’s Sale Interest if the Deciding Party does not
timely serve a Purchase Notice.  Time is
of the essence and the receipt by the Pricing Party of any Purchase Notice
after the end of the Purchase Period shall have no binding force and effect.

 

12.5.8                  Until such time as the sale or purchase of
the Sale Interest of one Party in the Company to the other Party is completed,
the Company will, to the fullest extent possible, maintain the conduct of its
Business in the ordinary course and neither Party shall hinder the Company from
the conduct of its Business.

 

12.6                           Termination of Other Agreements.  If
the Company is liquidated pursuant to Article 12.3 or upon one Party’s
interest in the Company being purchased by the other Party in accordance with
Articles 12.4 or 12.5, the Related Contracts shall become terminable by any
Party thereto, provided that in the event of such purchase by a Party pursuant
to Section 12.4(a), the other Party may not terminate its Technology License
Agreement with the Company as a result of such purchase hereunder.

 

12.7                           Remedies For Breach.

 

12.7.1                  The exercise of the right of a Party to
terminate this Agreement, as provided herein, does not preclude such Party from
exercising other remedies that are provided herein or are available for breach
of contract under Hong Kong law.

 

12.7.2                  Subject to the other provisions of this
Agreement, a Party shall be entitled to compensation for any loss, cost and
expense which such Party has suffered as a result of the breach of this
Agreement by the other Party.  No Party
shall be liable to the other Party for any indirect, special, incidental,
consequential or punitive damages with respect to any claim arising out of,
under or in connection with this Agreement whether based upon contract, tort
(including negligence), strict liability or otherwise.

 

13.                               DURATION

 

13.1                           Except as otherwise provided herein, this
Agreement shall continue in full force and effect until the Shareholders agree
in writing to terminate this Agreement.

 

31

 

14.                               RIGHTS TO INFORMATION AND CONFIDENTIALITY

 

14.1                           Rights of Inspection and Information

 

The Company shall permit any Director designated by
a Shareholder in writing, at the requesting Shareholder’s expense, to discuss
the affairs, finances and accounts of the Company and its Subsidiaries
(provided such Director does not have a conflict of interest with the conduct
of business with the Company) with the Company’s and its Subsidiaries’ officers
and other principal executives all at such time as may reasonably be requested,
and all books, records, accounts, documents and vouchers relating to the
business and the affairs of the Company and its Subsidiaries shall at such time
be open to the inspection of any such person, who may make such copies thereof
or extracts therefrom as such person may deem appropriate.  Any information secured as a consequence of
such discussions and examinations shall be kept strictly confidential by the
requesting Shareholder.

 

14.2                           Confidentiality

 

14.2.1                  Except in circumstances where the prior
consent of the other Party has been obtained and during the continuance of the
Company and for a period of six (6) years after its termination, no Party to
this Agreement shall, nor shall it permit any of its directors, officers,
employees and agents or the Directors of the Company to, divulge to any person
any trade secret, or secret process, method or means, or any other confidential
information concerning the business of the Company and its Subsidiaries or any
Party that comes to the knowledge of such Party or employee by reason of its or
his being a Party hereto or employee of the Company or any Party unless and to
the extent that the Party involved shall obtain such rights previously owned by
the Company and unless and to the extent that (i) the disclosure is required by
law or stock exchange rules or (ii) such information is or becomes public
knowledge otherwise than through the breach of this Agreement or (iii) such
information was obtained from a third party having no obligation of
confidentiality with respect to such information.  Each Party shall advise its directors,
officers, employees and agents receiving such information of the existence of
and the importance of complying with the obligations set forth in this Article,
including by the inclusion of confidentiality provisions in the employment or
other contracts entered into with such persons.

 

14.2.2                  At all times hereafter and unless required by
applicable laws of any jurisdiction, no Party shall issue any press release or
an announcement or other public statement with respect to this Agreement, the
Company or the transactions contemplated hereby which relates to (i) any
dispute or difference of opinion between the Parties, (ii) any information of a
confidential or proprietary nature concerning or relating to the terms of this
Agreement, or (iii) any information which could affect adversely the reputation
of the Company or any Party, without the prior approval of the Board,

 

32

 

unless otherwise, and to the extent, required by law
or stock exchange rules.

