Document:

Exhibit 10.1 to The Valspar Corporation Form 10-Q for period ended January 29, 2010

Exhibit 10.1

Execution Version

THREE-YEAR

CREDIT AGREEMENT

dated as of

June 30, 2009

among

THE VALSPAR CORPORATION,

The Borrowing Subsidiaries
Party Hereto,

The Lenders Party Hereto

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent and an Issuing Bank,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as an Issuing Bank,

BANK OF AMERICA, N.A.,

as Syndication Agent

	
  

 	
  

 	
  

 
	
 DEUTSCHE BANK AG NEW YORK BRANCH, and

 
	
 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

 
	
 as Documentation Agents

 
	
  

 
	
  

 	 
 	
  

 
	
  

 
	
 WACHOVIA CAPITAL MARKETS, LLC and BANC OF AMERICA SECURITIES LLC,

 
	
 as Joint Lead Arrangers and Joint Bookrunners

 

TABLE OF CONTENTS

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Page

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 ARTICLE I

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Definitions

 	
  

 
	
 SECTION
 1.01.

 	
 Defined
 Terms

 	
 2

 
	
 SECTION
 1.02.

 	
 Classification
 of Revolving Loans and Borrowings

 	
 18

 
	
 SECTION
 1.03.

 	
 Terms
 Generally; Construction.

 	
 18

 
	
 SECTION
 1.04.

 	
 Accounting
 Terms; GAAP

 	
 19

 
	
 SECTION
 1.05.

 	
 Exchange
 Rates.

 	
 19

 
	
 SECTION
 1.06.

 	
 Redenomination
 of Certain Designated Foreign Currencies.

 	
 19

 
	
  

 	
  

 	
  

 
	
  

 	
 ARTICLE II

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 The Credits

 	
  

 
	
 SECTION
 2.01.

 	
 Revolving
 Commitments.

 	
 20

 
	
 SECTION
 2.02.

 	
 Revolving
 Loans and Borrowings.

 	
 20

 
	
 SECTION
 2.03.

 	
 Requests for
 Borrowings

 	
 21

 
	
 SECTION
 2.04.

 	
 [Reserved].

 	
 22

 
	
 SECTION
 2.05.

 	
 Letters of
 Credit.

 	
 22

 
	
 SECTION
 2.06.

 	
 Funding of
 Borrowings.

 	
 26

 
	
 SECTION
 2.07.

 	
 Interest
 Elections.

 	
 26

 
	
 SECTION
 2.08.

 	
 Termination
 and Reduction of Revolving Commitments.

 	
 28

 
	
 SECTION
 2.09.

 	
 Repayment of
 Revolving Loans; Evidence of Debt.

 	
 28

 
	
 SECTION
 2.10.

 	
 Prepayment
 of Revolving Loans.

 	
 29

 
	
 SECTION
 2.11.

 	
 Fees.

 	
 29

 
	
 SECTION
 2.12.

 	
 Interest.

 	
 30

 
	
 SECTION 2.13.

 	
 Alternate
 Rate of Interest; Illegality.

 	
 31

 
	
 SECTION
 2.14.

 	
 Increased
 Costs.

 	
 32

 
	
 SECTION
 2.15.

 	
 Break
 Funding Payments

 	
 33

 
	
 SECTION
 2.16.

 	
 Taxes.

 	
 33

 
	
 SECTION
 2.17.

 	
 Payments
 Generally; Pro Rata Treatment; Sharing of Set-offs; Recovery of Payments;
 Apportionment of Payments.

 	
 34

 
	
 SECTION
 2.18.

 	
 Mitigation
 Obligations; Replacement of Lenders.

 	
 37

 
	
 SECTION
 2.19.

 	
 Borrowing
 Subsidiaries

 	
 38

 
	
 SECTION
 2.20.

 	
 Additional
 Reserve Costs.

 	
 38

 
	
 SECTION
 2.21.

 	
 Foreign
 Subsidiary Costs.

 	
 39

 
	
 SECTION
 2.22.

 	
 Defaulting
 Lenders, Downgraded Lenders

 	
 39

 
	
 SECTION
 2.23.

 	
 Increase in
 Revolving Commitments.

 	
 40

 
	
  

 	
  

 	
  

 
	
  

 	
 ARTICLE III

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Representations and Warranties

 	
  

 
	
 SECTION
 3.01.

 	
 Corporate
 Existence and Power

 	
 41

 
	
 SECTION
 3.02.

 	
 Corporate
 and Governmental Authorization; No Contravention

 	
 41

 
	
 SECTION
 3.03.

 	
 Binding
 Effect

 	
 42

 
	
 SECTION
 3.04.

 	
 Financial
 Information.

 	
 42

 
	
 SECTION
 3.05.

 	
 No
 Litigation

 	
 42

 
	
 SECTION
 3.06.

 	
 Compliance
 with ERISA.

 	
 42

 
	
 SECTION
 3.07.

 	
 Compliance
 with Laws; Payment of Taxes

 	
 42

 
	
 SECTION
 3.08.

 	
 Subsidiaries

 	
 43

 

i

	
  

 	
  

 	
  

 
	
 SECTION
 3.09.

 	
 Investment
 Company Act

 	
 43

 
	
 SECTION
 3.10.

 	
 [Reserved]

 	
 43

 
	
 SECTION
 3.11.

 	
 Ownership of
 Property; Liens

 	
 43

 
	
 SECTION
 3.12.

 	
 No Default

 	
 43

 
	
 SECTION
 3.13.

 	
 Full
 Disclosure

 	
 43

 
	
 SECTION
 3.14.

 	
 Environmental
 Matters.

 	
 43

 
	
 SECTION
 3.15.

 	
 Equity
 Interests

 	
 44

 
	
 SECTION
 3.16.

 	
 Margin Stock

 	
 44

 
	
 SECTION
 3.17.

 	
 Insolvency

 	
 44

 
	
  

 	
  

 	
  

 
	
  

 	
 ARTICLE IV

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Conditions

 	
  

 
	
 SECTION
 4.01.

 	
 Effective
 Date

 	
 44

 
	
 SECTION
 4.02.

 	
 Each Credit
 Event

 	
 46

 
	
 SECTION
 4.03.

 	
 Initial
 Borrowing by each Borrowing Subsidiary

 	
 46

 
	
  

 	
  

 	
  

 
	
  

 	
 ARTICLE V

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Covenants

 	
  

 
	
 SECTION
 5.01.

 	
 Information

 	
 47

 
	
 SECTION
 5.02.

 	
 Inspection
 of Property, Books and Records

 	
 48

 
	
 SECTION
 5.03.

 	
 Ratio of
 Consolidated Debt to Consolidated EBITDA

 	
 48

 
	
 SECTION
 5.04.

 	
 Interest
 Coverage Ratio

 	
 48

 
	
 SECTION
 5.05.

 	
 Restricted
 Payments

 	
 49

 
	
 SECTION
 5.06.

 	
 Loans or Advances

 	
 49

 
	
 SECTION
 5.07.

 	
 Acquisitions

 	
 49

 
	
 SECTION
 5.08.

 	
 Negative
 Pledge

 	
 49

 
	
 SECTION
 5.09.

 	
 Maintenance
 of Existence

 	
 50

 
	
 SECTION
 5.10.

 	
 Dissolution

 	
 50

 
	
 SECTION
 5.11.

 	
 Consolidations,
 Mergers and Sales of Assets

 	
 50

 
	
 SECTION
 5.12.

 	
 Use of
 Proceeds

 	
 50

 
	
 SECTION 5.13.

 	
 Compliance
 with Laws; Payment of Taxes.

 	
 50

 
	
 SECTION
 5.14.

 	
 Insurance

 	
 51

 
	
 SECTION
 5.15.

 	
 Change in
 Fiscal Year

 	
 51

 
	
 SECTION
 5.16.

 	
 Maintenance
 of Property

 	
 51

 
	
 SECTION
 5.17.

 	
 Environmental
 Notices

 	
 51

 
	
 SECTION
 5.18.

 	
 Environmental
 Matters

 	
 51

 
	
 SECTION
 5.19.

 	
 [Reserved]

 	
 51

 
	
 SECTION
 5.20.

 	
 Transactions
 with Affiliates

 	
 51

 
	
 SECTION
 5.21.

 	
 Limitation
 on Subsidiary Debt

 	
 52

 
	
 SECTION
 5.22.

 	
 Subsidiary
 Guarantors.

 	
 52

 
	
  

 	
  

 	
  

 
	
  

 	
 ARTICLE VI

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Events of Default

 	
  

 
	
 SECTION
 6.01.

 	
 Events of
 Default

 	
 52

 
	
 SECTION
 6.02.

 	
 Notice of
 Default

 	
 54

 
	
  

 	
  

 	
  

 
	
  

 	
 ARTICLE VII

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 The Administrative Agent

 	
  

 
	
 SECTION
 7.01.

 	
 Appointment
 and Authority

 	
 55

 
	
 SECTION
 7.02.

 	
 Rights as a
 Lender

 	
 55

 
	
 SECTION
 7.03.

 	
 Exculpatory
 Provisions

 	
 55

 

ii

	
  

 	
  

 	
  

 
	
 SECTION
 7.04.

 	
 Reliance by
 Administrative Agent

 	
 56

 
	
 SECTION
 7.05.

 	
 Delegation
 of Duties

 	
 56

 
	
 SECTION
 7.06.

 	
 Resignation
 of Administrative Agent

 	
 56

 
	
 SECTION
 7.07.

 	
 Non-Reliance
 on Administrative Agent and Other Lenders

 	
 57

 
	
 SECTION
 7.08.

 	
 No Other
 Duties, Etc

 	
 57

 
	
 SECTION
 7.09.

 	
 Guaranty
 Matters.

 	
 57

 
	
 SECTION
 7.10.

 	
 Issuing Bank

 	
 58

 
	
  

 	
  

 	
  

 
	
  

 	
 ARTICLE VIII

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Guarantee

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 ARTICLE IX

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Miscellaneous

 	
  

 
	
 SECTION
 9.01.

 	
 Notices.

 	
 59

 
	
 SECTION
 9.02.

 	
 Waivers;
 Amendments.

 	
 60

 
	
 SECTION
 9.03.

 	
 Expenses;
 Indemnity; Damage Waiver.

 	
 61

 
	
 SECTION
 9.04.

 	
 Successors
 and Assigns.

 	
 62

 
	
 SECTION
 9.05.

 	
 Survival

 	
 65

 
	
 SECTION
 9.06.

 	
 Counterparts;
 Integration; Effectiveness

 	
 65

 
	
 SECTION
 9.07.

 	
 Severability

 	
 65

 
	
 SECTION
 9.08.

 	
 Right of
 Setoff

 	
 65

 
	
 SECTION
 9.09.

 	
 Governing
 Law; Jurisdiction; Consent to Service of Process.

 	
 66

 
	
 SECTION
 9.10.

 	
 WAIVER OF
 JURY TRIAL

 	
 66

 
	
 SECTION
 9.11.

 	
 Construction

 	
 66

 
	
 SECTION
 9.12.

 	
 Confidentiality

 	
 67

 
	
 SECTION
 9.13.

 	
 Conversion
 of Currencies.

 	
 67

 
	
 SECTION
 9.14.

 	
 Interest
 Rate Limitation

 	
 68

 
	
 SECTION
 9.15.

 	
 Release of
 Subsidiary Guarantors

 	
 68

 
	
 SECTION
 9.16.

 	
 USA Patriot
 Act

 	
 68

 
	
 SECTION
 9.17.

 	
 No Fiduciary
 Relationship

 	
 68

 

iii

	
  

 	
  

 
	
 SCHEDULES:

 	
  

 
	
  

 	
  

 
	
 Schedule
 1.01

 	
 — Domestic
 Material Subsidiaries

 
	
 Schedule
 2.01

 	
 — Revolving
 Commitments

 
	
 Schedule
 2.05

 	
 — Existing
 Letters of Credit

 
	
 Schedule
 3.08

 	
 —
 Subsidiaries

 
	
 Schedule
 3.14

 	
 —
 Environmental Matters

 
	
  

 	
  

 
	
 EXHIBITS:

 	
  

 
	
  

 	
  

 
	
 Exhibit A-1

 	
 — Form of
 Borrowing Subsidiary Agreement

 
	
 Exhibit A-2

 	
 — Form of
 Borrowing Subsidiary Termination

 
	
 Exhibit B

 	
 — Form of
 Assignment and Assumption

 
	
 Exhibit C

 	
 — Form of
 Opinion of Lindquist & Vennum, PLLP

 
	
 Exhibit D

 	
 — Mandatory
 Costs Rate

 
	
 Exhibit E

 	
 — Form of
 Compliance Certificate

 
	
 Exhibit F

 	
 — Form of
 Guarantee Agreement

 
	
 Exhibit G

 	
 — Form of
 Indemnity, Subrogation and Contribution Agreement

 

i

          THREE-YEAR CREDIT AGREEMENT dated as of
June 30, 2009, among THE VALSPAR
CORPORATION, a Delaware corporation; the BORROWING SUBSIDIARIES from time to time party hereto; the LENDERS from time to time party hereto; WELLS FARGO BANK, NATIONAL ASSOCIATION, as
Administrative Agent and an Issuing Bank; WACHOVIA
BANK, NATIONAL ASSOCIATION, as an Issuing Bank; and BANK OF AMERICA, N.A., as Syndication
Agent.

          The
Company has requested the Lenders to extend Revolving Commitments under which
the Borrowers may obtain revolving loans and have letters of credit issued in
an aggregate principal amount at any time outstanding not greater than
US$465,000,000 or the equivalent thereof in certain other currencies, as such
amount may be increased or decreased pursuant to the terms hereof. The proceeds
of the Borrowings hereunder will be used to refinance existing Debt of the
Company and the Subsidiaries and to pay related fees and expenses, as well as
for working capital and general corporate purposes, including the financing of
future acquisitions.

          The
Lenders are willing to establish the credit facilities referred to in the
preceding paragraph upon the terms and subject to the conditions set forth
herein. Accordingly, the parties hereto agree as follows:

ARTICLE I

Definitions

          SECTION
1.01. Defined
Terms. As used in this Agreement, the following terms have the meanings
specified below:

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

          “Acquisition”
means any transaction pursuant to which the Company or any of the Subsidiaries
directly or indirectly, in its own name or by or through a nominee or an agent
(a) acquires equity Securities (or warrants, options or other rights to
acquire such Securities) of any Person other than the Company or a Person which
is, prior to such acquisition, a Subsidiary of the Company, pursuant to a
solicitation of tenders therefor, or in one or more negotiated block, market or
other transactions not involving a tender offer, or a combination of any of the
foregoing, or (b) makes any Person a Subsidiary of the Company, or causes
any Person other than a Subsidiary to be merged into the Company or any of its
Subsidiaries, in any case pursuant to a merger, purchase of assets or any
reorganization providing for the delivery or issuance to the holders of such
Person’s then outstanding Securities, in exchange for such Securities, of cash
or Securities of the Company or any of its Subsidiaries, or a combination
thereof, or (c) purchases all or substantially all of the business or
assets of any Person or line of business or business unit (or substantially all
of the assets comprising a line of business or business unit) of any Person.

          “Additional
Commitment” has the meaning assigned to such term in Section 2.23(c).

          “Additional
Lender” has the meaning assigned to such term in Section 2.23(a).

          “Adjusted
LIBO Rate” means, with respect to any Eurocurrency Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate; provided that, with respect
to any Eurocurrency Borrowing denominated in a Designated Foreign Currency for
any

Interest
Period, Adjusted LIBO Rate means an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1%) equal to the LIBO Rate for such Interest
Period.

          “Administrative
Agent” means Wells Fargo, in its capacity as administrative agent for the
Lenders hereunder appointed under Section 7.1, and its successors and permitted
assigns in such capacity. 

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

          “Affiliate”
of any Person means (i) any other Person which directly, or indirectly
through one or more intermediaries, controls such Person, (ii) any other Person
which directly, or indirectly through one or more intermediaries, is controlled
by or is under common control with such Person, or (iii) any other Person
of which such Person owns, directly or indirectly, 20% or more of the common
stock or equivalent Equity Interests. As used herein, the term “control” means
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

          “Agreement
Currency” has the meaning assigned to such term in Section 9.13(b).

          “Alternate
Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for
an Interest Period of one month plus 1.5%. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the
Adjusted LIBO Rate shall be effective from and including the effective date of
such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted
LIBO Rate, respectively.

          “Applicable
Creditor” has the meaning assigned to such term in Section 9.13(b).

          “Applicable
Percentage” means at any time, with respect to any Lender, the percentage
of the total Revolving Commitments represented by such Lender’s Revolving
Commitment at such time, or if the Revolving Commitments have terminated or
expired, the percentage of the total Credit Exposures represented by such
Lender’s Credit Exposures at such time; provided that if at the time of
determination there are no Credit Exposures, the “Applicable Percentage” shall
be the percentage of the total Revolving Commitments most recently in effect
represented by such Lender’s Revolving Commitment most recently in effect.

          “Applicable
Rate” means, for any day, with respect to any Revolving Loan, or with
respect to the facility fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption “Eurocurrency
Spread”, “ABR Spread” or “Facility Fee Rate”, as the case may be, based upon
the ratings by Moody’s and S&P, respectively, applicable on such date to
the Index Debt (or, if the Company does not have Index Debt, then based upon
the Company’s corporate credit ratings by Moody’s and S&P):

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Index Debt
 Ratings:

 	
  

 	
 Eurocurrency

 Spread

 	
  

 	
 ABR

 Spread

 	
  

 	
 Facility

 Fee Rate

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Category 1

 	
  

 	
 2.25%

 	
  

 	
 1.25%

 	
  

 	
 .25%

 
	
 A-/A3 or higher

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Category 2

 	
  

 	
 2.375%

 	
  

 	
 1.375%

 	
  

 	
 .375%

 
	
 BBB+/Baa1

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 

3

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Index Debt
 Ratings:

 	
  

 	
 Eurocurrency

 Spread

 	
  

 	
 ABR

 Spread

 	
  

 	
 Facility

 Fee Rate

 
	
 Category 3

 	
  

 	
 2.50%

 	
  

 	
 1.50%

 	
  

 	
 .50%

 
	
 BBB/Baa2

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Category 4

 	
  

 	
 2.875%

 	
  

 	
 1.875%

 	
  

 	
 .625%

 
	
 BBB-/Baa3

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Category 5

 	
  

 	
 3.25%

 	
  

 	
 2.25%

 	
  

 	
 .75%

 
	
 lower than
 BBB-/Baa3

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 

          For
purposes of the foregoing, (i) if either Moody’s or S&P shall not have in
effect a rating for the Index Debt or a corporate credit rating for the Company
(other than by reason of the circumstances referred to in the third sentence of
this paragraph), then such rating agency shall be deemed to have established a
rating in Category 5; (ii) if the ratings established or deemed to have been
established by Moody’s and S&P for the Index Debt or the Company’s
corporate credit ratings shall fall within different Categories, the Applicable
Rate shall be based on the higher of the two ratings unless (A) the ratings are
not in two adjacent Categories, in which case the Applicable Rate shall be
determined by reference to the Category one level above the Category
corresponding to the lower of the two ratings, or (B) one of the ratings is in
Category 5, in which case the Applicable Rate shall be determined by reference
to Category 5; and (iii) if the ratings established or deemed to have been
established by Moody’s and S&P for the Index Debt or the Company’s
corporate credit ratings shall be changed (other than as a result of a change
in the rating system of Moody’s or S&P), such change shall be effective as
of the date on which it is first announced by the applicable rating agency.
Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change. If the rating system of Moody’s or
S&P shall change, or if either such rating agency shall cease to be in the
business of rating corporate debt obligations, the Borrower and the Lenders
shall negotiate in good faith to amend this definition to reflect such changed
rating system or the unavailability of ratings from such rating agency and,
pending the effectiveness of any such amendment, the Applicable Rate shall be
determined using the rating of such rating agency most recently in effect prior
to such change or cessation.

          “Arrangers”
means Wachovia Capital Markets, LLC and Banc of America Securities LLC and
their respective successors.

          “Assignment
and Assumption” means an assignment and assumption entered into by a Lender
and an assignee (with the consent of any party whose consent is required by
Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit B or any other form approved by the Administrative Agent and
reasonably acceptable to the Company.

          “Availability
Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the
Revolving Commitments.

          “Bankruptcy
Event” means the occurrence of an Event of Default pursuant to Section
6.01(g) or Section 6.01(h).

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

          “Borrower”
means the Company or any Borrowing Subsidiary.

4

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

          “Borrowing
Minimum” means (a) in the case of a Borrowing denominated in US Dollars,
US$5,000,000 and (b) in the case of a Borrowing denominated in any Designated
Foreign Currency, 5,000,000 units of such currency.

          “Borrowing
Multiple” means (a) in the case of a Borrowing denominated in US Dollars,
US$1,000,000 and (b) in the case of a Borrowing denominated in any Designated
Foreign Currency, 1,000,000 units of such currency.

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

          “Borrowing
Subsidiary” means, at any time, each of the Subsidiaries that (a) is named
on the signature pages to this Agreement or (b) has been designated as a
Borrowing Subsidiary by the Company pursuant to Section 2.19, other than
any such Subsidiary that has ceased to be a Borrowing Subsidiary as provided in
Section 2.19.

          “Borrowing
Subsidiary Agreement” means a Borrowing Subsidiary Agreement substantially
in the form of Exhibit A-1.

          “Borrowing
Subsidiary Termination” means a Borrowing Subsidiary Termination
substantially in the form of Exhibit A-2.

          “Business
Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in San Francisco, California or New York City are authorized
or required by law to remain closed; provided, that (a) when used in
connection with a Eurocurrency Loan, the term “Business Day” shall also
exclude any day on which banks are not open for dealings in deposits in the
applicable currency in the London interbank market and (b) when used in
connection with a Revolving Loan denominated in Euro, the term “Business Day”
shall also exclude any day on which the TARGET payment system is not open for
the settlement of payments in Euro.

          “Calculation
Date” means each of the following: (a) each date of a Borrowing denominated
in a Designated Foreign Currency, (b) each date of a continuation of a
Revolving Loan denominated in a Designated Foreign Currency pursuant to Section
2.07, (c) the last Business Day of each calendar month and (d) each other date
selected by the Administrative Agent.

          “Capital
Stock” means any capital stock of the Company or any Consolidated
Subsidiary (to the extent issued to a Person other than the Company), whether
common or preferred.

          “Cash
Collateral Account” has the meaning assigned to such term in
Section 2.05(j).

          “CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. §§ 9601 et seq. and its implementing regulations and
amendments.

          “CERCLIS”
means the Comprehensive Environmental Response, Compensation and Liability
Information System established pursuant to CERCLA.

5

          “Change
in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or,
for purposes of Section 2.14(b), by any lending office of such Lender or
by such Lender’s or such Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.

          “Code”
means the Internal Revenue Code of 1986, as amended, or any successor Federal
tax code. Any reference to any provision of the Code shall also be deemed to be
a reference to any successor provision or provisions thereof.

          “Company”
means The Valspar Corporation, a Delaware corporation.

          “Consolidated
Debt” means at any date the Debt of the Company and its Consolidated
Subsidiaries (including any Securitization Debt), determined on a consolidated
basis as of such date. 

          
“Consolidated EBITDA” for any period means the sum of (a) Consolidated
Net Income for such period, plus (b) to the extent deducted in determining
Consolidated Net Income and without duplication, the sum of (i) Consolidated
Interest Expense for such period, (ii) taxes on income of the Company and its
Consolidated Subsidiaries for such period, (iii) the sum of all depreciation
expenses of the Company and its Consolidated Subsidiaries for such period, (iv)
amortization expenses of the Company and its Consolidated Subsidiaries for such
period, (v) depletion expenses of the Company and its Consolidated Subsidiaries
for such period, and (vi) extraordinary, unusual or non-recurring non-cash
losses, including goodwill impairment or amortization expense and non-cash
losses from the sale, exchange, transfer or other disposition of property of
the Company or its Consolidated Subsidiaries and the related tax effects in
accordance with GAAP for such period minus (c) to the extent included in
determining such Consolidated Net Income, the sum of, on a consolidated basis
and without duplication, (i) the income of any Person (other than a wholly
owned Subsidiary of the Company) in which any Person other than the Company or
any of its Consolidated Subsidiaries has a joint interest or a partnership
interest or other ownership interest, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any of its
Consolidated Subsidiaries by such Person during such period, (ii) gains from
the sale, exchange, transfer or other disposition of property or assets of the
Company and its Consolidated Subsidiaries (other than inventory sold in the
ordinary course of business) during such period, and related tax effects in
accordance with GAAP, (iii) any other extraordinary, unusual or non-recurring
gains or other income not from the continuing operations of the Company and its
Consolidated Subsidiaries during such period, and related tax effects in
accordance with GAAP and (iv) the income of any Subsidiary of the Company to
the extent that the declaration or payment of dividends or similar
distributions by that subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
subsidiary. For the purpose of calculating Consolidated EBITDA for any period,
if during such period the Company or any Subsidiary shall have made an
Acquisition, Consolidated EBITDA for such period shall be calculated after
giving pro forma effect thereto as if such acquisition occurred on the first
day of such period.

          “Consolidated
Interest Expense” means, for any period, all interest, premium payments,
debt discount, fees, charges and related expenses, whether expensed or
capitalized, in respect of Debt of the Company or any of its Consolidated
Subsidiaries outstanding during such period, plus the discount or yield in
respect of Securitization Debt. 

6

          “Consolidated
Net Income” means, for any period, the Net Income of the Company and its
Consolidated Subsidiaries determined on a consolidated basis, excluding (i)
extraordinary items and (ii) any equity interests of the Company or any
Subsidiary in the unremitted earnings of any Person that is not a Subsidiary.

          “Consolidated
Operating Profits” means, for any period, the Operating Profits of the
Company and its Consolidated Subsidiaries, determined on a consolidated basis
in accordance with GAAP.

          “Consolidated
Subsidiary” means at any date any Subsidiary or other entity the accounts
of which, in accordance with GAAP, would be consolidated with those of the
Company in its consolidated financial statements as of such date.

          “Consolidated
Total Assets” means, at any time, the Total Assets of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis in accordance
with GAAP.

          “Controlled
Group” means all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which,
together with the Company, are treated as a single employer under Section 414
of the Code.

          “Credit
Exposure” means, with respect to any Lender at any time, the sum of (i) the
US Dollar Equivalent of the principal amounts of such Lender’s Revolving Loans
and (ii) the LC Exposure of such Lender at such time.

          “Debt”
of any Person means at any date, without duplication, (i) all obligations of
such Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business, but
only if such obligations are, in accordance with GAAP, recorded on such
Person’s financial books as long-term debt, (iv) all obligations of such Person
as lessee under capital leases, (v) all obligations of such Person to reimburse
any bank or other Person in respect of amounts payable under a banker’s
acceptance, (vi) all Redeemable Preferred Stock of such Person, (vii) all
obligations (absolute or contingent) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit or similar
instrument, (viii) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, (ix) all Debt of
others Guaranteed by such Person, (x) the net obligation of such Person with
respect to Hedge Agreements (and for purposes of this Agreement, the net amount
which such Person is obligated to pay under any such agreement upon termination
of such agreement shall be deemed to constitute the principal amount of such
net obligation) and (xi) all Securitization Debt and the gross proceeds from
any similar transaction, regardless of whether such transaction is effected
without recourse to such Person or in a manner that would not otherwise be reflected
as a liability on a balance sheet of such Person in accordance with GAAP.

          “Default”
means any condition or event which constitutes an Event of Default or which
with the giving of notice or lapse of time or both would, unless cured or
waived in writing, become an Event of Default.

          “Defaulting Lender”
means any Lender, as reasonably determined by the Administrative Agent, that
(i) has failed (which failure has not been cured) to fund any Revolving Loan or
any participation interest in Letters of Credit required to be made hereunder
in accordance with the terms hereof, (ii) has notified the Company, the
Administrative Agent or the Issuing Banks in writing that it does not intend to
comply or is unable to comply with any of its funding obligations under this
Agreement or
has made a public statement that it does not intend or is unable to comply with
its funding obligations under this

7

Agreement or generally under other
agreements in which it commits to extend credit, (iii) has failed, within three
Business Days after receipt of a written request from the Administrative Agent
to confirm that it will comply with the terms of this Agreement relating to its
obligation to fund prospective Revolving Loans or participations in Letters of
Credit, (iv) has failed to pay to the Administrative Agent, any Issuing Bank or
any other Lender when due an amount owed by such Lender to the Administrative
Agent, any Issuing Bank or any other Lender pursuant to the terms of this
Agreement, unless such amount is subject to a good faith dispute or such
failure has been cured, or (v) (a) has been or is the Subsidiary of a Person
that has been adjudicated as, or determined by any Governmental Authority
having regulatory authority over such Person or its assets to be, insolvent or
(b) has become the subject of a proceeding under any other bankruptcy,
insolvency or similar law now or hereafter in effect, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment or is a Subsidiary of a Person that has
become subject of a proceeding under any bankruptcy, insolvency or similar law
now or hereafter in effect, or has had a receiver, conservator, trustee or
custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding
or appointment; provided that a Lender shall not be a Defaulting Lender
solely by virtue of the ownership or acquisition of any equity interest in such
Lender or a parent company thereof by a governmental authority or an
instrumentality thereof..

          “Designated
Foreign Currency” means Sterling, Yen, Euro and Swiss Francs.

          “Domestic
Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York City or San Francisco, California are authorized
or required by law to close.

          “Domestic
Material Subsidiary” means any Material Subsidiary that is a Domestic
Subsidiary.

          “Domestic
Subsidiary” means a Subsidiary incorporated or organized under the laws of
the United States of America, any State or territory thereof or the District of
Columbia.

          “Downgraded
Lender” means any Lender that has a non-credit enhanced senior unsecured
debt rating below investment grade from either Moody’s, S&P or any other
nationally recognized statistical rating organization recognized as such by the
Securities and Exchange Commission.

          “Effective
Date” means the date on which the conditions specified in Section 4.01
are satisfied (or waived in accordance with Section 9.02).

          “EMU
Legislation” means the legislative measures of the European Union for the
introduction of, changeover to or operation of the Euro that apply generally in
the European Union.

          “Environmental
Authority” means any Governmental Authority that exercises any form of
jurisdiction or authority under any Environmental Requirement.

          “Environmental
Authorizations” means all licenses, permits, orders, approvals, notices,
registrations or other legal prerequisites for conducting the business of the
Company or any Subsidiary required by any Environmental Requirement.

          “Environmental
Judgments and Orders” means all judgments, decrees or orders arising from
or in any way associated with any Environmental Requirement, whether or not
entered upon consent or written agreements with an Environmental Authority or
other entity arising from or in any way associated with any Environmental
Requirement, whether or not incorporated in a judgment, decree or order.

8

          “Environmental
Liabilities” means any liabilities, whether accrued, contingent or
otherwise, arising from or in any way associated with any Environmental
Requirement, Environmental Judgments and Orders, Environmental Notices,
Environmental Proceedings, or Environmental Releases.

          “Environmental
Notices” means notice from any Environmental Authority or by any other
Person, of alleged material noncompliance with or material liability under any
Environmental Requirement, including without limitation any complaints,
citations, demands or requests from any Environmental Authority or from any
other person or entity for correction of any violation of any Environmental
Requirement or any investigations concerning any violation of any Environmental
Requirement.

          “Environmental
Proceedings” means any judicial or administrative proceedings to which the
Company or any Subsidiary is a party or to which their respective Properties
are subject, arising from or in any way associated with any Environmental
Requirement.

          “Environmental
Releases” means releases as defined in CERCLA or under any Environmental
Requirement.

          “Environmental
Requirement” means any legal requirement relating to Hazardous Materials or
health, safety or the environment, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state
and local laws, ordinances, regulations, orders, writs, decrees, judgments,
injunctions and common law.

          “Equity
Interests” means shares of
Capital Stock, partnership interests, membership interests in a limited
liability company, beneficial interests in a trust or other equity ownership
interests in a person.

          “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, or any successor law. Any reference to any provision of ERISA shall
also be deemed to be a reference to any successor provision or provisions
thereof.

          “Euro”
or “€” means the single
currency of the European Union as constituted by the Treaty on European Union
and as referred to in the EMU Legislation.

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

          “Event
of Default” has the meaning assigned to such term in Section 6.01.

          “Excess
Margin Stock” means that portion, if any, of the Margin Stock owned by the
Company and the Subsidiaries that exceeds 25% of the aggregate value (as
determined in accordance with Regulation U) of all assets subject to any
limitation on sale, pledge, or any other restriction hereunder, including
Section 5.08 and Section 5.11.

          “Exchange
Rate” means on any day, with respect to any Designated Foreign Currency,
the rate at which such Designated Foreign Currency may be exchanged into US
Dollars, as set forth at approximately 11:00 a.m., London time, on such day on
Bloomberg “BFIX” for such Designated Foreign Currency. In the event that such
rate does not appear on Bloomberg “BFIX”, the Exchange Rate shall be determined
by reference to such other publicly available service for displaying exchange
rates as may be agreed upon by the Administrative Agent and the Company, or, in
the absence of such an agreement, such Exchange Rate shall instead be the
arithmetic average of the spot rates of exchange of the Administrative

9

Agent in the
market where its exchange operations in respect of such Designated Foreign
Currency are then being conducted, at or about 11:00 a.m., Local Time, on such
date for the purchase of US Dollars for delivery two Business Days later; provided
that if at the time of any such determination, for any reason, no such spot
rate is being quoted, the Administrative Agent may use any reasonable method it
deems appropriate to determine such rate, and such determination shall be
conclusive absent manifest error.

          “Excluded
Taxes” means, with respect to the Administrative Agent, any Issuing Bank,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of any Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under which such recipient is organized or in which its principal
office is located or in which its applicable lending office is located, (b) any
branch profit taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above, (c) in the
case of a Lender (other than a purchaser of a participation pursuant to Section
2.17(c) or an assignee pursuant to a request by the Company under Section
2.18(b)), any withholding tax imposed by the United States of America that is
in effect and would apply to amounts payable to such Lender by the Company or a
Borrower which is a Domestic Subsidiary from an office within such jurisdiction
at the time such Lender becomes a party to this Agreement (or designates a new
lending office), and (d) any withholding tax that is attributable to such
Lender’s failure to comply with Section 2.16(e), except, in the case of clause
(c) above, to the extent that (i) such Lender (or its assignor, if any) shall
have been entitled, at the time it became party to this Agreement or designated
such new lending office, to receive additional amounts with respect to any
withholding tax or (ii) such withholding tax shall have resulted from the
making of any payment to a location other than the office designated by the
Administrative Agent or such Lender for the receipt of payments of the
applicable type.

          “Existing
Credit Agreements” means (a) the Five-Year Credit Agreement dated as of
October 25, 2005 among the Company, the Borrowing Subsidiaries party thereto,
the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent,
J.P. Morgan Europe Limited, as London Agent, J.P. Morgan Australia Limited, as
Australian Agent, and Barclays Bank PLC as Syndication Agent and (b) the
364-Day Credit Agreement dated as of November 27, 2007 among the Company, the
Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent,
Barclays Bank PLC as Syndication Agent and Bank of America, N.A., Wachovia
Bank, N.A. and Wells Fargo Bank National Association as Co-Documentation
Agents.

          “Existing
LC Reimbursement Agreements” means (a) the Reimbursement and Security
Agreement, dated as of June 1, 1995 between the Company and Wachovia Bank,
National Association in respect of the direct-pay letter of credit issued to
secure payment of the Tax-Exempt Adjustable Mode Industrial Development Revenue
Bonds (The Valspar Corporation Project) Series 1995 in the aggregate principal
amount of $4,500,000 and (b) the Reimbursement and Security Agreement, dated as
of August 1, 1995 between the Company and Wachovia Bank, National Association
in respect of the direct-pay letter of credit issued to secure payment of the
Tax-Exempt Adjustable Mode Industrial Development Revenue Bonds (The Valspar
Corporation Project) Series 1995 in the aggregate principal amount of
$8,000,000, as each such agreement has been amended and restated as of the date
hereof and may be further amended, modified, supplemented, or restated from
time to time.

          “Existing
Letters of Credit” means those letters of credit set forth on Schedule 2.05
and continued under this Agreement as Letters of Credit issued pursuant to
Section 2.05.

          “Federal
Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day

10

that is a
Business Day, the average (rounded upwards, if necessary, to the next 1/100 of
1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

          “Fee
Letter” means (i) the letter agreement from Wells Fargo and Wachovia
Capital Markets, LLC to the Company and (ii) the letter agreement from Bank of
America, N.A. and Banc of America Securities LLC to the Company, each dated
June 5, 2009, relating to certain fees payable by the Company in respect of the
transactions contemplated by this Agreement, as amended, modified, restated or
supplemented from time to time.

          “Fiscal
Quarter” means any fiscal quarter of the Company.

          “Fiscal
Year” means any fiscal year of the Company.

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

          “Foreign
Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

          “GAAP”
means generally accepted accounting principles in the United States of America.

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

          “Granting
Lender” shall have the meaning assigned to such term in Section 9.04(h).

          “Guarantee”
by any Person means any obligation, contingent or otherwise, of such Person
directly or indirectly guaranteeing any Debt or other obligation of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to secure,
purchase or pay (or advance or supply funds for the purchase or payment of)
such Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services,
to provide collateral security, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business. The term “Guarantee” used as a verb has a corresponding meaning.

          “Guarantee
Agreement” means the Guarantee Agreement, substantially in the form of
Exhibit F, between the Subsidiary Guarantors and the Administrative Agent for
the benefit of the Lenders.

          “Hazardous
Materials” includes, without limitation, (a) solid or hazardous waste, as
defined in the Resource Conservation and Recovery Act of 1980, 42 U.S.C.
ss. 6901 et seq. and its implementing regulations and amendments, or in
any applicable state or local law or regulation, (b) any “hazardous substance”,
“pollutant” or “contaminant”, as defined in CERCLA, or in any applicable state
or local law or regulation, (c) gasoline, or any other petroleum product or
by-product, including crude oil or any fraction thereof, (d) toxic substances,
as defined in the Toxic Substances Control Act of 1976, or in any

11

applicable
state or local law or regulation and (e) insecticides, fungicides, or
rodenticides, as defined in the Federal Insecticide, Fungicide, and Rodenticide
Act of 1975, or in any applicable state or local law or regulation, as each
such Act, statute or regulation may be amended from time to time.

          “Hedge
Agreement” means any commodity price protection agreement (excluding any
agreement with a supplier, or affiliate of a supplier, of the items or
materials which are the subject of the agreement), interest or foreign currency
rate swap, cap, collar, option, hedge, forward rate or other similar agreement
or arrangement designed to protect against fluctuations in interest rates,
currency exchange rates or spot prices of commodities entered into in the
ordinary course of business and not for speculative purposes.

          “Hedge
Party” means any Lender or any Affiliate of any Lender in its capacity as a
counterparty to any Hedge Agreement with any Borrower or any Subsidiary, or any
former Lender or any Affiliate of any former Lender in its capacity as a
counterparty to any such Hedge Agreement entered into prior to the date such
Person or its Affiliate ceased to be a Lender.

          “Increasing
Lender” has the meaning assigned to such term in Section 2.23(a).

          “Indemnified
Taxes” means Taxes other than Excluded Taxes.

          “Indemnity,
Subrogation and Contribution Agreement” shall mean the Indemnity,
Subrogation and Contribution Agreement, substantially in the form of Exhibit G,
among the Company, the Subsidiary Guarantors and the Administrative Agent.

          “Index
Debt” means senior, unsecured, long-term indebtedness for borrowed money of
the Company that is not guaranteed by any other Person (other than a
Subsidiary) or subject to any other credit enhancement.

          “Information
Memorandum” means the Confidential Information Memorandum dated June 2009
distributed to the Lenders, together with the appendices thereto, as amended
through the date hereof.

          “Interest
Election Request” means a request by the relevant Borrower to convert or
continue a Borrowing in accordance with Section 2.07.

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

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

12

          “Issuing
Bank” means (i) Wells Fargo, in its capacity as the issuer of Letters of
Credit hereunder (other than Existing Letters of Credit), and its successors in
such capacity as provided in Section 2.05(i) and (ii) Wachovia Bank,
National Association, solely in respect of its issuance of the Existing Letters
of Credit. Each Issuing Bank may, in its discretion, arrange 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 Affiliates with respect to
Letters of Credit issued by such Affiliates.

          “Judgment
Currency” has the meaning assigned to such term in Section 9.13(b).

          “LC
Disbursement” means a payment made by any Issuing Bank in respect of a
Letter of Credit.

          “LC
Exposure” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by
or on behalf of the applicable Borrower at such time. The LC Exposure of any
Lender at any time shall be such Lender’s Percentage of the aggregate LC
Exposure at such time.

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

          “Letter
of Credit” means (i) any letter of credit issued pursuant to this Agreement
by Wells Fargo on behalf of Lenders holding Revolving Commitments and (ii) the
Existing Letters of Credit.

          “Letter
of Credit Documents” means, with respect to any Letter of Credit,
collectively, such Letter of Credit and any application therefor, the Existing
LC Reimbursement Agreements and any other agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for the rights and obligations of the
parties concerned or at risk with respect to such Letter of Credit.

          “LIBO
Rate” means, with respect to any Eurocurrency Borrowing for any Interest
Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m., London time, on the Quotation Day for such
Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in the currency of such Borrowing (as set forth
by any service (including Bloomberg, Reuters and Thomson Financial) selected by
Administrative Agent that has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates), for a period equal to such Interest Period; provided that,
to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the “LIBO Rate” shall be the average
(rounded upward, if necessary, to the next 1/100 of 1%) of the respective
interest rates per annum at which deposits in the currency of such Borrowing
are offered for such Interest Period to major banks in the London interbank
market by Wells Fargo at approximately 11:00 a.m., London time, on the
date two Business Days prior to the beginning of such Interest Period.

          “Lien”
means, with respect to any asset, any mortgage, deed to secure debt, deed of
trust, lien, pledge, charge, security interest, security title, preferential
arrangement which has the practical effect of constituting a security interest
or encumbrance, servitude or encumbrance of any kind in respect of such asset
to secure or assure payment of a Debt or a Guarantee, whether by consensual
agreement or by operation of statute or other law, or by any agreement,
contingent or otherwise, to provide any of the foregoing. For the purposes of
this Agreement, the Company or any Subsidiary shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease (but not
an operating lease) or other title retention agreement relating to such asset.

13

          “Loan
Documents” means this Agreement, each Borrowing Subsidiary Agreement, each
Borrowing Subsidiary Termination, the Guarantee Agreement, the Indemnity,
Subrogation and Contribution Agreement, the Fee Letter, each Letter of Credit
Document and each promissory note delivered pursuant to this Agreement, as such
documents may be amended, modified, supplemented, or restated from time to
time, but specifically excluding any Hedge Agreement to which any Borrower and
any Hedge Party are parties.

          “Local
Time” means (a) with respect to a Revolving Loan or Borrowing denominated
in US Dollars, San Francisco time, (b) with respect to a Revolving Loan or
Borrowing denominated in any Designated Foreign Currency, London time and (c)
with respect to an Existing Letter of Credit, Charlotte, North Carolina time.