 

14.2.3                  Each Party shall consult with the other Party
before it makes, or permits any of its officers and representatives to make,
any public announcement or statement with respect to significant information or
terms of the transactions contemplated by this Agreement and the other related
agreements, and shall not make, or permit any of its officers and
representatives to make, such public announcement or statement without the
consent from the other Party except to the extent such Party is required by
stock exchange rules or other applicable Laws to make such disclosure, in which
case it shall give the other Party a reasonable opportunity to comment on the
proposed disclosure in advance.

 

14.2.4                  Notwithstanding Articles 14.2.1, 14.2.2 and
14.2.3, the Shareholders may at any time disclose any such information and
communications to their Affiliates and professional advisors.

 

15.                               REMEDIES

 

15.1                           No remedy conferred by any of the provisions
of this Agreement is intended to be exclusive of any other remedy which is
otherwise available at law, in equity, by statute or otherwise, and each and
every other remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law, in equity, by
statute or otherwise.  The election of
any one or more of such remedies by any of the parties hereto shall not
constitute a waiver by such party of the right to pursue any other available
remedy.

 

16.                               TIME

 

16.1                           Time shall be of the essence as regards the
provisions of this Agreement, both as regards the times and periods mentioned
herein and as regards any times or periods which may, by agreement between the
Parties, be substituted for them.

 

17.                               SEVERABILITY

 

17.1                           If any provision of this Agreement or part
hereof is rendered void, illegal or unenforceable in any respect under any law,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

 

33

 

18.                               SURVIVAL OF RIGHTS, DUTIES
AND OBLIGATIONS

 

18.1                           Termination of this Agreement for any cause
shall not release a Party from any liability which at the time of termination
has already accrued to another Party or which thereafter may accrue in respect
of any act or omission prior to such termination.

 

19.                               COSTS

 

19.1                           Each party shall bear its own costs and
expenses incurred by it in connection with this Agreement, whether or not the
Parties consummate the transactions contemplated under this Agreement,

 

20.                               ENTIRE AGREEMENT

 

20.1                           This Agreement (together with the Schedules
and Exhibits hereto) constitutes the entire agreement between the Parties and
save as otherwise expressly provided, no modification, amendment or wavier of
any of the provisions of this Agreement shall be effective unless made in
writing specifically referring to this Agreement and duly signed by the Parties
hereto.

 

21.                               CONFLICT WITH THE ARTICLES

 

21.1                           In the event of any ambiguity or discrepancy
between the provisions of this Agreement and the Articles, then it is the
intention that the provisions of this Agreement shall prevail and accordingly
the Parties shall exercise all voting and other rights and powers available to
them so as to give effect to the provisions of this Agreement and shall
further, if necessary, procure any required amendment to the Articles.

 

22.                               NO PARTNERSHIP

 

22.1                           Nothing in this Agreement shall be deemed to
constitute a partnership between the Parties hereto nor constitute any Party
the agent of any other Party for any purpose.

 

23.                               NOTICE

 

23.1                           All notices or other communications under
this Agreement shall be in writing and shall be delivered or sent to the
correspondence addresses or facsimile numbers of the Parties set forth below or
to such other addresses or facsimile numbers as may be hereafter designated in
writing on seven (7) days’ notice by the respective Parties.

 

34

 

	
  If to InFocus:

  	
  Director of Legal Affairs

  
	
   

  	
  InFocus Corporation

  
	
   

  	
  Attn: Jennifer Yruegas

  
	
   

  	
  27700 SW Parkway Ave.

  
	
   

  	
  Wilsonville, Oregon 97070

  
	
   

  	
   

  
	
  With copy to:

  	
  CEO

  
	
   

  	
  InFocus Corporation

  
	
   

  	
  27700 SW Parkway Ave.

  
	
   

  	
  Wilsonville, Oregon 97070

  
	
   

  	
   

  
	
  If to TCL:

  	
  TCL Corporation

  
	