          “Margin
Stock” means “margin stock” as defined in Regulation T, U or X of the
Board, as in effect from time to time, together with all official rulings and
interpretations issued thereunder.

          “Material
Adverse Effect” means any event, act, condition or occurrence that, alone
or in conjunction with one or more other events, acts, conditions or
occurrences, has resulted or is reasonably likely to result in a material
adverse effect on (a) the financial condition, operations, business or
properties of the Company and the Consolidated Subsidiaries, taken as a whole,
(b) the rights and remedies of the Administrative Agent and the Lenders
under the Loan Documents or the ability of the Company to perform its
obligations under the Loan Documents to which it is a party or (c) the
legality, validity or enforceability of any Loan Document.

          “Material
Subsidiary” means, on any date, any Subsidiary that either (a) had, at the
end of the most recently ended Fiscal Year, assets with a book value greater
than 10% of Consolidated Total Assets at the end of such Fiscal Year (or, with
respect to any Subsidiary that shall have been acquired by the Company since
the end of such Fiscal Year, that had, at the time of such acquisition, assets
with a book value greater than 10% of Consolidated Total Assets at the end of
such Fiscal Year), or (b) contributed more than 5% of Consolidated Operating
Profits for the most recently ended Fiscal Year (or, with respect to any
Subsidiary that shall have been acquired by the Company since the end of such
Fiscal Year, that would have contributed more than 5% of Consolidated Operating
Profits for the entire such Fiscal Year had it been a Subsidiary for the entire
such Fiscal Year, as determined on a pro forma basis in accordance with GAAP); provided,
that if at any time the aggregate Total Assets of all Domestic Subsidiaries
that are not Material Subsidiaries as of the end of the most recently ended
Fiscal Year exceeds 20% of Consolidated Total Assets as of the end of such
Fiscal Year, the Company (or, in the event the Company has failed to do so
within 30 days, the Administrative Agent) shall designate sufficient
Domestic Subsidiaries as “Material Subsidiaries” to eliminate such excess, and
such designated Subsidiaries shall for all purposes of this Agreement
constitute Material Subsidiaries.

          “Maturity
Date” means June 30, 2012.

          “Moody’s”
means Moody’s Investors Service, Inc.

          “Multiemployer
Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.

          “Net
Income” means, as applied to any Person for any period, the aggregate
amount of net income of such Person, for such period, as determined in
accordance with GAAP.

          “Obligations”
means the due and punctual payment of (a) the principal of and premium, if any,
and interest (including interest accruing during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding) on the

14

Revolving
Loans made to each Borrower, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (b) all
payments required to be made by any Borrower under this Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of LC Disbursements, interest thereon and obligations to provide
cash collateral, (c) all payment and other obligations owing or
payable at any time by the Borrower or any Subsidiary to any Hedge Party under
or in connection with any Hedge Agreement permitted by this Agreement, and (d)
all other monetary obligations, including fees, costs, expenses and
indemnities, whether primary, secondary, direct, contingent, fixed or otherwise
(including monetary obligations incurred during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), of the Company or any other Borrower
or Subsidiary Guarantor under this Agreement or any other Loan Document.

          “OFAC”
means the U.S. Department of the Treasury’s Office of Foreign Assets Control,
and any successor thereto.

          “Operating
Profits” means, as applied to any Person for any period, income from
operations of such Person for such period, as determined in accordance with
GAAP.

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

          “PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

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

          “Permitted
Acquisition” means any Acquisition (a) which is of a Person engaged in or
assets used in the same or similar line or lines of business as the Company or
any Consolidated Subsidiaries, and (b) if the aggregate consideration to be
paid by the Company or any Subsidiary in connection with such Acquisition
exceeds US$100,000,000, as to which the Company has delivered to the Lenders a
certificate of the chief financial officer, treasurer or chief accounting
officer of the Company certifying (and, in the case of Sections 5.03, 5.04,
5.08 and 5.11(d), including calculations evidencing) pro-forma compliance with
the terms of this Agreement after giving effect to such Acquisition.

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

          “Plan”
means at any time an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (i) maintained by a member of the Controlled Group for
employees of any member of the Controlled Group or (ii) maintained pursuant to
a collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which a member of the Controlled
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.

15

          “Prepaid
Rebates” means any payment made to or credit allowed to a customer or
prospective customer of the Company or any Subsidiary, or to any affiliate of
such customer or prospective customer, in each case in the ordinary course of
the Company’s or such Subsidiary’s business and pursuant to a written agreement
or purchase order, which represents the prepayment of a rebate, price discount
or price reduction on products sold or to be sold by the Company or such
Subsidiary to one or more customers or prospective customers.

          “Prime
Rate” means the rate of interest per annum publicly announced from time to
time by Wells Fargo as its prime rate in effect at its principal office in San
Francisco; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.

          “Properties”
means all real property owned, leased or otherwise used or occupied by the
Company or any Subsidiary, wherever located.

          “Quotation
Day” means, with respect to any Eurocurrency Borrowing and any Interest
Period, the day on which it is market practice in the relevant interbank market
for prime banks to give quotations for deposits in the currency of such
Borrowing for delivery on the first day of such Interest Period. If such
quotations would normally be given by prime banks on more than one day, the
Quotation Day will be the last of such days.

          “Redeemable
Preferred Stock” of any Person means any Equity Interest issued by such
Person which is at any time prior to the Maturity Date either
(i) mandatorily redeemable (by sinking fund or similar payments or
otherwise) or (ii) redeemable at the option of the holder thereof.

          “Register”
has the meaning set forth in Section 9.04(c).

          “Regulations
D, T, U and X” means Regulations D, T, U and X, respectively, of the Board,
and any successor regulations.

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

          “Required
Lenders” means, at any time, Lenders having Credit Exposures and unused
Revolving Commitments representing more than 50% of the sum of the total Credit
Exposures and unused Revolving Commitments at such time.

          “Reset
Date” has the meaning assigned to such term in Section 1.05.

          “Restricted
Payment” means (i) any dividend or other distribution on any Equity
Interest of the Company (except dividends payable solely in Equity Interests)
or (ii) any payment on account of the purchase, redemption, retirement or
acquisition of any Equity Interest of the Company (except Equity Interests
acquired upon the conversion thereof into other Equity Interests), whether now
or hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of any
Borrower or Subsidiary.

          “Revolving
Commitment” means, with respect to each Lender, the commitment of such
Lender set forth on Schedule 2.01 (or in the Assignment and Assumption pursuant
to which such Lender shall have assumed its Revolving Commitment) to make
Revolving Loans pursuant to Section 2.01(a), as such commitment may be
(a) reduced from time to time pursuant to Section 2.08, (b) increased
from time to time pursuant to Section 2.23 and (c) reduced or increased
from time to time pursuant to assignments by

16

or to such
Lender pursuant to Section 9.04. The aggregate amount of the Revolving
Commitments on the date hereof is US$465,000,000.

          “Revolving
Loan” means a loan made by a Lender pursuant to Section 2.01(a). Each
Revolving Loan shall be (i) if denominated in a Designated Foreign
Currency, a Eurocurrency Loan or (ii) if denominated in US Dollars, a
Eurocurrency Loan or an ABR Loan.

          “S&P”
means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

          “Securitization
Debt” means the aggregate net outstanding paid, directly or indirectly, by
any funding source to a Subsidiary in respect of accounts receivable or
interests therein sold, conveyed, contributed or transferred or pledged
pursuant to the relevant securitization documents (it being the intent of the
parties that the amount of Securitization Debt at any time approximate as
closely as possible the principal amount of Debt that would be outstanding
under the definitive securitization documents as if the same were structured as
a secured lending agreement rather than an agreement providing for the sale,
conveyance, contribution to capital, transfer or pledge of the receivables or
interests therein.)

          “Security”
has the meaning assigned to such term in Section 2(l) of the Securities Act of
1933, as amended.

          “SPC”
shall have the meaning assigned to such term in Section 9.04(h).

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

          “Sterling”
or “£”means the lawful money of the United Kingdom.

          “subsidiary”
means, with respect to any Person (the “parent”) at any date, any
corporation or other entity of which equity securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by the parent.

          “Subsidiary”
means any subsidiary of the Company.

          “Subsidiary
Guarantor” means (i) each Subsidiary listed on Schedule 1.01 and (ii) each
Subsidiary that becomes a guarantor pursuant to Section 5.22.

          “Swiss
Francs” means the lawful currency of Switzerland.

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

17

          “Third
Parties” means all lessees, sublessees, licensees and other users of the
Properties, excluding those users of the Properties in the ordinary course of
the Company’s or any Subsidiary’s business and on a temporary basis.

          “Total
Assets” of any Person means, at any time, the total assets of such Person,
as set forth or reflected or as should be set forth or reflected on the most
recent balance sheet of such Person, prepared in accordance with GAAP.

          “Transactions”
means the execution, delivery and performance by the Borrowers of the Loan
Documents, the borrowing of Revolving Loans, the use of the proceeds thereof
and the issuance of Letters of Credit hereunder.

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

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

          “US
Dollar Equivalent” means, on any date of determination, (a) with respect to
any amount in US Dollars, such amount, and (b) with respect to any amount in
any Designated Foreign Currency, the equivalent in US Dollars of such amount,
determined by the Administrative Agent pursuant to Section 1.05 using the
Exchange Rate with respect to such Designated Foreign Currency at the time in
effect under the provisions of such Section.

          “USA
Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

          “Wells
Fargo” means Wells Fargo Bank, National Association, and its successors and
assigns.

          “Wholly
Owned Subsidiary” means any Subsidiary all of the Equity Interests of which
(except directors’ qualifying shares) are at the time directly or indirectly
owned by the Company.

          “Withdrawal
Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

          “Yen”
or “¥”means the lawful money of Japan.

          SECTION
1.02. Classification
of Revolving Loans and Borrowings. For purposes of this Agreement,
Revolving Loans may be classified and referred to by Type (e.g., a
“Eurocurrency Loan”). Borrowings also may be classified and referred to by Type
(e.g., a “Eurocurrency Borrowing”).

          SECTION
1.03. Terms
Generally; Construction. 

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

18

agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns,
(c) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

          (b) All
references herein to the Lenders or any of them shall be deemed to include the
Issuing Banks unless specifically provided otherwise or unless the context
otherwise requires.

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

          SECTION
1.05. Exchange
Rates.

          (a) Not
later than 1:00 p.m., San Francisco time, on each Calculation Date, the
Administrative Agent shall (i) determine the Exchange Rate as of such
Calculation Date with respect to each Designated Foreign Currency and
(ii) give notice thereof to the Lenders and the Company. The Exchange
Rates so determined shall become effective on the first Business Day
immediately following the relevant Calculation Date (a “Reset Date”),
shall remain effective until the next succeeding Reset Date, and shall for all
purposes of this Agreement (other than Section 9.13 or any other provision
expressly requiring the use of a current Exchange Rate) be the Exchange Rates
employed in converting any amounts between US Dollars and Designated Foreign
Currencies.

          (b) Not
later than 5:00 p.m., San Francisco time, on each Reset Date and each date
on which Revolving Loans denominated in any Designated Foreign Currency are
made or are continued for a new Interest Period, the Administrative Agent shall
(i) determine the aggregate amount of the US Dollar Equivalent of the
principal amounts of the Revolving Loans denominated in Designated Foreign
Currencies then outstanding (after giving effect to any Revolving Loans
denominated in Designated Foreign Currencies made or repaid on such date) and
(ii) notify the Lenders and the Company of the results of such determination.

          SECTION
1.06. Redenomination
of Certain Designated Foreign Currencies.

          (a) Each
obligation of any party to this Agreement 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 Agreement in respect of that currency
shall be inconsistent with

19

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 Borrowing
in the currency of such member state is outstanding immediately prior to such
date, such replacement shall take effect, with respect to such Borrowing, at
the end of the then current Interest Period.

          (b) Without
prejudice and in addition to any method of conversion or rounding prescribed by
any EMU Legislation and (i) without limiting the liability of any Borrower
for any amount due under this Agreement and (ii) without increasing any
Revolving Commitment of any Lender, all references in this Agreement to minimum
amounts (or integral multiples thereof) 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, immediately upon such adoption, be
replaced by references to such minimum amounts (or integral multiples thereof)
as shall be specified herein with respect to Borrowings denominated in Euro.

          (c) Each
provision of this 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.

ARTICLE
II

The Credits

          SECTION
2.01. Revolving
Commitments. 

          (a) Subject
to the terms and conditions set forth herein, each Lender agrees to make
Revolving Loans to the Borrowers from time to time during the Availability
Period in US Dollars or one or more Designated Foreign Currencies in amounts
that will not result in (i) such Lender’s Credit Exposure exceeding its
Revolving Commitment and (ii) the sum of the aggregate Credit Exposures
exceeding the aggregate Revolving Commitments.

          (b) Within
the foregoing limits, and subject to the terms and conditions set forth herein,
any Borrower may borrow, prepay and reborrow Revolving Loans.

          SECTION
2.02. Revolving
Loans and Borrowings.

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

          (b) Subject
to Section 2.13, (i) each Borrowing denominated in a Designated
Foreign Currency shall be comprised entirely of Eurocurrency Loans and
(ii) each Borrowing denominated in US Dollars shall be comprised entirely
of ABR Loans or Eurocurrency Loans as the applicable Borrower may request in
accordance herewith. Each Lender at its option may make any Eurocurrency Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Eurocurrency Loan; provided that any exercise of such option shall
not affect the obligation of any Borrower to repay such Eurocurrency Loan in
accordance with the terms of this Agreement.

20

          (c)
At the commencement of each Interest Period for any Borrowing, such Borrowing
shall be in an aggregate amount that is at least equal to the Borrowing Minimum
and an integral multiple of the Borrowing Multiple; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the Revolving Commitments, or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.05(e).
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of ten Eurocurrency
Borrowings that are outstanding with different Interest Period termination
dates.

          (d)
Notwithstanding any other provision of this Agreement, no Borrower shall be
entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.

          SECTION
2.03. Requests for Borrowings. To request a Borrowing, the applicable
Borrower, or the Company on behalf of the applicable Borrower, shall notify the
Administrative Agent of such request by telephone (a) in the case of a
Eurocurrency Borrowing denominated in US Dollars, not later than
11:00 a.m., Local Time, three Business Days before the date of the
proposed Borrowing, (b) in the case of a Eurocurrency Borrowing
denominated in a Designated Foreign Currency, not later than 11:00 a.m.,
Local Time, four Business Days before the date of the proposed Borrowing, or (c) in
the case of an ABR Borrowing, not later than 10:00 a.m., San Francisco time,
the Business Day of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery
or telecopy to the Administrative Agent of a written Borrowing Request in a
form approved by the Administrative Agent and signed by the applicable
Borrower, or by the Company on behalf of the applicable Borrower. Each such
telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:

	
  

 	
  

 
	
  

 	
           (i)
 the Borrower requesting such Borrowing (or on whose behalf the Company is
 requesting such Borrowing);

 
	
  

 	
  

 
	
  

 	
           (ii)
 the currency and aggregate principal amount of the requested Borrowing;

 
	
  

 	
  

 
	
  

 	
           (iii)
 the date of the requested Borrowing, which shall be a Business Day;

 
	
  

 	
  

 
	
  

 	
           (iv)
 whether the requested Borrowing is to be an ABR Borrowing or a Eurocurrency
 Borrowing;

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

 	
           (vi)
 the location and number of the Borrower’s account to which funds are to be disbursed,
 which shall comply with the requirements of Section 2.06.

 

If no currency is specified with respect to any
requested Eurocurrency Borrowing, then the relevant Borrower shall be deemed to
have selected US Dollars. If no election as to the Type of Borrowing is
specified, then the requested Borrowing shall be (i) in the case of a
Borrowing denominated in US Dollars, an ABR Borrowing and (ii) in the case
of a Borrowing denominated in a Designated Foreign Currency, a Eurocurrency
Borrowing. If no Interest Period is specified with respect to any requested
Eurocurrency Borrowing, then the relevant Borrower shall be deemed to have
selected an Interest Period of one month’s duration. Promptly following receipt
of a Borrowing Request in accordance with this Section, the Administrative
Agent shall advise each Lender that will make a Revolving Loan as part of

21

the requested Borrowing of the details thereof and of
the amount of such Lender’s Revolving Loan to be made as part of the requested
Borrowing.

          SECTION
2.04. [Reserved]. 

          SECTION
2.05. Letters of Credit. 

          (a)
General. Subject to the terms and conditions set forth herein, the
Company and any other Borrower that is a Domestic Subsidiary may request the
issuance (or the amendment, renewal or extension) of Letters of Credit
denominated in US Dollars for its own account, in a form reasonably acceptable
to the Administrative Agent and the relevant Issuing Bank, at any time and from
time to time from the Effective Date until the sooner of (i) the Maturity Date
and (ii) and the date of termination of the Revolving Commitments. In the event
of any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any Letter of Credit Document, the terms and conditions
of this Agreement shall control.

          (b)
Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the relevant Borrower shall hand
deliver or telecopy (or transmit by electronic communication, if arrangements
for doing so have been approved by the relevant Issuing Bank) to the relevant
Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
of this Section), the amount of such Letter of Credit, the name and address of
the beneficiary thereof and such other information as shall be necessary to
enable the relevant Issuing Bank to prepare, amend, renew or extend such Letter
of Credit. If requested by the relevant Issuing Bank, such Borrower also shall
submit a letter of credit application on such Issuing Bank’s standard form in
connection with any request for a Letter of Credit. No Issuing Bank shall be
under any obligation to issue, amend, renew or extend any Letter of Credit if:

	
  

 	
  

 
	
  

 	
           (i)
 after giving effect to such issuance, amendment, renewal or extension
 (i) the LC Exposure shall exceed $50,000,000 or (ii) the aggregate
 Credit Exposures shall exceed the aggregate Revolving Commitments;

 
	
  

 	
  

 
	
  

 	
           (ii)
 any order, judgment or decree of any Governmental Authority or arbitrator
 shall purport by its terms to enjoin or restrain the issuance, amendment,
 renewal or extension of such Letter of Credit or any requirement of law
 applicable to such Issuing Bank or any Lender or any request or directive
 (whether or not having the force of law) from any Governmental Authority with
 jurisdiction over it shall prohibit, or request that it refrain from, the
 issuance of letters of credit generally or such Letter of Credit in
 particular or shall impose upon it with respect to such Letter of Credit any
 restriction or reserve or capital requirement (for which such Issuing Bank or
 any Lender is not otherwise compensated) not in effect on the Effective Date,
 or any unreimbursed loss, cost or expense which was not applicable, in effect
 or known to it as of the Effective Date; or 

 
	
  

 	
  

 
	
  

 	
           (iii)
 any Lender is at such time a Defaulting Lender or Downgraded Lender
 hereunder, unless the Issuing Bank has entered into satisfactory arrangements
 pursuant to Section 2.22 to eliminate its risk with respect to such Lender.

 

22

          (c)
Expiration Date. Each Letter of Credit (other than the Existing Letters
of Credit) shall expire at or prior to the close of business on the earlier of
(i) the date one year after the date of the issuance of such Letter of Credit
(or, in the case of any renewal or extension thereof, one year after such
renewal or extension) and (ii) the Maturity Date, provided, however,
that a Letter of Credit (other than an Existing Letter of Credit) may provide
by its terms, and on terms acceptable to the applicable Issuing Bank, for
renewal for successive periods of one year or less (but not beyond the Maturity
Date) unless and until the applicable Issuing Bank shall have delivered prior
written notice of nonrenewal to the beneficiary of such Letter of Credit no later
than the time specified in such Letter of Credit (which the applicable Issuing
Bank shall do only if one or more of the applicable conditions under Section
4.02 is not then satisfied). Notwithstanding the foregoing, any Existing Letter
of Credit may provide by its terms, and on terms acceptable to applicable
Issuing Bank, for renewal for successive periods of thirteen months or less
unless and until the applicable Issuing Bank shall have delivered a notice of
nonrenewal to the beneficiary of such Existing Letter of Credit no later than
the time specified in such Existing Letter of Credit (or applicable Letter of
Credit Document); provided that the applicable Issuing Bank may deliver
such notice of nonrenewal in its sole discretion and no course of dealing or
other circumstance shall require such Issuing Bank to extend or renew any
Existing Letter of Credit.

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

          (e)
Reimbursement. If any Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the relevant Borrower shall reimburse such LC
Disbursement by paying to the applicable Issuing Bank an amount equal to such
LC Disbursement not later than 2:00 p.m., San Francisco time (or 2:00 p.m.,
Charlotte, North Carolina time, in the case of any Existing Letter of Credit),
on the date that such LC Disbursement is made, if such Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., San Francisco time
(or 10:00 a.m., Charlotte, North Carolina time, in the case of any Existing
Letter of Credit), on such date, or, if such notice has not been received by
such Borrower prior to such time on such date, then not later than 2:00 p.m.,
San Francisco time (or 2:00 p.m., Charlotte, North Carolina time, in the case
of any Existing Letter of Credit), on (i) the Business Day that such Borrower
receives such notice, if such notice is received prior to 10:00 a.m., San
Francisco time (or 10:00 a.m., Charlotte, North Carolina time, in the case of
any Existing Letter of Credit), on the day of receipt, or (ii) the Business Day
immediately following the day that such Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided
that the relevant Borrower may, subject to the conditions to borrowing set
forth herein, request in accordance with Section 2.03 that such payment be
financed with an ABR Borrowing in an equivalent amount and, to the extent so
financed, the relevant Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Borrowing. If the relevant
Borrower fails to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from
such Borrower in

23

respect thereof and such Lender’s Percentage thereof.
Promptly following receipt of such notice, each Lender shall pay to the
Administrative Agent its Percentage of the payment then due from such Borrower,
in the same manner as provided in Section 2.06 with respect to Revolving Loans
made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the
payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the relevant Issuing Bank the amounts so received by it from
the Lenders. Promptly following receipt by the Administrative Agent of any
payment pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the Lenders and the Issuing Banks as their interests may
appear. Any payment made by a Lender pursuant to this paragraph to reimburse
any Issuing Bank for any LC Disbursement (other than the funding of ABR Loans as
contemplated above) shall not constitute a Revolving Loan and shall not relieve
the relevant Borrower of its obligation to reimburse such LC Disbursement.

          (f)
Obligations Absolute. A Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any other Loan Document, or any term or provision
herein or therein, (ii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by
the relevant Issuing Bank under a Letter of Credit against presentation of a
draft or other document that does not comply with the terms of such Letter of
Credit or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right of
set-off against, such Borrower’s obligations hereunder. None of the
Administrative Agent, the Lenders or any Issuing Bank, or any of their Related
Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of
such Issuing Bank; provided that the foregoing shall not be construed to
excuse any Issuing Bank from liability to a Borrower to the extent of any
direct damages (as opposed to special, indirect, consequential or punitive
damages, claims in respect of which are hereby waived by the Borrowers to the
extent permitted by applicable law) suffered by such Borrower that are caused
by such Issuing Bank’s failure to exercise the agreed standard of care (as set
forth below) when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful misconduct
on the part of the relevant Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised
the agreed standard of care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the relevant Issuing Bank may,
in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

          (g)
Disbursement Procedures. The relevant Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. Such Issuing Bank shall promptly
notify the Administrative Agent and the relevant Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such Issuing
Bank has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such

24

notice shall not relieve such Borrower of its
obligation to reimburse the relevant Issuing Bank and the Lenders with respect
to any such LC Disbursement.

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

          (i)
Replacement of any Issuing Bank. Any Issuing Bank may be replaced at any
time by written agreement among the Borrowers, the Administrative Agent (whose
consent shall not be unreasonably withheld), the replaced Issuing Bank (so long
as it is not a Defaulting Lender or a Downgraded Lender) and the successor
Issuing Bank. The Administrative Agent shall notify the Lenders of any such
replacement of any Issuing Bank. At the time any such replacement shall become
effective, the Borrowers shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank in its capacity as such. From and after the effective
date of any such replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the
term “Issuing Bank” shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of an Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to
have all the rights and obligations of an Issuing Bank under this Agreement
with respect to Letters of Credit issued by it prior to such replacement, but
shall not be required to issue additional Letters of Credit.

          (j)
Cash Collateralization. If (i) any Event of Default shall occur and be
continuing, on the Business Day that the Company receives notice from the
Administrative Agent or the Required Lenders demanding the deposit of cash
collateral pursuant to this paragraph or (ii) the Maturity Date shall have
occurred and Letters of Credit remain outstanding, each Borrower shall deposit
in an account with the Administrative Agent, in the name of the Administrative
Agent and for the benefit of the Issuing Banks and the Lenders (the “Cash
Collateral Account”), an amount in cash equal to the LC Exposure for the
account of such Borrower as of such date plus any accrued and unpaid interest
thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand presentment, protest or other notice of any
kind, all of which are expressly waived by the Borrowers, upon the occurrence
of any Bankruptcy Event. Each Borrower hereby grants to the Administrative
Agent, for the benefit of the Issuing Banks and the Lenders, a Lien upon and
security interest in such Cash Collateral Account and all amounts held therein
from time to time as security for LC Exposures for the account of such
Borrower, and for application to such Borrower’s reimbursement obligations as
and when the same shall arise. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrowers’ risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the relevant Issuing Bank for LC Disbursements
for which it has not been reimbursed and, to the extent not so applied, shall
be held for the satisfaction of the reimbursement obligations of the Borrowers,
as applicable, for the LC Exposure at such time or, if the maturity of the
Revolving Loans has been

25

accelerated (but subject to the consent of Lenders
with LC Exposures representing greater than 50% of the total LC Exposure), be
applied to satisfy other obligations of the Borrowers under this Agreement. If
any Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to such Borrower within three Business
Days after all Events of Default have been cured or waived. Borrower agrees to
take all reasonable actions necessary on the Borrower’s part to preserve the
tax-exempt status of any tax-exempt bonds secured by any Letter of Credit,
including but not limited to making yield reduction payments on any investment
earnings on amounts in the Cash Collateral Account (but only as to such portion
of the Cash Collateral Account equal to the principal amount of any outstanding
tax-exempt bonds).

          (k)
Existing Letters of Credit. The Borrowers and the Lenders agree that, as
of the Effective Date, each Existing Letter of Credit issued for the account of
any such Borrower and set forth on Schedule 2.05 on the Effective Date will be
deemed issued for the account of such Borrower under this Agreement as a Letter
of Credit.

          SECTION
2.06. Funding of Borrowings.

          (a)
Each Lender shall make each Revolving Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, Local Time, to the account of the Administrative Agent most recently
designated by it for such purpose by notice to the Lenders. The Administrative
Agent will make such Revolving Loans available to the relevant Borrower by
promptly crediting the amounts so received, in like funds, to an account of
such Borrower maintained by the Administrative Agent, and designated by such
Borrower in the applicable Borrowing Request.

          (b)
Unless the Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Borrowing (or in the case of an ABR Loan, prior to
12:00 noon, San Francisco time, on the date of such Borrowing) that such Lender
will not make available to the Administrative Agent such Lender’s share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and such Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to such Borrower to but excluding the date of payment to the
Administrative Agent, at (x) the Federal Funds Effective Rate (in the case
of a Borrowing in US Dollars), or (y) the rate reasonably determined by
the Administrative Agent to be the cost to it of funding such amount (in the
case of a Borrowing in a Designated Foreign Currency), but not in excess of the
interest rate that would have applied to that Borrowing under the terms of this
Agreement. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Revolving Loan included in such
Borrowing.

          SECTION
2.07. Interest Elections. 

          (a)
Each Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
relevant Borrower may elect to convert any Borrowing to a Borrowing of a
different Type and, in the case of a Eurocurrency Borrowing, may elect Interest
Periods therefor, all as provided in this Section, provided that no
Eurocurrency Loan denominated in a Designated Foreign Currency may be converted
into an ABR Loan. A Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated

26

ratably among the Lenders holding the Revolving Loans
comprising such Borrowing, and the Revolving Loans comprising each such portion
shall be considered a separate Borrowing. Notwithstanding the foregoing, no
Borrowing may be converted to a Borrowing denominated in a different currency. 

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

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

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

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

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

          (e)
If the relevant Borrower fails to deliver a timely Interest Election Request
with respect to a Eurocurrency Borrowing or irrevocable notice of its intent to
prepay such Borrowing as of the end of the applicable Interest Period thereto,
prior to 11:00 a.m., Local Time, three Business Days prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
deemed to be and shall be continued as a Eurocurrency Borrowing, with an
Interest Period of one month’s duration (unless such Borrowing is denominated
in any Designated Foreign Currency, in which case such Borrowing shall become
due and payable on the last day of such Interest Period). Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required
Lenders, so notifies the Company, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurocurrency Borrowing and (ii) unless

27

repaid, each Eurocurrency Borrowing denominated in US
Dollars shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.

          SECTION
2.08. Termination and Reduction of Revolving Commitments.

          (a)
Unless previously terminated, the Revolving Commitments shall terminate on the
Maturity Date.

          (b)
Upon at least three Business Days’ prior irrevocable written notice to the
Administrative Agent, the Company may at any time terminate, or from time to
time reduce, the Revolving Commitments; provided that (i) each
reduction of the Revolving Commitments shall be in an amount that is an
integral multiple of US$1,000,000 and in a minimum amount of US$5,000,000 and
(ii) the Company shall not terminate or reduce the Revolving Commitments
if, after giving effect to any concurrent prepayment of Revolving Loans in
accordance with this Agreement, the aggregate Credit Exposures would exceed the
aggregate Revolving Commitments.

          (c)
The Company shall notify the Administrative Agent in writing of any election to
terminate or reduce the Revolving Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice pursuant to this Section
2.08, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Company pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Revolving
Commitments delivered by the Company may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice
may be revoked by the Company (by notice to the Administrative Agent on or
prior to the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Revolving Commitments shall be permanent. Each
reduction of the Revolving Commitments shall be made ratably among the Lenders
in accordance with their respective Revolving Commitments.

          SECTION
2.09. Repayment of Revolving Loans; Evidence of Debt.

          (a)
Each Borrower hereby unconditionally promises, as to the Revolving Loans made
to it, to pay to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each such Revolving Loan on the Maturity Date.

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

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

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

28

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

          SECTION
2.10. Prepayment of Revolving Loans.

          (a)
Any Borrower shall have the right at any time and from time to time to prepay
any Borrowing of such Borrower in whole or in part, subject to (i) prior notice
in accordance with paragraph (c) of this Section and (ii) in the case of a
Eurocurrency Loan, reimbursement of any breakage costs if prepayment occurs
other than at the end of an Interest Period.

          (b)
In the event and on each occasion that the aggregate Credit Exposures exceed
the aggregate Revolving Commitments, the Borrowers shall promptly prepay
Borrowings in an aggregate amount sufficient to eliminate such excess, provided
that, to the extent such excess amount is greater than the aggregate principal
amount of Revolving Loans outstanding immediately prior to the application of
such prepayment, the amount so prepaid shall be retained by the Administrative
Agent and held in the Cash Collateral Account as cover for the LC Exposures, as
more particularly described in Section 2.05(j), and thereupon such cash shall
be deemed to reduce the LC Exposures by an equivalent amount. 

          (c)
The Company shall notify the Administrative Agent by telephone (confirmed by
telecopy) of any prepayment hereunder not later than 11:00 a.m., Local Time,
(i) in the case of the prepayment of any Borrowing denominated in US Dollars,
one Business Day, or (ii) in the case of the prepayment of any Borrowing
denominated in any Designated Foreign Currency, three Business Days before the
date of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof
to be prepaid; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Revolving
Commitments as contemplated by Section 2.08, then such notice of
prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08. Promptly following receipt of any such
notice, the Administrative Agent shall advise the applicable Lenders of the
contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the
same Type as provided in Section 2.02. Each prepayment of a Borrowing
shall be applied ratably to the Revolving Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.12.

          SECTION
2.11. Fees.

          (a)
Subject to Section 2.22, the Company agrees to pay to the Administrative Agent,
in US Dollars, for the account of the office (or Affiliate) of each Lender from
which such Lender would make Revolving Loans to the Company in US Dollars
hereunder (which office or Affiliate shall be specified by each Lender in a
notice delivered to the Administrative Agent prior to the initial payment to
such Lender under this paragraph), a facility fee, which shall accrue at the
Applicable Rate on the daily aggregate amount of the Revolving Commitments of
such Lender (whether used or unused) during the period from and including the
Effective Date to but excluding the date on which the last of such Revolving
Commitments terminates; provided that, if such Lender continues to have
any Credit Exposure after its Revolving Commitment terminate, then such
facility fee shall continue to accrue on the daily amount of such Lender’s
Credit Exposures from and including the date on which the last of its Revolving

29

Commitment terminates to but excluding the date on
which such Lender ceases to have any Credit Exposure. Accrued facility fees
shall be payable in arrears on the last day of March, June, September and
December of each year (commencing on the first such date to occur after the
date hereof), on the date on which the Revolving Commitments terminate and on
the Maturity Date; provided that any facility fees accruing after the
Maturity Date shall be payable on demand. All facility fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number
of days elapsed (including the first day but excluding the last day).

          (b)
Subject to Section 2.22, the Company agrees to pay (i) to the Administrative
Agent (or the Issuing Bank with respect to the Existing Letters of Credit) for
the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate used from time to time to determine the interest rate applicable to
Eurocurrency Loans on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date hereof to but excluding the later
of the date on which such Lender’s Revolving Commitment terminates and the date
on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing
Bank a fronting fee, which shall accrue at the rate or rates per annum
separately agreed upon between the Company and such Issuing Bank on the average
daily amount of the LC Exposure attributable to Letters of Credit issued by
such Issuing Bank (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to
but excluding the later of the date of termination of the Revolving Commitments
and the date on which there ceases to be any LC Exposure attributable to
Letters of Credit issued by such Issuing Bank, as well as each Issuing Bank’s
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Accrued
participation fees and fronting fees shall be payable on the last day of March,
June, September and December of each year, commencing on the first such date to
occur after the date hereof; provided that all such fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day);
and provided further that, notwithstanding the foregoing, with
respect to the Existing Letters of Credit, participation fees and fronting fees
shall payable in advance on the first day of January, April, July, and October
of each year.

          (c)
The Company agrees to pay to the Administrative Agent and the Arrangers the
fees described in the Fee Letter, on the terms, in the amount and at the times
set forth therein.

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

          SECTION
2.12. Interest.

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

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

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

30

of this Section or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a)
of this Section.

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

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

          SECTION
2.13. Alternate Rate of Interest; Illegality. 

          (a)
If prior to the commencement of any Interest Period for a Eurocurrency
Borrowing denominated in any currency:

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

then the Administrative Agent shall give notice
thereof to the Company and the Lenders by telephone or telecopy as promptly as
practicable thereafter and, until the Administrative Agent notifies the Company
and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any
Borrowing denominated in such currency to, or continuation of any Borrowing
denominated in such currency as, a Eurocurrency Borrowing shall be ineffective
and any Eurocurrency Borrowing denominated in such currency that is requested
to be continued (A) if such currency is the US Dollar, shall be converted to an
ABR Borrowing on the last day of the Interest Period applicable thereto and (B)
if such currency is a Designated Foreign Currency, shall be repaid on the last
day of the Interest Period applicable thereto and (ii) any Borrowing Request
for a Eurocurrency Borrowing denominated in such currency (A) if such currency
is the US Dollar, shall be deemed a request for an ABR Borrowing and (B) if
such currency is a Designated Foreign Currency, shall be ineffective.

          (b)
Notwithstanding any other provision in this Agreement, if, at any time and from
time to time, any Lender shall have determined in good faith that any
applicable law, rule or regulation or any interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or compliance with any guideline or request from any
such Governmental

31

Authority (whether or not having the force of law), shall
make it unlawful for such Lender (or any of its lending offices) to honor it
obligations hereunder to make or maintain Revolving Loans in any jurisdiction
(such jurisdiction, an “Affected Jurisdiction”), such Lender will forthwith so
notify the Administrative Agent and the Company. Upon such notice, (i) each of
such Lender’s then outstanding Revolving Loans to any Borrower in such Affected
Jurisdiction shall automatically, on the expiration date of the respective
Interest Period applicable thereto (or, to the extent any such Revolving Loan
may not lawfully be maintained until such expiration date, upon such notice) be
repaid and (ii) the obligations of the affected Lender or Lenders to make or
maintain Revolving Loans into the Affected Jurisdiction and the rights of any
Borrower to request or continue any Revolving Loans of the affected Lender or
Lenders in such Affected Jurisdiction shall be suspended, until such Lender
shall have determined that the circumstances giving rise to such suspension no
longer exist and shall have so notified the Administrative Agent, and the
Administrative Agent shall have so notified the Company.

          SECTION
2.14. Increased Costs. 

          (a)
If any Change in Law shall:

	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurocurrency Loan
(or of maintaining its obligation to make any such Eurocurrency Loan) or to
increase the cost to such Lender or such Issuing Bank of participating in,
issuing or maintaining any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or such Issuing Bank hereunder (whether
of principal, interest or otherwise), then the Company will pay to such Lender
or such Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or such Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.

          (b)
If any Lender or any Issuing Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender’s or such Issuing Bank’s capital or on the capital of
such Lender’s or such Issuing Bank’s holding company, if any, as a consequence
of this Agreement or the Revolving Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by such Issuing
Bank, to a level below that which such Lender or such Issuing Bank or such
Lender’s or such Issuing Bank’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or such Issuing
Bank’s policies and the policies of such Lender’s or such Issuing Bank’s
holding company with respect to capital adequacy), then from time to time the
Company will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank or such Lender’s or such Issuing Bank’s holding company for any such
reduction suffered.

          (c)
A certificate of a Lender or an Issuing Bank setting forth the amount or
amounts necessary to compensate such Lender or such Issuing Bank or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Company and shall be conclusive

32

absent manifest error. The Company shall pay such
Lender or such Issuing Bank, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.

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

          SECTION
2.15. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Revolving Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.08(c) and is revoked in accordance therewith), or (d) the
assignment of any Eurocurrency Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Company pursuant to
Section 2.18, then, in any such event, each Borrower, as to any of the
foregoing events pertaining to such Borrower, shall compensate each Lender
including, in each of the foregoing cases, any loss of anticipated profits and
any loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain such loans or from fees payable to terminate the
deposits from which such funds were obtained. Such Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing. For purposes of calculating amounts payable by any Borrower to
Lenders under this Section 2.15, each Lender shall be deemed to have funded
each Eurocurrency Loan made by it at the LIBO Rate used in determining the
Adjusted LIBO Rate for such loan by a matching deposit or other borrowing in
the London interbank offered market for a comparable amount and for a
comparable period, whether or not such Eurocurrency Loan was in fact so funded.

          SECTION
2.16. Taxes.

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

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

          (c)
Each Borrower shall indemnify the Administrative Agent, each Lender and each
Issuing Bank, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such
Lender or such Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of such Borrower hereunder or under

33

any other Loan Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability
delivered to the Company by a Lender or by an Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or an Issuing
Bank, shall be conclusive absent manifest error.

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

          (e)
Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which a Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Company (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Company as will permit such payments to be made
without withholding or at a reduced rate; provided, that no Lender shall
be required to deliver any such documentation with respect to an exemption from
or reduction of withholding taxes imposed under the law of a jurisdiction other
than the United States of America unless the Company shall notify it of the
availability of such exemption or reduction and shall request the delivery of
such documentation.

          SECTION
2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs; Recovery
of Payments; Apportionment of Payments.

          (a)
Each Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under
Section 2.14, 2.15, 2.16, 2.20 or 2.21 or otherwise) prior to 2:00 p.m.,
Local Time, on the date when due, in immediately available funds, without set-off
or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent to such account as it
shall from time to time specify at its offices specified in Section 9.01, or,
in any such case, at such other address as the Administrative Agent shall from
time to time specify in a notice delivered to the Company; provided that
payments to be made directly to any Issuing Bank, the Administrative Agent, the
Arrangers or any Lender as expressly provided herein and payments pursuant to
Section 2.14, Section 2.15, Section 2.16 and Section 9.03
shall be made directly to the Persons entitled thereto. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof.
Except as set forth in the definition of “Interest Period”, if any payment
hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder of principal or interest in
respect of any Revolving Loan (or of any breakage indemnity in respect of any
Revolving Loan) shall be made in the currency of such Revolving Loan; all other
payments hereunder and under each other Loan Document shall be made in US
Dollars. Any payment required to be made by the Administrative Agent hereunder
shall be deemed to have been made by the time required if the Administrative
Agent shall, at or before such time, have taken the necessary steps to make
such payment in accordance with the regulations or operating procedures of the
clearing or settlement system used by the Administrative Agent

34

to make such payment. Any amount payable by the
Administrative Agent to one or more Lenders in the national currency of a
member state of the European Union that has adopted the Euro as its lawful
currency shall be paid in Euro.

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

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

          (d)
Unless the Administrative Agent shall have received notice from the Company
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or any Issuing Bank hereunder that the relevant
Borrower will not make such payment, the Administrative Agent may assume that
such Borrower has made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the Lenders or the
relevant Issuing Bank, as the case may be, the amount due. In such event, if
such Borrower has not in fact made such payment, then each of the Lenders or
such Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or such Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date
of payment to the Administrative Agent, at (i) the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation (in the case
of a Borrowing in US Dollars) and (ii) the rate reasonably determined by
the Administrative Agent to be the cost to it of funding such amount (in the
case of a Borrowing in a Designated Foreign Currency).

          (e)     If
any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.06(b) or 2.17(d), then the Administrative Agent may, in its
discretion (notwithstanding any

35

contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid. 

          (f)
Each Borrower agrees that to the extent such Borrower makes a payment or
payments to or for the account of the Administrative Agent, any Lender or any
Issuing Bank, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
to be repaid to a trustee, receiver or any other party under any bankruptcy,
insolvency or similar state or federal law, common law or equitable cause
(whether as a result of any demand, settlement, litigation or otherwise), then,
to the extent of such payment or repayment, the Obligation intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been received.

          (g)
If any amounts distributed by the Administrative Agent to any Lender are
subsequently returned or repaid by the Administrative Agent to any Borrower,
its representative or successor in interest, or any other Person, whether by
court order, by settlement approved by the Lender in question, or pursuant to
applicable requirements of law, such Lender will, promptly upon receipt of
notice thereof from the Administrative Agent, pay the Administrative Agent such
amount. If any such amounts are recovered by the Administrative Agent from any
Borrower, its representative or successor in interest or such other Person, the
Administrative Agent will redistribute such amounts to the Lenders on the same
basis as such amounts were originally distributed.