   

  	
  Attn: Yu Feng

  
	
   

  	
  Building A, 3rd Floor

  
	
   

  	
  5 Central Industrial Grand Avenue

  
	
   

  	
  Shekou, Shenzhen, PRC 518067

  
	
   

  	
   

  
	
  With copy to:

  	
  Paul, Weiss, Rifkind,
  Wharton & Garrison

  
	
   

  	
  Attn: Jack Lange

  
	
   

  	
  12/F, 3A Chater Road

  
	
   

  	
  Central, Hong Kong

  

 

23.2                           All such notices and communications shall be
effective (i) when delivered personally; (ii) when sent by telex, telefacsimile
or other electronic means with sending machine confirmation; (iii) ten (10)
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) four (4) days after deposit with a
commercial overnight courier, with written verification of receipt.

 

24.                               FURTHER ASSURANCE

 

24.1                           Each Party shall cooperate with the others
and execute and deliver to the others such other instruments and documents and
take such other actions as may be reasonably requested from time to time in
order to carry out, evidence and confirm their rights and the intended purpose
of this Agreement.

 

25.                               NO IMMUNITY

 

25.1                           To the extent that any of TCL or InFocus may
be entitled in any jurisdiction to claim for itself or any of its property or
assets immunity in respect of its obligations under this Agreement from service
of process, jurisdiction, suit, arbitration, judgment, execution, attachment
(whether before judgment, in aid of execution or otherwise) or legal process or
to the extent that in any jurisdiction there may be attributed to it or all or
any of its property or assets immunity of that kind (whether or not claimed)
each of TCL and InFocus irrevocably agrees not to claim and irrevocably waives
that immunity to the fullest extent permitted by the laws of that jurisdiction.

 

35

 

26.                               DISPUTE RESOLUTION

 

26.1                           Consultation

 

Any dispute or difference between the Parties
arising out of or in connection with this Agreement or as to rights or
obligations hereunder shall initially be referred to the CEO of InFocus and the
CEO of TCL for resolution to the satisfaction of the Parties, if possible.  The CEO of InFocus and the legal
representative of TCL may, if they so desire, consult outside experts for
assistance in arriving at a resolution. 
Such persons shall make a bona fide attempt to settle amicably through
friendly negotiation any such dispute or difference within thirty (30) Business
Days after its submission and, if unable to do so, the dispute or difference
may be referred by any of them to arbitration.

 

26.2                           Arbitration.

 

26.2.1                  Any dispute arising out of or in connection
with this Agreement, including any question regarding its existence, validity
or termination or as to rights or obligations of the Parties hereunder which is
not settled by friendly discussions pursuant to Article 26.1 shall be
referred to and finally resolved by arbitration in Singapore in accordance with
the Arbitration Rules of the Singapore International Arbitration Centre (the “SIAC
Rules”) for the time being in force which rules are deemed to be incorporated
by reference into this Article save and except for any modification made
hereunder or otherwise agreed by the Parties. 
The arbitral award shall be final and binding on the Parties.

 

26.2.2              The tribunal shall consist of three arbitrators.  TCL and InFocus shall each appoint one
arbitrator within thirty (30) days of the referral of the dispute to
arbitration.  The two arbitrators
appointed by TCL and InFocus shall appoint a third arbitrator.  If any Party fails to appoint its arbitrator
or such arbitrators are unable to agree upon the third arbitrator within sixty
(60) days of the referral of the dispute to arbitration, then the Party’s
arbitrator or the third arbitrator, as the case may be, shall be appointed by
the Chairman of the Singapore International Arbitration Centre.

 

26.2.3                  The English language shall be used in the
arbitral proceedings.  Unless otherwise
agreed by the Parties, all hearing materials, statements of claim or defense,
award and the reasons supporting it shall be written in English.

 

26.2.4                  To the extent this Article is deemed to
be a separate agreement independent from this Agreement, Article 27
concerning governing law and Article 23 concerning notices are
incorporated herein by reference.