          (h)
Notwithstanding any other provision of this Agreement or any other Loan
Document to the contrary, all amounts collected or received by the Administrative
Agent or any Lender after acceleration of the Loans pursuant to Section 9.2 or
in respect of any sale of, collection from or other realization upon all or any
part of any collateral, pursuant to the exercise by the Administrative Agent of
its remedies shall be applied by the Administrative Agent as follows:

	
  

 	
  

 
	
  

 	
           (i)
 first, to the payment of all reasonable out-of-pocket costs and expenses
 (including, without limitation, reasonable attorneys’ and consultants’ fees
 irrespective of whether such fees are allowed as a claim after the occurrence
 of a Bankruptcy Event) of the Administrative Agent in connection with
 enforcing the rights of the Lenders under the Loan Documents and any
 protective advances made by the Administrative Agent with respect to any
 collateral;

 
	
  

 	
  

 
	
  

 	
           (ii)
 second, to the payment of any fees owed to the Administrative Agent hereunder
 or under any other Loan Document;

 
	
  

 	
  

 
	
  

 	
           (iii)
 third, to the payment of all reasonable and documented out-of-pocket costs
 and expenses (including, without limitation, reasonable attorneys’ and
 consultants’ fees irrespective of whether such fees are allowed as a claim
 after the occurrence of a Bankruptcy Event) of each of the Lenders in
 connection with enforcing its rights under the Loan Documents or otherwise
 with respect to the Obligations owing to such Lender;

 
	
  

 	
  

 
	
  

 	
           (iv)
 fourth, to the payment of all of the Obligations consisting of accrued fees
 and interest (including, without limitation, fees incurred and interest
 accruing at the then applicable rate after the occurrence of a Bankruptcy
 Event irrespective of whether a claim for such fees incurred and interest
 accruing is allowed in such proceeding), and including with respect to any
 Hedge Agreement between any Borrower and any Hedge Party (to the extent such
 Hedge Agreement is permitted hereunder), any fees, premiums and scheduled
 periodic payments due under such Hedge Agreement prior to any termination
 thereof and any interest accrued thereon;

 

36

	
  

 	
  

 
	
  

 	
           (v)
 fifth, to the payment of the outstanding principal amount of the Obligations
 (including the payment of any outstanding LC Disbursements and the obligation
 to cash collateralize LC Exposure), and including with respect to any Hedge
 Agreement between any Borrower and any Hedge Party (to the extent such Hedge
 Agreement is permitted hereunder), any breakage, termination or other
 payments due under such Hedge Agreement (other than payments described in
 clause (iv) above) and any interest accrued thereon;

 
	
  

 	
  

 
	
  

 	
           (vi)
 sixth, to the payment of all other Obligations and other obligations that
 shall have become due and payable under the Loan Documents or otherwise and
 not repaid; and

 
	
  

 	
  

 
	
  

 	
           (vii)
 seventh, to the payment of the surplus (if any) to whomever may be lawfully
 entitled to receive such surplus.

 

          In
carrying out the foregoing, (x) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category, (y) all amounts shall be apportioned ratably among the
Lenders or Hedge Parties in proportion to the amounts of such principal,
interest, fees or other Obligations owed to them respectively pursuant to
clauses (iii) through (vii) above, and (z) to the extent that any amounts available
for distribution pursuant to clause (v) above are attributable to the issued
but undrawn amount of outstanding Letters of Credit, such amounts shall be held
by the Administrative Agent to cash collateralize Letter of Credit Exposure
pursuant to Section 2.05(j). For purposes of applying amounts in accordance
with this Section, the Administrative Agent shall be entitled to rely upon any
Hedge Party that has entered into a Hedge Agreement with any Borrower for a
determination (which such Hedge Party agrees to provide or cause to be provided
upon request of the Administrative Agent) of the outstanding Obligations owed
to such Hedge Party under any such Hedge Agreement. Unless it has actual
knowledge (including by way of written notice from any such Hedge Party) to the
contrary, the Administrative Agent, in acting hereunder, shall be entitled to
assume that no Hedge Agreements or Obligations in respect thereof are in
existence between any Hedge Party and any Borrower. 

          SECTION
2.18. Mitigation Obligations; Replacement of Lenders.

          (a)
If any Lender requests compensation under Section 2.14, or if any Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then
such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Revolving Loans hereunder or to assign its
rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.14 or
2.16, as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender. The Company hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

          (b)
If (i) any Lender requests compensation under Section 2.14, (ii) any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to
Section 2.16, (iii) any Lender is a Defaulting Lender or a Downgraded
Lender or (iv) any Lender has not consented to a consent, waiver or amendment
to any Loan Document requested by the Company or the Administrative Agent and
that requires the approval of the Required Lenders under Section 9.02(b) which
is otherwise approved by the Required Lenders, then the Company may, at its
sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under the Loan
Documents to an assignee that shall

37

assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the
Company shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Revolving Loans and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (iii) in the
case of any such assignment resulting from a claim for compensation under
Section 2.14 or payments required to be made pursuant to
Section 2.16, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such assignment
and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Company to require such assignment
and delegation cease to apply.

          SECTION
2.19. Borrowing Subsidiaries. On or after the Effective Date, the
Company may designate any Subsidiary of the Company as a Borrowing Subsidiary
by delivery to the Administrative Agent and the Lenders of a Borrowing
Subsidiary Agreement executed by such Subsidiary and the Company, and upon the
date five Business Days following such delivery of the executed Borrowing
Subsidiary Agreement to the Administrative Agent and the Lenders, such
Subsidiary shall for all purposes of this Agreement be a Borrowing Subsidiary
and a party to this Agreement; provided that during such five Business
Day period, such Subsidiary may request a Borrowing pursuant to Section 2.03 if
(x) the date of the proposed Borrowing is outside of such five Business Day
period and (y) in the case of a proposed Eurocurrency Borrowing, such Subsidiary
has provided the Administrative Agent, for the benefit of the Lenders, an
executed LIBO Rate indemnity letter in form and substance reasonably acceptable
to the Administrative Agent. Upon the execution by the Company and delivery to
the Administrative Agent of a Borrowing Subsidiary Termination with respect to
any Borrowing Subsidiary, such Subsidiary shall cease to be a Borrowing
Subsidiary and a party to this Agreement; provided that no Borrowing
Subsidiary Termination will become effective as to any Borrowing Subsidiary
(other than to terminate such Borrowing Subsidiary’s right to make further
Borrowings under this Agreement) at a time when any principal of or interest on
any Revolving Loan to such Borrowing Subsidiary shall be outstanding hereunder.
Promptly following receipt of any Borrowing Subsidiary Agreement or Borrowing
Subsidiary Termination, the Administrative Agent shall send a copy thereof to
each Lender.

          SECTION
2.20. Additional Reserve Costs.

          (a)
If and so long as any Lender is required to make special deposits with the Bank
of England, to maintain reserve asset ratios or to pay fees, in each case in
respect of such Lender’s Eurocurrency Loans in any Designated Foreign Currency,
such Lender may require the relevant Borrower to pay, contemporaneously with
each payment of interest on each of such loans, additional interest on such
loan at a rate per annum equal to the Mandatory Costs Rate calculated in
accordance with the formula and in the manner set forth in Exhibit D hereto.

          (b) If and
so long as any Lender is required to comply with reserve assets, liquidity,
cash margin or other requirements of any monetary or other authority (including
any such requirement imposed by the European Central Bank or the European
System of Central Banks, but excluding requirements reflected in the Statutory
Reserve Rate or the Mandatory Costs Rate) in respect of any of such Lender’s
Eurocurrency Loans in any Designated Foreign Currency, such Lender may require
the relevant Borrower to pay, contemporaneously with each payment of interest
on each of such Lender’s Eurocurrency Loans subject to such requirements,
additional interest on such loan at a rate per annum specified by such Lender
to be the cost to such Lender of complying with such requirements in relation
to such loan.

38

          (c) Any
additional interest owed pursuant to paragraph (a) or (b) above shall be
determined by the relevant Lender, which determination shall be conclusive
absent manifest error, and notified to the relevant Borrower (with a copy to
the Administrative Agent) at least five Business Days before each date on which
interest is payable for the relevant Revolving Loan, and such additional
interest so notified to the relevant Borrower by such Lender shall be payable
to the Administrative Agent for the account of such Lender on each date on
which interest is payable for such Revolving Loan.

          SECTION
2.21. Foreign Subsidiary Costs.

          (a) If
the cost to any Lender of making or maintaining any Revolving Loan to any
Borrowing Subsidiary that is not named on the signature pages to this Agreement
is increased (or the amount of any sum received or receivable by any Lender (or
its applicable lending office) is reduced) by an amount deemed in good faith by
such Lender to be material, by reason of the fact that such Borrowing
Subsidiary is incorporated in, or conducts business in, a jurisdiction outside
the United States of America, such Borrowing Subsidiary shall indemnify such
Lender for such increased cost or reduction within 15 days after demand by such
Lender (with a copy to the Administrative Agent). A certificate of such Lender
claiming compensation under this paragraph and setting forth the additional
amount or amounts to be paid to it hereunder (and the basis for the calculation
of such amount or amounts) shall be conclusive in the absence of manifest
error.

          (b) Each
Lender will promptly notify the Company and the Administrative Agent of any
event of which it has knowledge that will entitle such Lender to additional
interest or payments pursuant to paragraph (a) above, but in any event within
45 days after such Lender obtains actual knowledge thereof; provided
that (i) if any Lender fails to give such notice within 45 days after it
obtains actual knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 2.21 in respect of any costs
resulting from such event, only be entitled to payment under this
Section 2.21 for costs incurred from and after the date 45 days prior to
the date that such Lender does give such notice and (ii) each Lender will
designate a different applicable lending office, if, in the judgment of such
Lender, such designation will avoid the need for, or reduce the amount of, such
compensation and will not be otherwise disadvantageous to such Lender.

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

          (a) facility
fees shall cease to accrue on the unused portion of the Revolving Commitment of
any Defaulting Lender pursuant to Section 2.11(a);

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

          (c) so
long as any Lender is a Defaulting Lender or a Downgraded Lender, no Issuing
Bank shall be required to issue, extend, create, incur, amend or increase any
Letter of Credit unless such Issuing Bank has entered into satisfactory
arrangements with the Company or such Lender to eliminate such Issuing Bank’s
risk with respect to such Lender; and

39

          (d) any
amount payable to any Defaulting Lender hereunder (whether on account of
principal, interest, fees or otherwise and including any amount that would
otherwise be payable to such Defaulting Lender pursuant to Section 2.18(d) but
excluding Section 2.19(b)) shall, in lieu of being distributed to such
Defaulting Lender, be retained by the Administrative Agent in a segregated
account and, subject to any applicable requirements of law, be applied at such
time or times as may be determined by the Administrative Agent (i) first, to
the payment of any amounts owing by such Defaulting Lender to the
Administrative Agent hereunder, (ii) second, to the payment of any amounts
owing by such Defaulting Lender to any Issuing Bank hereunder, (iii) third, if
so determined by the Administrative Agent or requested by any Issuing Bank, to
be held in such account as cash collateral for future funding obligations of
the Defaulting Lender of any participating interest in any Letter of Credit,
(iv) fourth, to the funding of any Revolving Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Administrative Agent, (v) fifth, if so
determined by the Administrative Agent and the Company, held in such account as
cash collateral for future funding obligations of the Defaulting Lender of any
Revolving Loans under this Agreement, (vi) sixth, to the payment of any amounts
owing to the Lenders or any Issuing Bank as a result of any judgment of a court
of competent jurisdiction obtained by any Lender or any Issuing Bank against
such Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement, (vii) seventh, to the payment of any amounts
owing to the Borrowers as a result of any judgment of a court of competent
jurisdiction obtained by the Borrowers against such Defaulting Lender as a
result of such Defaulting Lender’s breach of its obligations under this
Agreement, and (viii) eighth, to such Defaulting Lender or as otherwise
directed by a court of competent jurisdiction.

          SECTION
2.23. Increase in Revolving Commitments. 

          (a) From
time to time on and after the Effective Date and prior to the date of
termination of the Revolving Commitments, the Company may, upon at least 30
days notice to the Administrative Agent (which shall promptly provide a copy of
such notice to the Lenders), propose to increase the aggregate amount of the
Revolving Commitments by an amount which (i) is not less than $15,000,000 or,
if greater, an integral multiple of $1,000,000 in excess thereof, with respect
to any such request and (ii) when aggregated with all prior and concurrent
increases in the Revolving Commitments pursuant to this Section 2.23, is not in
excess of $185,000,000, provided that at no time shall the aggregate Revolving
Commitments exceed $650,000,000. The Company may increase the aggregate amount
of the Revolving Commitments by (x) having another lender or lenders (each, an
“Additional Lender”) become party to this Agreement, (y) agreeing with any
Lender (with the consent of such Lender in its sole discretion) to increase its
Revolving Commitment hereunder (each, an “Increasing Lender”) or (z) a
combination of the procedures described in clauses (x) and (y) of this
sentence; provided that no Lender shall be obligated to increase its Revolving
Commitment without its consent. 

          (b) Any
increase in the Revolving Commitments pursuant to this Section 2.23 shall be
subject to satisfaction of the following conditions:

	
  

 	
  

 
	
  

 	
           (i) Each
 of the representations and warranties contained in Article III and in the
 other Loan Documents shall be true and correct in all material respects, in
 each case on and as of such date of increase with the same effect as if made
 on and as of such date, both immediately before and after giving effect to
 such increase (except to the extent any such representation or warranty is
 expressly stated to have been made as of a specific date, in which case such
 representation or warranty shall be true and correct as of such date); and

 
	
  

 	
  

 
	
  

 	
           (ii) At
 the time of such increase, no Default shall have occurred and be continuing
 or would result from such increase.

 

40

          (c) 
Upon the effective date of any increase in the amount of the Revolving
Commitments pursuant to this Section 2.23 (each, an “Additional Commitment”):

	
  

 	
  

 
	
  

 	
           (i) Each
 Additional Lender or Increasing Lender shall enter into a joinder agreement
 in form and substance reasonably satisfactory to the Administrative Agent
 pursuant to which such Additional Lender and/or Increasing Lender shall, as
 of the effective date, undertake an Additional Commitment (or, in the case of
 an Increasing Lender, pursuant to which such Increasing Lender’s Revolving
 Commitment shall be increased in the agreed amount on such date) and such
 Additional Lender shall thereupon become (or, if an Increasing Lender, continue
 to be) a “Lender” for all purposes hereof; and

 
	
  

 	
  

 
	
  

 	
           (ii) Each
 of the existing Lenders shall assign to each Person providing an Additional
 Commitment, and each such Person shall purchase from each of the existing
 Lenders, Revolving Loans (together with accrued but unpaid interest thereon),
 in an amount as shall be necessary in order that, after giving effect to all
 such assignments and purchases, such Revolving Loans will be held by existing
 Lenders and the Person making the Additional Commitments ratably in
 accordance with their Applicable Percentage after giving effect to such
 Additional Commitments.

 

          (d) If
any such Additional Lender is a Foreign Lender, such Additional Lender shall
deliver the forms required by Section 2.16(e).

          (e) This
Section 2.23 shall supersede any provisions in Section 9.02 to the contrary.
Notwithstanding any other provision of any Loan Document, the Loan Documents
may be amended by Administrative Agent and the Borrowers, if necessary, to
provide for terms applicable to each Additional Commitment.

ARTICLE
III

Representations and Warranties

          The
Company represents and warrants to the Lenders that:

          SECTION
3.01. Corporate Existence and Power. The Company, the Borrowing
Subsidiaries and the Subsidiary Guarantors are each corporations duly
organized, validly existing and in good standing under the laws of the
jurisdiction of their incorporation, are duly qualified to transact business in
every jurisdiction where, by the nature of its business, the failure to be so
qualified could have or cause a Material Adverse Effect, and have all corporate
powers and all governmental licenses, authorizations, consents and approvals
required to carry on their business as now conducted.

          SECTION
3.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Borrowers of this Agreement and
the other Loan Documents, and the execution by the Subsidiary Guarantors of the
Guarantee Agreement and the Indemnity, Subrogation and Contribution Agreement
(i) are within the Borrowers’ and the Subsidiary Guarantors’ respective
corporate powers, (ii) have been duly authorized by all necessary corporate
action, (iii) require no action by or in respect of or filing with any
governmental body, agency or official, (iv) do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of the Company or any Subsidiary or of
any agreement, judgment, injunction, order, decree or other instrument binding
upon the Company or any of its Subsidiaries, and (v) do not result in the
creation or imposition of any Lien on any asset of the Company or any of its
Subsidiaries.

41

          SECTION
3.03. Binding Effect. This Agreement has been duly executed and
delivered and constitutes a valid and binding agreement of the Borrowers
enforceable in accordance with its terms, and the other Loan Documents, when
executed and delivered in accordance with this Agreement, will constitute valid
and binding obligations of the Borrowers and the Subsidiary Guarantors party
thereto, enforceable in accordance with their respective terms, provided that
the enforceability hereof and thereof is subject in each case to general
principles of equity and to bankruptcy, insolvency and similar laws affecting
the enforcement of creditors’ rights generally.

          SECTION
3.04. Financial Information. 

          (a) The
audited balance sheet of the Company and the Consolidated Subsidiaries as of
October 31, 2008, and the related statements of income, shareholders’ equity
and cash flows for the Fiscal Year then ended, reported on by Ernst & Young
LLP, and the unaudited balance sheets of the Company and the Consolidated Subsidiaries
as of January 30, 2009 and May 1, 2009 and the related statements of income,
shareholders’ equity and cash flows for the Fiscal Quarters and portions of the
Fiscal Year then ended, copies of all of which have been delivered to each of
the Lenders, fairly present, in conformity with GAAP, the consolidated
financial position of the Company and the Consolidated Subsidiaries as of such
dates and their results of operations and cash flows for such periods.

          (b) Since
October 31, 2008, there has been no Material Adverse Effect.

          (c) Neither
(i) the board of directors of the Company or a committee thereof has
concluded that any financial statement previously furnished to the
Administrative Agent should no longer be relied upon because of an error, nor
(ii) has the Company been advised by its auditors that a previously issued
audit report or interim review cannot be relied on.

          SECTION
3.05. No Litigation. There is no action, suit or proceeding
pending, or to the knowledge of the Company threatened, against or affecting
the Company or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could have a Material Adverse
Effect or which in any manner draws into question the validity of or could
impair the ability of any Borrower or Subsidiary Guarantor to perform its
obligations under this Agreement or any of the other Loan Documents.

          SECTION
3.06. Compliance with ERISA. 

          (a) The
Company and each member of the Controlled Group have fulfilled their
obligations under the minimum funding standards of ERISA and the Code with
respect to each Plan and are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code, and have not incurred any
liability to the PBGC or a Plan under Title IV of ERISA.

          (b) Neither
the Company nor any member of the Controlled Group has incurred any Withdrawal
Liability with respect to any Multiemployer Plan under Title IV of ERISA, and
no such liability is expected to be incurred.

          SECTION
3.07. Compliance with Laws; Payment of Taxes. The Company and the
Subsidiaries are in compliance in all material respects with all applicable
laws, regulations and similar requirements of Governmental Authorities, except
for the matters disclosed in Schedule 3.14, except where the failure to comply
would not have or cause a Material Adverse Effect. There have been filed on
behalf of the Company and its Subsidiaries all Federal, state and local income,
excise, property and other tax returns which are required to be filed by them
and all taxes due pursuant to such returns or pursuant to any assessment
received by or on behalf of the Company or any Subsidiary have been paid or are
being 

42

contested in good faith by appropriate proceedings. The charges,
accruals and reserves on the books of the Company and the Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Company, adequate. United States income tax returns of the Company and the
Subsidiaries have been examined and closed through the Fiscal Year ended
October 28, 2005.

          SECTION
3.08. Subsidiaries. Each of the Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its jurisdiction
of incorporation, is duly qualified to transact business in every jurisdiction
where, by the nature of its business, such qualification is necessary, and has
all corporate powers and all governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted, except where
the failure to qualify or have any such license, authorization, consent or
approval would not have or cause a Material Adverse Effect. The Company has no
Subsidiaries except for those Subsidiaries listed on Schedule 3.08, or as
described in a Compliance Certificate furnished pursuant to Section 5.01(c), in
each case which accurately sets forth each such Subsidiary’s complete name and
jurisdiction of incorporation. Each Domestic Material Subsidiary on the date
hereof is separately identified as such in Schedule 3.08 hereto.

          SECTION
3.09. Investment Company Act. Neither the Company nor any of its
Subsidiaries is an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

          SECTION
3.10. [Reserved]. 

          SECTION
3.11. Ownership of Property; Liens. Each of the Company and its
Consolidated Subsidiaries has title to its properties sufficient for the
conduct of its business, and none of such property is subject to any Lien
except as permitted in Section 5.08.

          SECTION
3.12. No Default. Neither the Company nor any of the Consolidated
Subsidiaries is in default under or with respect to any agreement, instrument
or undertaking to which it is a party or by which it or any of its property is
bound which could have or cause a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing.

          SECTION
3.13. Full Disclosure. All information heretofore furnished by the
Company or any Subsidiary to the Administrative Agent or any Lender for
purposes of or in connection with this Agreement or any transaction
contemplated hereby (including without limitation the information set forth in
the Information Memorandum) is, and all such information hereafter furnished by
the Company or any Subsidiary to the Administrative Agent or any Lender will
be, true, accurate and complete in every material respect or based on
reasonable estimates on the date as of which such information is stated or
certified.

          SECTION
3.14. Environmental Matters.

          (a) Except
for the matters disclosed in Schedule 3.14, neither the Company nor any
Subsidiary is subject to, or knows any basis for, any Environmental Liability
which could have or cause a Material Adverse Effect and neither the Company nor
any Subsidiary has been designated as a potentially responsible party under
CERCLA or under any state statute similar to CERCLA. To the best knowledge of
the Company, except for the matters disclosed in Schedule 3.14, none of the
Properties has been identified on any current or proposed (i) National
Priorities List under 40 C.F.R. § 300, (ii) CERCLIS list or (iii) any list
arising from a state statute similar to CERCLA.