 

36

 

26.3                           Operation of the Company.

 

Throughout the pendency of any dispute or difference
submitted to the legal representative of TCL and the CEO of InFocus for
resolution pursuant to Article 26.1 or to arbitration pursuant to Article 26.2,
the Company shall continue to conduct its Business activities in accordance
with the business plans of the Company then in effect, and the Parties shall
continue to perform their respective obligations under this Agreement except
and to the extent that the performance of those obligations are the subject of
the dispute or difference.

 

27.                               GOVERNING LAW

 

27.1                           The formation of this Agreement, its
validity, interpretation, execution and settlement of any disputes arising
hereunder shall be governed by, and construed in accordance with, the laws of
Hong Kong.

 

27.2                           Notwithstanding anything contained in Article 27.1
to the contrary, the licenses granted by InFocus under the InFocus Technology
License Agreement shall be governed by the laws of the State of New York,
United States of America.  The licenses
granted by TCL under the TCL Technology License Agreement shall be governed by
the laws of the PRC.

 

28.                               COUNTERPARTS

 

28.1                           This Agreement is executed in four (4)
original counterparts each of which shall have equal effect in law.

 

37

 

IN WITNESS WHEREOF, this Agreement has been entered into on the
day and year first above written.

 

 

	
   

  	
  TCL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TCL Optoelectronic Tech (Shenzhen) Co., Ltd.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

38

 

	
   

  	
  INFOCUS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Kyle Ranson

  
	
   

  	
  Title: CEO & President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INFOCUS CAYMAN

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Kyle Ranson

  
	
   

  	
  Title: CEO & President

  

 

39

 

SCHEDULE 1

 

List of Related Contracts

 

1.                                       InFocus Technology License Agreement between
InFocus and the Company

 

2.                                       TCL Technology License Agreement between TCL
and the Company

 

3.                                       Technology License Agreement between the
Company and the WOFE

 

4.                                       Leases between InFocus and the Company

 

5.                                       Leases between TCL and/or TCL Optoelectronic
and the WFOE

 

6.                                       Support Services Agreement between InFocus
and the Company

 

7.                                       Support Services Agreement between TCL and
the WFOE

 

8.                                       Norway Engineering Services Agreement between
the Company’s Norway Subsidiary and the Company

 

9.                                       U.S. Engineering Services Agreement between
the Company’s U.S. Subsidiary and the Company

 

10.                                 InFocus Engineering Services Agreement
between InFocus and the Company relating to the mutual provision of engineering
services for fees by engineering staff or for the use of R&D equipment
between InFocus and the Company

 

11.                                 TCL Engineering Services Agreement between
TCL and the Company relating to the mutual provision of engineering services
for fees by engineering staff or for the use of R&D equipment between TCL
and the Company

 

1

 

EXHIBIT
A

 

FORM OF DEED OF ADHERENCE

 

Reference is made to the [transfer document], dated
[•] between
[transferor] (the “Transferor”) and the undersigned, pursuant to which
the Transferor shall sell to the undersigned, and the undersigned shall
purchase from the Transferor, [number and type of shares] of [•], par value US$[•], for consideration equal to
[consideration].  It is a condition to
the completion of such sale and purchase that the undersigned become a party to
that certain Shareholders Agreement, dated December 14, 2004, by and among
the shareholders of South Mountain Technologies, Ltd., a Cayman Island company
(the “Shareholders Agreement”).

 

Accordingly, by execution of this Deed of Adherence,
the undersigned ratifies and shall become a party to the Shareholders
Agreement, and shall be fully bound by, and subject to, all of the covenants,
terms and conditions of the Shareholders Agreement applicable to or binding on
the Transferor (including without limitation Article 10 thereof) as though
it is an original party thereto and shall be deemed a Shareholder (as defined
in the Shareholders Agreement) for all purposes thereunder.  The undersigned authorizes this signature
page to be attached to and made part of the Shareholders Agreement.

 

This Deed of Adherence shall be governed by and
construed in accordance with the laws of Hong Kong.

 

The address of the undersigned for purposes of all
notices under the Shareholders Agreement is: [•]

 

 

	
   

  	
  [NAME OF NEW SHAREHOLDER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

2

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