          (b) Except
for the matters disclosed in Schedule 3.14, no Hazardous Materials have been or
are being used, produced, manufactured, processed, treated, recycled,
generated, stored, disposed of, 

43

managed or
otherwise handled at, or shipped or transported to or from the Properties or
are otherwise present at, on, in or under the Properties, or, to the best of
the knowledge of the Company, at or from any adjacent site or facility, except
for Hazardous Materials used or otherwise handled, to the best knowledge of the
Company, in the ordinary course of business in compliance with all applicable
Environmental Requirements, except where the failure to comply would not have
or cause a Material Adverse Effect.

          (c) Except
for the matters disclosed in Schedule 3.14, the Company, and each of its
Affiliates, has procured all Environmental Authorizations necessary for the
conduct of its business, and, to the best knowledge of the Company, is in
compliance with all Environmental Requirements, Environmental Authorizations
and Environmental Judgments and Orders in connection with the operation of the
Properties and the Company’s, and its Affiliate’s, businesses, except where the
failure to comply could not have or cause a Material Adverse Effect.

          SECTION
3.15. Equity Interests. All Equity Interests, debentures, bonds,
notes and all other securities of the Company and its Subsidiaries presently
issued and outstanding are validly and properly issued. All outstanding
securities (whether debt or equity) of the Company and its Subsidiaries were
registered under the federal and any applicable state securities laws or were
issued in transactions which were exempt from registration under such laws; provided,
that as to any Subsidiary acquired but not created by the Company, the
foregoing representation is made to the best of the Company’s knowledge. The
issued Equity Interests of the Company’s Wholly Owned Subsidiaries are owned by
the Company free and clear of any Lien or adverse claim. At least a majority of
the issued Equity Interests of each of the other Subsidiaries (other than
Wholly Owned Subsidiaries) is owned by the Company, and all such Equity
Interests owned by the Company are free and clear of any Lien or adverse claim.

          SECTION
3.16. Margin Stock. Neither the Company nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of purchasing or carrying any Margin Stock, and no part of the proceeds of any
Revolving Loan will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock, or
be used for any purpose which violates, or which is inconsistent with, the
provisions of Regulations T, U or X.

          SECTION
3.17. Insolvency. After giving effect to the execution and delivery
of the Loan Documents and the making of the Revolving Loans under this
Agreement, no Borrower or Subsidiary Guarantor will be “insolvent,” within the
meaning of such term as defined in Section 101 of Title 11 of the United States
Code or Section 2 of the Uniform Fraudulent Transfer Act, or any other
applicable state law pertaining to fraudulent transfers, as each may be amended
from time to time, or be unable to pay its debts generally as such debts become
due, or have an unreasonably small capital to engage in any business or
transaction, whether current or contemplated. 

ARTICLE
IV

Conditions

          SECTION
4.01. Effective Date. The obligations of the Lenders to make
Revolving Loans and of the Issuing Banks to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02):

          (a) The
Administrative Agent (or its counsel) shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent (which
may include facsimile or other electronic image scan 

44

transmission
of a signed signature page of this Agreement) that such party has signed a
counterpart of this Agreement.

          (b) The
Administrative Agent shall have received the favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of Lindquist & Vennum, PLLP, special counsel for the Borrowers and
the Subsidiary Guarantors, substantially in the form of Exhibit C and covering
such other matters relating to the Borrowers, the Subsidiary Guarantors, this
Agreement, the other Loan Documents or the Transactions as the Administrative
Agent or the Required Lenders shall reasonably request. The Borrowers hereby
request such counsel to deliver such opinion.

          (c) The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each of the Borrowers and the
Subsidiary Guarantors, the authorization of the Transactions and any other
legal matters relating to the Borrowers, the Subsidiary Guarantors, this
Agreement, the other Loan Documents or the Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.

          (d) The
Administrative Agent shall have received a certificate dated as of the
Effective Date and signed by a principal financial officer of the Company, as
to the satisfaction on the Effective Date of the conditions set forth in
clauses (a) and (b) of Section 4.02, provided that for purposes of this
Section 4.01(d) and the certificate to be delivered hereunder the exclusion of
the representations and warranties set forth in Sections 3.04(b), 3.05 and 3.14
contained in Section 4.02(a) shall not apply.

          (e) The
Guarantee Agreement shall have been duly executed by the parties thereto, shall
have been delivered to the Administrative Agent and shall be in full force and
effect.

          (f) The
Indemnity, Subrogation and Contribution Agreement shall have been duly executed
by the parties thereto, shall have been delivered to the Administrative Agent
and shall be in full force and effect.

          (g) All
loans outstanding under the Existing Credit Agreements shall have been repaid,
together with all interest, fees and other amounts accrued thereunder, and the
commitments under the Existing Credit Agreements shall have been terminated.

          (h) The
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses (including fees, charges
and disbursements of counsel) required to be reimbursed or paid by the Company
or any Subsidiary hereunder or under any other Loan Document.

          (i) The
Lenders shall have received the balance of all upfront fees agreed to by the
Company and the Administrative Agent and required to be paid by the Company.

          (j) After
giving effect to the Effective Date and the initial extensions of credit made
thereon, the aggregate unutilized Revolving Commitments shall not be less than
$100,000,000.

          (k) The
Administrative Agent shall have received such documentation and information as
is reasonably requested about the Borrowers and the Subsidiary Guarantors in respect
of applicable “know your customer” and anti-money laundering rules and
regulations, including without limitation the USA PATRIOT Act.

45

The
Administrative Agent shall notify the Company and the Lenders of the Effective
Date, and such notice shall be conclusive and binding. Notwithstanding the
foregoing, the obligations of the Lenders to make Revolving Loans and of the
Issuing Banks to issue Letters of Credit hereunder shall not become effective
unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.02) on or prior to July 30, 2009 (and, in the event such
conditions are not so satisfied or waived, the Revolving Commitments shall
terminate at such time).

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

          (a) The
representations and warranties of the Borrowers set forth in this Agreement
(other than those set forth in Sections 3.04(b), 3.04(c), 3.05 and 3.14) shall
be true and correct on and as of the date of such Borrowing or the date of such
issuance, amendment, renewal or extension of a Letter of Credit, as applicable.

          (b) At
the time of and immediately after giving effect to such Borrowing or such
issuance, amendment, renewal or extension of a Letter of Credit, no Default
shall have occurred and be continuing.

          (c) With
respect to each requesting Borrower that is a Foreign Subsidiary, each Lender
shall have submitted the completed and executed documentation and had accepted
by the relevant Governmental Authority such documentation necessary for it be
exempt from, or eligible for a reduction in, withholding tax under the laws of
the jurisdiction in which such Borrower is located.

Each Borrowing
and each issuance, amendment, renewal or extension of a Letter of Credit shall
be deemed to constitute a representation and warranty by the Borrowers on the
date thereof as to the matters specified in paragraphs (a) and (b) of
this Section. Each Lender agrees, at the request of any Borrower, to promptly
complete and execute all documentation specified in paragraph (c) of this
Section.

          SECTION
4.03. Initial Borrowing by each Borrowing Subsidiary. The
obligation of each Lender to make Revolving Loans and of the Issuing Banks to
issue Letters of Credit to any Borrowing Subsidiary (other than the Borrowing
Subsidiaries party hereto on the date hereof) is subject to the satisfaction of
the following conditions:

          (a) The
Administrative Agent (or its counsel) shall have received such Borrowing
Subsidiary’s Borrowing Subsidiary Agreement, duly executed by all parties
thereto.

          (b) The
Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of such Borrowing Subsidiary, the
authorization of the Transactions insofar as they relate to such Borrowing
Subsidiary and any other legal matters relating to such Borrowing Subsidiary,
its Borrowing Subsidiary Agreement or such Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.

ARTICLE
V

Covenants

          Until
the Revolving Commitments have expired or been terminated and the principal of
and interest on each Revolving Loan and all fees and other amounts payable
hereunder shall have been paid in 

46

full and all
Letters of Credit shall have expired or terminated and all
LC Disbursements shall have been reimbursed, the Company covenants and
agrees with the Lenders that:

          SECTION
5.01. Information. The Company will deliver to each of the Lenders:

          (a) as
soon as available and in any event within 90 days after the end of each Fiscal
Year, a consolidated balance sheet of the Company and its Consolidated
Subsidiaries as of the end of such Fiscal Year and the related consolidated
statements of income, shareholders’ equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all certified by Ernst & Young LLP or other independent public
accountants of nationally recognized standing, with such certification to be
free of exceptions and qualifications not acceptable to the Required Lenders; 

          (b) as
soon as available and in any event within 45 days after the end of each of the
first three Fiscal Quarters of each Fiscal Year, a consolidated balance sheet
of the Company and its Consolidated Subsidiaries as of the end of such Fiscal
Quarter and the related statements of income and cash flows for such Fiscal
Quarter and for the portion of the Fiscal Year ended at the end of such Fiscal
Quarter, setting forth in each case in comparative form the figures for the
corresponding Fiscal Quarter and the corresponding portion of the previous
Fiscal Year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, GAAP and consistency by the chief financial officer,
the treasurer or the chief accounting officer of the Company; 

          (c) simultaneously
with the delivery of each set of financial statements referred to in clauses
(a) and (b) above, a certificate of the chief financial officer, the treasurer
or the chief accounting officer of the Company substantially in the form of
Exhibit E (a “Compliance Certificate”) (i) setting forth in reasonable
detail the calculations required to establish whether the Company was in
compliance with the requirements of Sections 5.03, 5.04, 5.06, 5.08, 5.11(d)
and 5.21 on the date of such financial statements, (ii) stating whether any
Default exists on the date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the Company is taking or
proposes to take with respect thereto, (iii) containing the certification
required by Section 5.01(b), and (iv) listing any new Subsidiaries not listed
on Schedule 3.08 or in any prior Compliance Certificate;

          (d) simultaneously
with the delivery of each set of annual financial statements referred to in
clause (a) above, a statement of the firm of independent public accountants
which reported on such statements to the effect that nothing has come to their
attention to cause them to believe that any Default under any of Sections 5.03,
5.04 and 5.11(d) existed on the date of such financial statements;

          (e) within
five Domestic Business Days after the chief executive officer, chief operating
officer, chief financial officer, chief accounting officer or treasurer of the
Company becomes aware of the occurrence of any Default, a certificate of the
chief financial officer, treasurer or the chief accounting officer of the
Company setting forth the details thereof and the action which the Company is
taking or proposes to take with respect thereto;

          (f) promptly
upon the mailing thereof to the shareholders of the Company generally, copies
of all financial statements, reports and proxy statements so mailed;

          (g) promptly
upon the filing thereof, copies of all registration statements (other than the
exhibits thereto and any registration statements on Form S-8 or its equivalent)
and annual, quarterly or monthly reports which the Company shall have filed
with the Securities and Exchange Commission;

47

          (h) if
and when the Company or any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any “reportable event” (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii)
receives notice from the PBGC under Title IV of ERISA of an intent to terminate
or appoint a trustee to administer any Plan, a copy of such notice;

          (i) promptly
after the Company knows of the commencement thereof, notice of any litigation
or other legal proceeding involving a claim against the Company and/or any
Subsidiary for US$10,000,000 or more in excess of amounts covered in full by
applicable insurance; 

          (j) promptly
upon receipt thereof, copies of any “management letter” submitted to the
Company by its certified public accountants in connection with each annual,
interim or special audit, and promptly upon completion thereof, any response
reports from the Company in respect thereof; and

          (k) from
time to time such additional information regarding the financial position or
business of the Company and its Subsidiaries as the Administrative Agent, at
the request of any Lender, may reasonably request.

          Documents
required to be delivered pursuant to this Sections 5.01(a), (b) and (c) may be
delivered electronically and, if so delivered, shall be deemed to have been
delivered on the date on which such documents are posted on the Company’s
behalf on IntraLinks, SyndTrak or another similar website, if any, to which
each of the Administrative Agent and each Lender has access. The Administrative
Agent shall have no obligation to request the delivery of, or to maintain
copies of, the documents referred to in the immediately preceding sentence or
to monitor compliance by the Company with any such request for delivery, and
each Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.

          SECTION
5.02. Inspection of Property, Books and Records. The Company will
(i) keep, and will cause each Subsidiary to keep, proper books of record
and account in which full, true and correct entries in conformity with GAAP
shall be made of all dealings and transactions in relation to its business and
activities; and (ii) permit, and will cause each Subsidiary to permit, representatives
of any Lender at such Lender’s expense prior to the occurrence of an Event of
Default and at the Company’s expense after the occurrence of an Event of
Default to visit and inspect any of their respective properties, to examine and
make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants. The Company agrees to cooperate
and assist in such visits and inspections, in each case at such reasonable
times and as often as may reasonably be desired.

          SECTION
5.03. Ratio of Consolidated Debt to Consolidated EBITDA. The ratio
of Consolidated Debt at any date to Consolidated EBITDA for the period of four
consecutive Fiscal Quarters ended on or most recently prior to such date will
not exceed the ratio of 3.50 to 1.00.

          SECTION
5.04. Interest Coverage Ratio. The ratio of Consolidated EBITDA for
the period of four consecutive Fiscal Quarters ended on or most recently prior
to any date of determination to Consolidated Interest Expense at such date will
not be less than the ratio of 4.00 to 1.00.

48

          SECTION
5.05. Restricted Payments. The Company will not declare or make any
Restricted Payment during any Fiscal Year, except for stock repurchases and
dividends approved by the Board of Directors of the Company.

          SECTION
5.06. Loans or Advances. Neither the Company nor any of its
Subsidiaries shall make loans or advances to any Person except: (i) loans
or advances to employees not exceeding US$10,000,000 in the aggregate at any
time outstanding made in the ordinary course of business; (ii) deposits
required by government agencies or public utilities; (iii) loans or
advances to any Borrower or Subsidiary Guarantor; (iv) Prepaid Rebates;
and (v) loans, advances or deposits other than those permitted by clauses
(i) through (iv) of this Section not exceeding 10% of Consolidated Total Assets
in the aggregate at any time outstanding, provided that after giving
effect to the making of any loans, advances or deposits permitted by clause
(i), (ii), (iii), (iv) or (v) of this Section, no Default shall have occurred
and be continuing.

          SECTION
5.07. Acquisitions. Neither the Company nor any of its Subsidiaries
shall make any Acquisitions, provided, that Permitted Acquisitions may
be made if, after giving effect thereto, no Default or Event of Default would
be caused thereby (giving effect to such Permitted Acquisitions on a pro forma
basis as to financial covenants as if they had occurred on each relevant date
or at the beginning of each relevant period).

          SECTION
5.08. Negative Pledge. Neither the Company nor any Consolidated
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:

          (a) Liens
existing on the date of this Agreement securing Debt outstanding on the date of
this Agreement in an aggregate principal amount not exceeding US$10,000,000;

          (b) any
Lien existing on any asset of any Person at the time such Person becomes a
Consolidated Subsidiary and not created in contemplation of such event;

          (c) any
Lien on any asset (other than Equity Interests or inventory) securing Debt
incurred or assumed for the purpose of financing all or any part of the cost of
acquiring or constructing such asset, provided that such Lien attaches
to such asset concurrently with or within 18 months after the acquisition or
completion of construction thereof;

          (d) any
Lien on any asset of any Person existing at the time such Person is merged or
consolidated with or into the Company or a Consolidated Subsidiary and not
created in contemplation of such event;

          (e) any
Lien existing on any asset prior to the acquisition thereof by the Company or a
Consolidated Subsidiary and not created in contemplation of such acquisition;

          (f) Liens
securing Debt owing by any Subsidiary to any Borrower or Subsidiary Guarantor;

          (g) any
Lien arising out of the refinancing, extension, renewal or refunding of any
Debt secured by any Lien permitted by any of the foregoing clauses of this
Section, provided that (i) such Debt is not secured by any additional assets,
and (ii) the amount of such Debt secured by any such Lien is not increased;

          (h) Liens
incidental to the conduct of its business or the ownership of its assets which
(i) do not secure Debt and (ii) do not in the aggregate materially
detract from the value of its assets or materially impair the use thereof in
the operation of its business;

49

          (i) any
Lien on Excess Margin Stock; 

          (j) any
Lien incurred with respect to Securitization Debt permitted under Section 5.21;
and

          (k) Liens
not otherwise permitted by the foregoing clauses of this Section securing Debt
(other than Revolving Loans) in an aggregate principal amount at any time
outstanding which, together with the amount of Debt secured by Liens permitted
by the foregoing paragraphs (a) through (i), does not exceed 10% of
Consolidated Total Assets.

          SECTION
5.09. Maintenance of Existence. The Company shall, and shall cause
each Subsidiary Guarantor and each other Borrower to, maintain its corporate
existence and carry on its business in substantially the same manner and in
substantially the same fields in which such business is now carried on, except
as permitted by Section 5.11.

          SECTION
5.10. Dissolution. None of the Company, any Subsidiary Guarantor or
any other Borrower shall suffer or permit dissolution or liquidation either in
whole or in part or redeem or retire any of its Equity Interests or that of any
Subsidiary that is a Borrower or Subsidiary Guarantor, except (i) through a
corporate reorganization permitted by Section 5.11 or (ii) Restricted Payments
permitted by Section 5.05.

          SECTION
5.11. Consolidations, Mergers and Sales of Assets. The Company will
not, nor will it permit any Material Subsidiary to, consolidate or merge with
or into, or sell, lease or otherwise transfer all or any substantial part of
its assets (other than Excess Margin Stock) to, any other Person, or
discontinue or eliminate any business line or segment, provided that
(a) the Company may merge with another Person if (i) such Person was
organized under the laws of the United States of America or one of its states,
(ii) the Company is the corporation surviving such merger and
(iii) immediately after giving effect to such merger, no Default shall
have occurred and be continuing, (b) Material Subsidiaries may merge with
one another, or with and into the Company where the Company is the Person
surviving such merger, (c) Borrowers which are both Domestic Subsidiaries
and Subsidiary Guarantors may transfer assets among themselves, (d) the
foregoing limitation on the sale, lease or other transfer of assets and on the
discontinuation or elimination of a business line or segment shall not apply to
loans or advances permitted by Section 5.06 or prohibit, during any Fiscal
Quarter, transfers of assets or the discontinuance or elimination of a business
line or segment (in a single transaction or in a series of related
transactions) unless the aggregate assets to be so transferred or utilized in a
business line or segment to be so discontinued, when combined with all other
assets transferred (other than inventory and obsolete or surplus property sold
in the ordinary course of business), and all other assets utilized in all other
business lines or segments discontinued, during such Fiscal Quarter and the
immediately preceding three Fiscal Quarters contributed more than 20% of
Consolidated Operating Profits during the four consecutive Fiscal Quarters
immediately preceding such Fiscal Quarter and (e) the Company and any
Subsidiary Guarantor may sell inventory and obsolete or surplus property in the
ordinary course of business.

          SECTION
5.12. Use of Proceeds. The proceeds of the Revolving Loans will be
used only for the purposes referred to in the preamble to this Agreement. No
portion of the proceeds of the Revolving Loans will be used by the Company or
any Subsidiary (i) directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any Margin Stock
in a violation of Regulation U, or (ii) for any purpose in violation of
any other applicable law or regulation.

          SECTION
5.13. Compliance with Laws; Payment of Taxes.

          (a) The
Company will, and will cause each of its Subsidiaries and each member of the
Controlled Group to, comply with applicable laws (including but not limited to
ERISA and 

50

Environmental
Requirements), regulations and similar requirements of Governmental Authorities
(including but not limited to PBGC), except where the necessity of such
compliance is being contested in good faith through appropriate proceedings
diligently pursued. The Company will, and will cause each of its Subsidiaries
to, pay promptly when due all taxes, assessments, governmental charges, claims
for labor, supplies, rent and other obligations which, if unpaid, might become
a Lien against the property of the Company or any Subsidiary, except
liabilities being contested in good faith by appropriate proceedings diligently
pursued and against which the Company shall have set up reserves in accordance
with GAAP.

          (b) The
Company shall not permit the aggregate complete or partial withdrawal liability
under Title IV of ERISA with respect to Multiemployer Plans incurred by the
Company and members of the Controlled Group to exceed US$10,000,000 at any
time. For purposes of this Section 5.13(b), the amount of withdrawal liability
of the Company and members of the Controlled Group at any date shall be the
aggregate present value of the amount claimed to have been incurred less any
portion thereof which the Company and members of the Controlled Group have paid
or as to which the Company reasonably believes, after appropriate consideration
of possible adjustments arising under Sections 4219 and 4221 of ERISA, it and
members of the Controlled Group will have no liability.

          SECTION
5.14. Insurance. The Company will maintain, and will cause each of
its Subsidiaries to maintain (either in the name of the Company or in such
Subsidiary’s own name), with financially sound and reputable insurance
companies, insurance on all its Property in at least such amounts and against
at least such risks as are usually insured against in the same general area by
companies of established repute engaged in the same or similar business.

          SECTION
5.15. Change in Fiscal Year. The Company will not change its Fiscal
Year without the consent of the Required Lenders.

          SECTION
5.16. Maintenance of Property. The Company shall, and shall cause
each Subsidiary to, maintain all of its material properties and assets in good
condition, repair and working order, ordinary wear and tear excepted.

          SECTION
5.17. Environmental Notices. The Company shall furnish to the
Lenders and the Administrative Agent prompt written notice of any Environmental
Liabilities, Environmental Notices and Environmental Judgments and Orders, and
of any pending, threatened or anticipated Environmental Proceedings, that
relate to the Company, any of its Subsidiaries or the Properties and that could
reasonably be expected to have or cause a Material Adverse Effect.

          SECTION
5.18. Environmental Matters. The Company shall conduct, and cause
each of its Subsidiaries to conduct, its operations and keep and maintain its
Properties in compliance with all Environmental Requirements, except where the
failure to so comply could not, individually or in the aggregate, reasonably be
expected to have or cause a Material Adverse Effect.

          SECTION
5.19. [Reserved]. 

          SECTION
5.20. Transactions with Affiliates. Neither the Company nor any of
its Subsidiaries shall enter into, or be a party to, any material transaction
with any Affiliate of the Company or such Subsidiary (which Affiliate is not a
Borrower or a Subsidiary Guarantor), except as permitted by law and in the
ordinary course of business and pursuant to reasonable terms no less favorable
to the Company or such Subsidiary than would be obtained in a comparable arm’s
length transaction with a Person which is not an Affiliate.

51

          SECTION
5.21. Limitation on Subsidiary Debt. The Company shall not permit
the outstanding principal amount of Debt of the Subsidiaries (other than (i)
Debt owed to any Borrower or Subsidiary Guarantor, (ii) $250,000,000 in
Securitization Debt and (ii) Debt owed under this Agreement or any other Loan
Document) at any time to exceed, in the aggregate, 10% of Consolidated Total
Assets. 

          SECTION
5.22. Subsidiary Guarantors.

          (a) The
Company shall cause each Domestic Material Subsidiary that is not already a
Subsidiary Guarantor to become a party to, and agree to be bound by the terms
of, the Guarantee Agreement and the Indemnity, Subrogation and Contribution
Agreement pursuant to an instrument in form and substance satisfactory to the
Administrative Agent executed and delivered to the Administrative Agent by such
Domestic Material Subsidiary as promptly as practicable and in any event within
20 Domestic Business Days after the day on which it becomes a Domestic Material
Subsidiary or such later date reasonably acceptable to the Administrative
Agent. The Company shall also cause the items specified in Sections 4.01(b) and
(c) to be delivered to the Administrative Agent concurrently with the
instrument referred to above, modified appropriately to refer to such
instrument and such Domestic Material Subsidiary.

          (b) Once
any Subsidiary becomes a Domestic Material Subsidiary and a party to the
Guarantee Agreement and the Indemnity, Subrogation and Contribution Agreement,
such Subsidiary thereafter shall remain a party to and a guarantor under the
Guarantee Agreement and the Indemnity, Subrogation and Contribution Agreement
without regard to the amount of its Total Assets on any day or Operating
Profits for any period.

ARTICLE
VI

Events of Default

          SECTION
6.01. Events of Default. If one or more of the following events (“Events
of Default”) shall have occurred and be continuing:

          (a) any
Borrower shall fail to pay when due any principal of any Revolving Loan or any
reimbursement obligation in respect of any LC Disbursement or shall fail
to pay any interest on any Revolving Loan within five Domestic Business Days
after such interest shall become due, or shall fail to pay any fee or other
Obligation (other than any Obligation under a Hedge Agreement to which any
Borrower and any Hedge Party are parties) payable hereunder within five
Domestic Business Days after such fee or other Obligation becomes due; or

          (b) the
Company shall fail to observe or perform any covenant contained in Section
5.01(e), 5.02(ii), 5.03, 5.04, 5.08, 5.09, 5.10 or 5.11; or 

          (c) any
Borrower shall fail to observe or perform any covenant or agreement contained
or incorporated by reference in this Agreement (other than those covered by
clause (a) or (b) above) or any other Loan Document for thirty days after the earlier
of (i) the first day on which the Company has knowledge of such failure or (ii)
written notice thereof has been given to the Company by the Administrative
Agent at the request of any Lender; or

          (d) any
representation, warranty, certification or statement made or deemed made by the
Company in Article III of this Agreement, or by any Subsidiary Guarantor in
Section 8 of the Guarantee Agreement, or by the Company or any other Borrower
in any certificate, financial statement or other 

52

document
delivered pursuant to this Agreement or any Loan Document shall prove to have
been incorrect or misleading in any material respect when made (or deemed
made); or

          (e) the
Company or any Subsidiary shall fail to make any payment in respect of Debt
outstanding in an aggregate principal amount in excess of US$10,000,000 (other
than the Revolving Loans) when due or within any applicable grace period; or

          (f) any
event or condition shall occur which results in the acceleration of the maturity
of Debt of the Company or any Subsidiary in an aggregate principal amount in
excess of US$10,000,000 or the mandatory prepayment, redemption, defeasance or
purchase of such Debt by the Company (or its designee) or such Subsidiary (or
its designee) prior to the scheduled maturity thereof, or enables (or, with the
giving of notice or lapse of time or both, would enable) the holders of such
Debt or any Person acting on such holders’ behalf to accelerate the maturity
thereof or require the mandatory prepayment, redemption, defeasance or purchase
thereof prior to the scheduled maturity thereof, without regard to whether such
holders or other Person shall have exercised or waived their right to do so; or

          (g) the
Company or any Material Subsidiary shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally, or shall admit in writing its
inability, to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing; or

          (h) an
involuntary case or other proceeding shall be commenced against the Company or
any Material Subsidiary seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Company or any Material Subsidiary under
the federal bankruptcy laws as now or hereafter in effect; or

          (i) the
Company or any member of the Controlled Group shall fail to pay when due any
material amount which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans
shall be filed under Title IV of ERISA by the Company, any member of the Controlled
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any such Plan or Plans or a proceeding
shall be instituted by a fiduciary of any such Plan or Plans to enforce Section
515 or 4219(c)(5) of ERISA and such proceeding shall not have been dismissed
within 30 days thereafter; or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any such Plan or
Plans must be terminated; or

          (j) one
or more judgments or orders for the payment of money in an aggregate amount in
excess of US$10,000,000 shall be rendered against the Company or any Subsidiary
and the Company or such Subsidiary shall not discharge the same in accordance
with its terms or procure a stay of execution thereof within 30 days from the
date of entry thereof, and within such period of 30 days, or such longer period
during which execution of such judgment shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal; or

53

          (k) a
federal tax lien shall be filed against the Company or any Subsidiary under
Section 6323 of the Code or a lien of the PBGC shall be filed against the
Company or any Subsidiary under Section 4068 of ERISA and in either case such
lien shall remain undischarged for a period of 25 days after the date of
filing; or

          (l) (i) any
Person or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 30% or more of the
outstanding shares of the voting stock of the Company; or (ii) as of any
date a majority of the Board of Directors of the Company shall consist of
individuals who were not either (A) directors of the Company as of the
corresponding date of the previous year, (B) selected or nominated to
become directors by the Board of Directors of the Company of which a majority
consisted of individuals described in clause (A), or (C) selected or
nominated to become directors by the Board of Directors of the Company of which
a majority consisted of individuals described in clause (A) or individuals
described in clause (B); or

          (m) any
provision of the Guarantee Agreement shall for any reason cease to be valid and
binding on any Subsidiary Guarantor, or any Subsidiary Guarantor (or any Person
acting on behalf of any Subsidiary Guarantor) shall deny or disaffirm its
obligations under the Guarantee Agreement; or

          (n) the
Guarantee of the Company set forth in Article VIII shall cease at any time to
be in full force and effect, or the Company shall so assert in writing, or the
Company shall disaffirm or deny any of its Obligations hereunder in writing.

then, and in
every such event, the Administrative Agent shall, if requested by the Required
Lenders, by notice to the Company, take any or all of the following actions, at
the same or different times: (i) terminate the Revolving Commitments and they
shall thereupon terminate, (ii) declare the Revolving Loans (together with
accrued interest thereon) and all other Obligations payable hereunder and under
the other Loan Documents (but excluding any amounts owing under any Hedge
Agreement to which any Borrower and any Hedge Party are parties) to be, and the
Revolving Loans (together with all accrued interest thereon) and all other
amounts payable hereunder and under the other Loan Documents shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrowers, and
(iii) direct the Borrowers to deposit (and the Borrowers hereby agree, forthwith
upon receipt of notice of such direction from the Administrative Agent, to
deposit) with the Administrative Agent from time to time such additional amount
of cash as is equal to the LC Exposure then outstanding, such amount to be held
by the Administrative Agent in the Cash Collateral Account as security for the
LC Exposure as described in Section 2.05(j); provided that if any Event
of Default specified in clause (g) or (h) above occurs with respect to any
Borrower, without any notice to any Borrower or any other act by the
Administrative Agent or the Lenders, the Revolving Commitments shall thereupon
automatically terminate, the Revolving Loans (together with accrued interest
thereon) and all other amounts payable hereunder and under the other Loan Documents
shall automatically become immediately due and payable, and the Administrative
Agent shall be deemed to have made a demand for cash collateral to the full
extent permitted under Section 2.05(j) without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrowers.
Notwithstanding the foregoing, the Administrative Agent shall have available to
it all other remedies at law or equity, and shall exercise any one or all of
them at the request of the Required Lenders.

          SECTION
6.02. Notice of Default. The Administrative Agent shall give notice
to the Company of any Default under Section 6.01(c) promptly upon being
requested to do so by any Lender and shall thereupon notify all the Lenders
thereof.

54

ARTICLE
VII

The Administrative
Agent

          SECTION
7.01. Appointment and Authority. Each of the Lenders (for purposes of
this Article, references to the Lenders shall also mean the Issuing Banks)
hereby irrevocably appoints Wells Fargo to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. Except as set forth in Section 7.06, the provisions of
this Article are solely for the benefit of the Administrative Agent and the
Lenders, and no Borrower shall have
any rights as a third party beneficiary of any of such provisions.

          SECTION
7.02. Rights as a Lender. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the
Person serving as the Administrative Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money
to, act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of business with any Borrower or any Subsidiary or
other Affiliate thereof as if such Person were not the Administrative Agent
hereunder and without any duty to account therefor to the Lenders.

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

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

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

          (c)
shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure
to disclose, any information relating to the Borrowers 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 not be liable for any action taken or not taken by
it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 9.02and 6.01) or (ii) in the
absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default or Event of Default
unless and until notice describing such Default or Event of Default is given to
the Administrative Agent by a Borrower or a Lender.

55

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

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

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

          SECTION
7.06. Resignation of Administrative Agent. The Administrative Agent may
at any time give notice of its resignation to the Lenders and the Company. Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Company, to appoint a successor, which shall be
a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent meeting the qualifications
set forth above; provided that if the Administrative Agent shall notify
the Company and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders under any of the Loan Documents,
the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and
(2) all payments, communications and determinations provided to be made by, to
or through the Administrative Agent shall instead be made by or to each Lender
directly,

56

until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this Section. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
(or retired) Administrative Agent, and the retiring Administrative Agent shall
be discharged from all of its duties and obligations hereunder or under the
other Loan Documents (if not already discharged therefrom as provided above in
this Section). The fees payable by the Borrowers to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrowers and such successor. After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 9.03 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub-agents
and their respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while the retiring Administrative Agent was acting
as Administrative Agent.

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

          SECTION
7.08. No Other Duties, Etc. Anything herein to the contrary
notwithstanding, none of the Arrangers, syndication agent or other agents
listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Loan Documents,
except in its capacity, as applicable, as the Administrative Agent or a Lender
hereunder.

          SECTION
7.09. Guaranty Matters.

          (a)
The Administrative Agent is hereby authorized on behalf of the Lenders, without
the necessity of any notice to or further consent from the Lenders, from time
to time (but without any obligation) to take any action with respect to any
collateral that may be deemed by the Administrative Agent in its discretion to
be necessary or advisable to perfect and maintain perfected the Liens upon any
such collateral granted pursuant to any of the Loan Documents.

          (b)
The Lenders hereby authorize the Administrative Agent, at its option and in its
discretion, (i) to release any Lien granted to or held by the Administrative
Agent upon any collateral (A) upon termination of the Revolving Commitments,
termination, expiration or cash collateralization of all outstanding Letters of
Credit and payment in full of all of the Obligations then due and payable, (B)
constituting property sold or to be sold or disposed of as part of or in
connection with any disposition expressly permitted hereunder or under any
other Loan Document or to which the Required Lenders have consented in writing
or (C) otherwise pursuant to and in accordance with the provisions of any
applicable Loan Document, and (ii) to release any Subsidiary Guarantor from its
obligations under the Guarantee Agreement if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder. Upon request by
the Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent’s authority to release any Guarantor from its obligations
under the Guarantee Agreement, pursuant to this Section 7.9(b).

57

          SECTION
7.10. Issuing Bank. The provisions of this Article VII (other than
Section 7.02) shall apply to the Issuing Banks mutatis mutandis to the same
extent as such provisions apply to the Administrative Agent.

ARTICLE
VIII

Guarantee

          In
order to induce the Lenders to extend credit to the Borrowing Subsidiaries
hereunder and to induce the Issuing Banks to issue Letters of Credit hereunder,
the Company hereby irrevocably and unconditionally guarantees, as a primary
obligor and not merely as a surety, the Obligations of the Borrowing
Subsidiaries. The Company further agrees that the due and punctual payment of
the Obligations of the Borrowing Subsidiaries may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee hereunder notwithstanding any such extension or
renewal of any Obligation.

          The
Company waives presentment to, demand of payment from and protest to any
Borrowing Subsidiary of any of the Obligations, and also waives notice of
acceptance of its obligations and notice of protest for nonpayment. The
obligations of the Company hereunder shall not be affected by and the Company
hereby waives any defense that it may now or hereafter have arising out of the
following: (a) the failure of any Lender or any Issuing Bank, as the case
may be, to assert any claim or demand or to enforce any right or remedy against
any Borrowing Subsidiary under the provisions of this Agreement, any other Loan
Document or otherwise; (b) any extension or renewal of any of the
Obligations; (c) any rescission, waiver, amendment or modification of, or
release from, any of the terms or provisions of this Agreement, any Borrowing
Subsidiary Agreement or any other Loan Document or agreement; (d) the
failure or delay of any Lender or any Issuing Bank, as the case may be, to exercise
any right or remedy against any other guarantor of the Obligations;
(e) the failure of any Lender or any Issuing Bank, as the case may be, to
assert any claim or demand or to enforce any remedy under any Loan Document or
any other agreement or instrument; (f) any default, failure or delay,
willful or otherwise, in the performance of the Obligations; or (g) any
other act, omission or delay to do any other act which may or might in any
manner or to any extent vary the risk of the Company or otherwise operate as a
discharge of the Company as a matter of law or equity or which would impair or
eliminate any right of the Company to subrogation.

          The
Company further agrees that its guarantee hereunder constitutes a promise of
payment when due (whether or not any bankruptcy or similar proceeding shall
have stayed the accrual or collection of any of the Obligations or operated as
a discharge thereof) and not merely of collection, and waives any right to
require that any resort be had by any Lender or any Issuing Bank, as the case
may be, to any balance of any deposit account or credit on the books of any
Lender or any Issuing Bank, as the case may be, in favor of any Borrower or
Subsidiary Guarantor or any other Person.

          The
obligations of the Company hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, and shall not be subject
to any defense or setoff, counterclaim, recoupment or termination whatsoever,
by reason of the invalidity, illegality or unenforceability of the Obligations,
any impossibility in the performance of the Obligations or otherwise.

          The
Company further agrees that its obligations hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Obligation is rescinded or must otherwise be restored by
any Lender or any Issuing Bank, as the case may be, upon the bankruptcy or
reorganization of any Borrower or otherwise.

58

          In
furtherance of the foregoing and not in limitation of any other right which any
Lender or any Issuing Bank may have at law or in equity against the Company by
virtue hereof, upon the failure of any Borrowing Subsidiary to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Company hereby
promises to and will, upon receipt of written demand by the Administrative
Agent, forthwith pay, or cause to be paid, to the Administrative Agent for distribution
to the Lenders or the relevant Issuing Bank in cash an amount equal the
unpaid principal amount of such Obligation. The Company further agrees that if
payment in respect of any Obligation shall be due in a currency other than US
Dollars and/or at a place of payment other than San Francisco and if, by reason
of any legal prohibition, disruption of currency or foreign exchange markets,
war or civil disturbance or other event, payment of such Obligation in such
currency or at such place of payment shall be impossible or, in the judgment of
any Lender, not consistent with the protection of its rights or interests,
then, at the election of such Lender, the Company shall make payment of such
Obligation in US Dollars (based upon the applicable Exchange Rate in effect on
the date of payment) and/or in San Francisco, and shall indemnify such Lender
or such Issuing Bank against any losses or expenses (including losses or
expenses resulting from fluctuations in exchange rates) that it shall sustain
as a result of such alternative payment.

          Upon
payment in full by the Company of any Obligation of any Borrowing Subsidiary,
each Lender or each Issuing Bank shall, in a reasonable manner, assign to the
Company the amount of such Obligation owed to such Lender or such Issuing Bank
and so paid, such assignment to be pro tanto to the extent to
which the Obligation in question was discharged by the Company, or make such
disposition thereof as the Company shall direct (all without recourse to any
Lender or any Issuing Bank and without any representation or warranty by any
Lender or any Issuing Bank). Upon payment by the Company of any sums as
provided above, all rights of the Company against any Borrowing Subsidiary
arising as a result thereof by way of right of subrogation or otherwise shall
in all respects be subordinated and junior in right of payment to the prior
indefeasible payment in full of all the Obligations owed by such Borrowing
Subsidiary to the Lenders and the Issuing Banks.

ARTICLE
IX

Miscellaneous

          SECTION
9.01. Notices. 

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

	
  

 	
  

 
	
  

 	
           (i)
 if to the Company, to it at 901 3rd Avenue South, Minneapolis, MN
 55402, Attention of Tyler Treat, Treasurer, Telecopy No. (612) 486-7981;
 

 
	
  

 	
  

 
	
  

 	
           (ii)
 if to any Borrowing Subsidiary or Subsidiary Guarantor, to it in care of the
 Company as provided in paragraph (a) above;

 
	
  

 	
  

 
	
  

 	
           (iii)
 if to the Administrative Agent, to it at Wells Fargo Bank, National
 Association, 201 Third Street, 8th Floor, San Francisco, CA 94103, Attention:
 Agency Syndications Group, Telecopy No. (415) 512-9408;

 

59

	
  

 	
  

 
	
  

 	
           (iv)
 if to Wells Fargo in its capacity as an Issuing Bank, to it at Wells Fargo
 Bank, National Association, 90 S. 7th Street, Minneapolis, MN 55419, MAC
 Address: N9305-077, Attention: Ethel Phillips, Telecopy No. (612)
 667-0803; 

 
	
  

 	
  

 
	
  

 	
           (v)
 if to Wachovia Bank, National Association in its capacity as an Issuing Bank,
 to it at: Wachovia Bank, National Association, a Wells Fargo Company,
 Domestic Trade Operations, Standby Letters of Credit Center of Excellence,
 401 Linden Street, 1st Floor, Mail Code NC 6034, Winston-Salem, NC, 27101
 Telecopy No. (336) 735-0950;with a copy to: Wells Fargo Bank, National
 Association, 90 S. 7th Street, Minneapolis, MN 55419, MAC Address: N9305-077,
 Attention: Ethel Phillips, Telecopy No. (612) 667-0803; 

 
	
  

 	
  

 
	
  

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

 

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

          (b)
Notices and other communications to the Lenders 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.
The Administrative Agent or the Borrowers may, in their discretion, agree to
accept notices and other communications to it hereunder by electronic
communication pursuant to procedures approved by them, 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 to the Lenders 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 other
communications to the Lenders posted to an internet or intranet website shall
be deemed received upon the deemed receipt by the intended recipient at its
e-mail address as described in the foregoing clause (i) of notification
that such notice or communication is available and identifying the website
address therefor. 

          SECTION
9.02. Waivers; Amendments. 

          (a)
No failure or delay by the Administrative Agent, any Lender or any Issuing Bank
in exercising any right or power hereunder or under any other Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof
or the exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Lenders and the Issuing Banks hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Borrower or Subsidiary Guarantor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Revolving
Loan or issuance of a Letter of Credit shall not be construed as a waiver of
any Default, regardless of whether the Administrative Agent, any Lender or any
Issuing Bank may have had notice or knowledge of such Default at the time.

60

          (b)
Subject to Section 2.22, neither this Agreement nor any of the Loan Documents
nor any provision hereof or thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Company
and the Required Lenders or by the Company and the Administrative Agent with
the consent of the Required Lenders (and, in the case of a Borrowing Subsidiary
Agreement, the applicable Borrowing Subsidiary); provided that no such
agreement shall (i) increase the Revolving Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal
amount of any Revolving Loan or LC Disbursement or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the scheduled date of payment
of the principal amount of any Revolving Loan or LC Disbursement, or any
interest thereon, or any fees payable hereunder, or reduce the amount of, waive
or excuse any such payment, or postpone the scheduled date of expiration of any
Revolving Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.17(b) or (c) in a manner that would alter
the pro rata sharing of payments required thereby without the written consent
of each Lender, (v) change any of the provisions of this Section or the
definition of “Required Lenders” or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender, or (vi) release the
Company from its obligations under Article VIII or release any of the
Subsidiary Guarantors from their obligations under the Guarantee Agreement
without the consent of each Lender except as provided in Section 9.15; provided
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent or any Issuing Bank hereunder
without the prior written consent of the Administrative Agent or such Issuing
Bank, as the case may be.

          SECTION
9.03. Expenses; Indemnity; Damage Waiver. 

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

          (b)
The Company agrees to indemnify the Administrative Agent, each Lender and each
Issuing Bank, and each Related Party of any of the foregoing Persons (each such
Person being called an “Indemnitee”) against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement or any other Loan Document, or any agreement or
instrument contemplated hereby or thereby, the performance by the parties
hereto of their respective obligations hereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any
Revolving Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by any Issuing Bank to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter

61

of Credit) or any transaction in which such proceeds
are used, (iii) any actual or alleged presence or Environmental Release of
Hazardous Materials on or from any property currently or formerly owned or
operated by the Company or any of its Subsidiaries or Affiliates, or any
Environmental Liability related in any way to the Company or any of its
Subsidiaries or Affiliates or their respective predecessors, (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto and (v) any civil
penalty or fine assessed by OFAC against, and all reasonable costs and expenses
(including counsel fees and disbursements) incurred in connection with defense
thereof by, the Administrative Agent or any Lender as a result of conduct of
any Borrower that violates a sanction enforced by OFAC.; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are finally
determined by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

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

          (d)
To the extent permitted by applicable law, no Borrower shall assert, and each
Borrower hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby, the Transactions, any Revolving Loan or Letter of Credit
or the use of the proceeds thereof. No Indemnitee shall be liable for any
damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or
other information transmission systems (including Intralinks, SyndTrak or
similar systems) in connection with this Agreement or the other Loan Documents
or the transactions contemplated hereby or thereby.

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

          SECTION
9.04. Successors and Assigns.

          (a)
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns
(including any Affiliate of any Issuing Bank that issues any Letter of Credit),
except that no Borrower may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by any Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
any Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Lenders and the Issuing Banks) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

          (b)
Any Lender may assign by novation to one or more assignees (other than the
Company or any Subsidiary) all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Revolving Commitment and the
Revolving Loans at the time owing to it); provided that 

62

(i) the Administrative Agent, the Issuing Banks and,
except in the case of an assignment to a Lender or an Affiliate of a Lender,
the Company, must give their prior written consent to such assignment, which
consent shall not be unreasonably withheld, (ii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender’s Revolving Commitment, the
amount of the Revolving Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than US$5,000,000 unless each of the Company and the Administrative
Agent otherwise consent, (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 Agreement, (iv) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of US$3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further
that any consent of the Company otherwise required under this paragraph shall
not be required if a Default has occurred and is continuing. Subject to
acceptance and recording thereof pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 2.14, 2.15, 2.16, 2.20, 2.21 and 9.03). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes of this Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.

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

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

          (e)
Any Lender may, without the consent of any Borrower, the Administrative Agent
or any Issuing Bank, sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and
obligations under this Agreement (including all or a portion of its Revolving
Commitment and the Revolving Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers,
the Administrative Agent, the

63

other Lenders and the Issuing Banks shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver described in the first proviso to Section 9.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, each Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.14, 2.15,
2.16, 2.20 and 2.21 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to paragraph (b) of this Section. To
the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.17(c) as though it were a Lender.

          (f)
A Participant shall not be entitled to receive any greater payment under
Section 2.14, 2.15, 2.16, 2.20 or 2.21 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 Company’s prior written consent. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of
Section 2.16 unless the Company is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrowers,
to comply with Section 2.16(e) as though it were a Lender.

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

          (h)
Notwithstanding anything to the contrary contained herein, any Lender (a “Granting
Lender”) may grant to a special purpose funding vehicle (an “SPC”),
identified as such in writing from time to time by the Granting Lender to the Administrative
Agent and the Company, the option to provide to the Borrowers all or any part
of any Revolving Loan that such Granting Lender would otherwise be obligated to
make to the Borrowers pursuant to this Agreement or the option to participate
in any Letter of Credit, as the case may be; provided that
(i) nothing herein shall constitute a commitment by any SPC to make any
Revolving Loan or to participate in any Letter of Credit, (ii) nothing
herein shall relieve the Granting Lender of liability for the performance or
nonperformance by the SPC of the obligations of the Granting Lender under this
Agreement. The making of a Revolving Loan by an SPC or the participation by
such SPC in any Letter of Credit hereunder shall utilize the Revolving
Commitment of the Granting Lender to the same extent, and as if, such Revolving
Loan were made by such Granting Lender or such participation in a Letter of
Credit were paid or taken, as the case may be, by such Granting Lender. Each
party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Lender). In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States of America or any State thereof. In addition, notwithstanding anything
to the contrary contained in this Section 9.04, any SPC may (i) with notice to,
but without the prior written consent of, the Company and the Administrative
Agent and without paying any processing fee therefor, assign all or a portion
of its interests in any Revolving Loans or participations in Letters of Credit
to the Granting Lender or to any financial institution (consented to by the
Company 

64

and Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Revolving Loans and (ii) disclose on a
confidential basis any non-public information relating to its Revolving Loans
or participations in any Letters of Credit to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity enhancement
to such SPC.

          SECTION
9.05. Survival. All covenants, agreements, representations and
warranties made by the Borrowers herein or in any other Loan Document and in
the certificates or other instruments delivered in connection with or pursuant
to this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and thereto and shall survive the
execution and delivery of this Agreement and any other Loan Document and the
making of any Revolving Loans and issuance of any Letters of Credit, regardless
of any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, any Lender or any Issuing Bank
may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on
any Revolving Loan or any fee or any other amount payable under this Agreement
or any other Loan Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Revolving Commitments have not expired or
terminated. The provisions of Sections 2.14, 2.15, 2.16, 2.20, 2.21 and 9.03
and Article VII shall survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby, the repayment of the
Revolving Loans, the expiration or termination of the Revolving Commitments or
the Letters of Credit or the termination of this Agreement or any other Loan
Document or any provision hereof or thereof.

          SECTION
9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. This Agreement, the
other Loan Documents and the Fee Letter constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4.01, this Agreement
shall become effective when it shall have been executed by the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by facsimile or
other electronic imaging means shall be effective as delivery of a manually
executed counterpart of this Agreement.

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

          SECTION
9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each Issuing Bank and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Issuing Bank, such Lender or such
Affiliate to or for the credit or the account of any Borrower against any of and
all the obligations of such Borrower now or hereafter existing under this
Agreement held by such Issuing Bank or such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be contingent or unmatured or are owed to a branch or
office of such Lender or such Issuing Bank different 

65

from the branch or office
holding such deposit or owing such obligation. The rights of each Lender and
each Issuing Bank under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender and such Issuing
Bank may have.

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

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

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

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

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

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

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

66

between any Borrower and
any Hedge Party is an independent agreement governed by the writing provisions
of such Hedge Agreement, which shall remain in full force and effect,
unaffected by any repayment, prepayment, acceleration, reduction, increase or
change in the terms applicable to the Revolving Loans under this Agreement,
except as otherwise expressly provided in such Hedge Agreement, and any payoff
statement from the Administrative Agent relating to this Agreement shall not
apply to such Hedge Agreement except as expressly provided therein.

          SECTION
9.12. Confidentiality. Each of the Administrative Agent, the Issuing
Banks and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority,
(c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
any Hedge Agreement to which any Borrower and any Hedge Party are parties or
the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or obligations under this Agreement
or (ii) any actual or prospective counterparty to any swap or derivative
transaction relating to the Company and its obligations, or any advisor of any
such counterparty, (g) with the consent of the Company or (h) to the
extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the
Administrative Agent, any Lender or any Issuing Bank on a nonconfidential basis
from a source other than the Company. For the purposes of this Section, “Information”
means all information received from the Company relating to the Company or its
business, other than any such information that is available to the
Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by the Company; provided that, in the case of
information received from the Company after the date hereof, such information
is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

          SECTION
9.13. Conversion of Currencies. 

          (a)
If, for the purpose of obtaining judgment in any court, it is necessary to
convert a sum owing hereunder in one currency into another currency, each party
hereto (including any Borrowing Subsidiary) agrees, to the fullest extent that
it may effectively do so, that the rate of exchange used shall be that at which
in accordance with normal banking procedures in the relevant jurisdiction the
first currency could be purchased with such other currency on the Business Day
immediately preceding the day on which final judgment is given.

          (b)
The obligations of each Borrower in respect of any sum due to any party hereto
or any holder of the obligations owing hereunder (the “Applicable Creditor”)
shall, notwithstanding any judgment in a currency (the “Judgment Currency”)
other than the currency in which such sum is stated to be due hereunder (the “Agreement
Currency”), be discharged only to the extent that, on the Business Day following
receipt by the Applicable Creditor of any sum adjudged to be so due in the
Judgment Currency, the Applicable Creditor may in accordance with normal
banking procedures in the relevant jurisdiction 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 Applicable Creditor in the
Agreement Currency,

67

such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Applicable Creditor against
such loss. The obligations of the Borrowers contained in this Section 9.13
shall survive the termination of this Agreement and the payment of all other
amounts owing hereunder.

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

          SECTION
9.15. Release of Subsidiary Guarantors. Notwithstanding any contrary
provision herein or in any other Loan Document, if all the Equity Interests of
any Subsidiary Guarantor owned by the Company and the Subsidiaries shall be
sold to one or more Persons (other than the Company or an Affiliate of the
Company) in a transaction permitted under this Agreement, and if the Company
shall request the release of such Subsidiary Guarantor from its obligations
under the Guarantee Agreement and the Indemnity, Subrogation and Contribution
Agreement and shall deliver to the Administrative Agent a certificate to the
effect that such release will comply with the terms of this Agreement, the
Administrative Agent, if satisfied that the applicable certificate is correct,
shall, without the consent of any Lender, execute and deliver all such
instruments, releases, or other agreements, and take all such further actions,
as shall be necessary to effectuate the release of such Subsidiary Guarantor
and shall promptly notify each Lender of such release.

          SECTION
9.16. USA Patriot Act. Each Lender and each Issuing Bank hereby notifies
the Borrowers that pursuant to the requirements of the USA Patriot Act, it is
required to obtain, verify and record information that identifies the
Borrowers, which information includes the names and addresses of the Borrowers
and other information that will allow such Lender to identify the Borrowers in
accordance with its requirements. The Borrowers shall promptly following a
request by the Administrative Agent or any Lender, provide all documentation
and other information that the Administrative Agent or such Lender reasonably
requests in order to comply with its ongoing obligations under applicable “know
your customer” and anti-money laundering rules and regulations including the
USA Patriot Act.

          SECTION
9.17. No Fiduciary Relationship. The Company, on behalf of itself and
its Subsidiaries, agrees that in connection with all aspects of the
transactions contemplated hereby and any communications in connection
therewith, the Company, its Subsidiaries and their respective Affiliates, on the
one hand, and the Administrative Agent, the Lenders and their respective
Affiliates, on the other hand, will have a business relationship that does not
create, by implication or otherwise, any fiduciary duty on the part of the
Administrative Agent, any Lender or any of their respective Affiliates, and no
such duty will be deemed to have arisen in connection with any such
transactions or communications.

68

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE VALSPAR CORPORATION

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 Tyler Treat

 
	
  

 	
  

 	
  

 	
 Title:

 	
 Treasurer

 
	
  

 	
  

 
	
  

 	
 THE VALSPAR (SWITZERLAND) HOLDING CORPORATION AG

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 Tyler Treat

 
	
  

 	
  

 	
  

 	
 Title:

 	
 Authorized Signatory

 
	
  

 	
  

 
	
  

 	
 ENGINEERED POLYMER SOLUTIONS, INC.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 Tyler Treat

 
	
  

 	
  

 	
  

 	
 Title:

 	
 Authorized Signatory

 
	
  

 	
  

 
	
  

 	
 VALSPAR FINANCE CORPORATION

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 Tyler Treat

 
	
  

 	
  

 	
  

 	
 Title:

 	
 Authorized Signatory

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR COATINGS FINANCE CORPORATION 

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 Tyler Treat

 
	
  

 	
  

 	
  

 	
 Title:

 	
 Authorized Signatory

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR SOURCING, INC.

 
	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 Tyler Treat

 
	
  

 	
  

 	
  

 	
 Title:

 	
 Authorized Signatory

 

 [Signature Page to Credit Agreement]

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE VALSPAR (UK) HOLDING CORPORATION LTD.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 Tyler Treat

 
	
  

 	
  

 	
  

 	
 Title:

 	
 Authorized Signatory

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR CREDIT CORPORATION

 
	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 Tyler Treat

 
	
  

 	
  

 	
  

 	
 Title:

 	
 Authorized Signatory

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO BANK, NATIONAL ASSOCIATION, 
as
 Administrative Agent, an Issuing Bank, and a Lender

 
	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 BANK OF AMERICA, N.A., as Syndication Agent and a
 Lender,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WACHOVIA BANK, NATIONAL ASSOCIATION, as 
an Issuing
 Bank,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 DEUTSCHE BANK AG NEW YORK BRANCH, as 
Documentation
 Agent and a Lender,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as 
Documentation
 Agent and a Lender,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 GOLDMAN SACHS BANK USA, as a Lender,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 PNC BANK, NATIONAL ASSOCIATION, as a Lender,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 U.S. BANK NATIONAL ASSOCIATION, as a Lender,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 COMMONWEALTH BANK OF AUSTRALIA, as a Lender,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 COMERICA BANK, as a Lender,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

Schedule 1.01

Domestic Material Subsidiaries

Engineered
Polymer Solutions, Inc.

Valspar Finance Corporation

Valspar Coatings Finance Corporation

Valspar Sourcing, Inc.

Valspar Credit Corporation 

Schedule
2.05

Existing Letters of Credit

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Issuing Bank

 	
  

 	
 Letter of Credit No.

 	
  

 	
 Beneficiary

 	
 US$ Amount

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
   WACHOVIA
 BANK

 	
  

 	
   870-007349

 	
  

 	
  FIRST CITIZENS BANK & TRUST CO

 	
 $4,500,000

 
	
   WACHOVIA
 BANK

 	
  

 	
   870-007356

 	
  

 	
 FIRST CITIZENS BANK & TRUST CO

 	
 $8,000,000

 

	
  

 
	
 Schedule 3.08

 
	
 Existing Subsidiaries

 
	
  

 
	
 Engineered
 Polymer Solutions, Inc. (Delaware, USA)*

 
	
 Valspar
 Refinish, Inc. (Mississippi, USA)

 
	
 Valspar
 Finance Corporation (Minnesota, USA)*

 
	
 Plasti-Kote
 Co., Inc. (Ohio, USA)

 
	
 Valspar
 Coatings Finance Corporation (Minnesota, USA)*

 
	
 Valspar
 Sourcing, Inc. (Minnesota, USA)*

 
	
 Valspar
 Credit Corporation (Minnesota, USA)

 
	
 Valspar
 Industries, LLC (Indiana, USA)

 
	
 Valspar
 Holdings LLC (Minnesota, USA)

 
	
 The Valspar
 FinCo Holdings LLC (Minnesota, USA)

 
	
 Valspar Inc.
 (Ontario, Canada)

 
	
 The Valspar
 Corporation Limitada (Brazil)

 
	
 The Valspar
 (UK) FinCo Limited Partnership

 
	
 The Valspar
 (UK) Holding Corporation Limited

 
	
 The Valspar
 (UK) Corporation, Limited

 
	
 Valspar
 Industries (UK) Limited

 
	
 Anglo-Dutch Paint & Chemical Company Limited (UK)

 
	
 Plasti-Kote
 Limited (UK)

 
	
 Valspar
 Powder Coatings Limited (UK)

 
	
 Powderstore
 Limited (UK)

 
	
 Forton B.V.
 (Netherlands)

 
	
 Dyflex B.V.
 (Netherlands)

 
	
 Valspar b.v.
 (Netherlands)

 
	
 The Valspar
 (Finland) Corporation Oy

 
	
 Valspar
 Industries Europe Holdings C.V. (Netherlands)

 
	
 The Valspar
 (Nantes) Corporation, S.A.S.

 
	
 The Valspar
 (France) Corporation S.A.S.

 
	
 The Valspar
 (Switzerland) Corporation AG

 
	
 The Valspar
 (Spain) Corporation S.R.L.

 
	
 The Valspar
 (Germany) GmbH

 
	
 The Valspar
 GmbH (Austria)

 
	
 Valspar
 Industries GmbH (Germany)

 
	
 The Valspar
 (Italy) Corporation S.r.l.

 
	
 The Valspar
 (H.K.) Corporation Limited (Hong Kong)

 
	
 Valspar Hai
 Hong Company Limited (Hong Kong)

 
	
 Valspar Hai
 Hong Coatings (Shenzhen) Company Limited (PRC)

 
	
 Valspar
 (Australia) Holdings Pty Limited

 
	
 Valspar
 (Australia) Acquisition Corporation Pty Limited

 
	
 The Valspar
 (Australia) Corporation Pty Limited

 
	
 Lilly
 Industries (Australia) Pty Limited

 
	
 DeBeer
 Australasia Pty Limited (Australia)

 
	
 Fiberglass
 Material Services Pty Ltd. (Australia)

 

	
  

 
	
 Schedule 3.08—page 2

 
	
  

 
	
 The Valspar
 (New Zealand) Corporation, Ltd.

 
	
 Valspar
 (South Africa) (Pty) Limited

 
	
 The Valspar
 (South Africa) Corporation (Pty) Limited

 
	
 The Valspar
 (Mauritius) Corporation Limited

 
	
 Valspar Rock
 Company Limited (Japan)

 
	
 The Valspar
 (Thailand) Corporation Limited

 
	
 The Valspar
 (Singapore) Corporation Pte Limited 

 
	
 Valspar
 Mexicana, S.A. de C.V. (Mexico)

 
	
 Valspar
 Aries Coatings S. De R.L. De C.V. (Mexico)

 
	
 Valspar
 Servicios Administrativos S. A. De C.V. (Mexico)

 
	
 PT Valspar
 Indonesia

 
	
 Valspar
 Industries (Ireland) Ltd.

 
	
 000 Valspar
 / Valspar LLC (Russia) 

 
	
 Dongguan
 Lilly Paint Industries Ltd. (PRC)

 
	
 Lilly
 Industries (Shanghai) Ltd. (PRC)

 
	
 The Valspar
 (Malaysia) Corp. Sdn Bhd 

 
	
 Lilly
 Industries (Cebu), Inc. (Philippines)

 
	
 Valspar
 (Uruguay) Corporation S.A.

 
	
 The Valspar
 (Vietnam) Corp. Ltd.

 
	
 Spanyc
 Paints Joint Stock Company

 
	
 The Valspar
 (Tianjin) Coatings Corporation Limited (PRC)

 
	
 Valspar
 (Shanghai) Trading Co., Ltd. (PRC)

 
	
 The Valspar
 (Asia) Corporation Limited (Hong Kong)

 
	
 Valspar
 (Asia) Paints Holdings Limited (Hong Kong)

 
	
 Valspar (Asia)
 Trading Holdings Limited (Hong Kong)

 
	
 Valspar
 (Asia) Operations Holdings Limited (Hong Kong)

 
	
 Valspar
 (Asia) Industrial Holdings Limited (Hong Kong)

 
	
 Valspar Hong
 Kong Holdings Limited 

 
	
 Hua Run
 Paints Holdings Company Limited (Hong Kong)

 
	
 Hua Run Paints
 Holdings Company Limited (Hong Kong)

 
	
 Huarun
 Paints Co., Ltd. (Hong Kong)

 
	
 Da Di Paints
 (HK) Co., Ltd. (Hong Kong)

 
	
 Huarun Jie
 Xin Development Co., Ltd. (Hong Kong)

 
	
 Huarun
 Trading (China) Co., Ltd. (Hong Kong)

 
	
 Huarun
 Construction Service Co. Ltd. (Hong Kong)

 
	
 Master Hua
 Decoration Co. Ltd. (Hong Kong)

 
	
 Huarun Sales
 Service Co. Ltd. (Hong Kong)

 
	
 Huarun Chain
 Sales (Hong Kong) Co. Ltd(Hong Kong)

 
	
 Huarun Mader
 Co., Ltd. (Hong Kong)

 
	
 Guandong
 Huarun Paints Company Limited (China)

 
	
 Foshan
 Shunde Yueda Chemical Trading Company Limited(China)

 
	
 Sincel Yueda
 (Shanghai) Paints Company Limited (China)

 
	
 Shunde
 Jiexin Paints Company Limited (China)

 
	
 Guangdong
 Yuegang Dadi Paints Company Limited (China)

 

	
  

 
	
 Schedule 3.08—page 3

 
	
  

 
	
 Jinchuan
 Yueda (Beijing) Trading Company Limited (China)

 
	
 Foshan
 Shunde Huarun Project Paints Trading Co., Ltd (China)

 
	
 Valspar
 Yueda Coating (Foshan) Co., Ltd (China)

 
	
 Foshan
 Shunde Huarun Paints Mft. Company Limited (China)

 
	
 Foshan
 Shunde Master Hua Spraying Service Co. Ltd (China)

 
	
 Foshan
 Shunde Huarun Chain Sales Company Limited (China)

 
	
 Nanning
 Yuerun Trading Co., Ltd. (China)

 
	
 Shaoxing
 Lipeng Trading Co., Ltd. (China)

 
	
 Dongguan
 Huarun Paints Co., Ltd. (China)

 
	
 Foshan
 Shunde Herun Yueda Spraying Service Co., Ltd. (China)

 
	
 Tianjin
 Tiankuo Commerce & Trade Co., Ltd. (China)

 
	
 Tianjin
 Haorunjia Commerce & Trade Co., Ltd. (China)

 
	
 Qingdao
 Shunde Yueda Trading Co., Ltd. (China)

 
	
 Zhengzhou
 Xinchuan Yueda Trading Co., Ltd. (China)

 
	
 Nanjing
 Yuechuan Paints Co., Ltd. (China)

 
	
 Lanzhou
 Xinchuan Yueda Commerce & Trade Co., Ltd. (China)

 
	
 Jinan
 Jinchuan Yueda Trading Co., Ltd. (China)

 
	
 Herun Yueda
 (Luoyang) Trading Co., Ltd. (China)

 
	
 Dongguan
 Yuerun Yueda Trading Co., Ltd. (China)

 
	
 Wuxi
 Yuechuan Trading Co., Ltd. (China)

 
	
 Foshan
 Chanyue Trading Co., Ltd. (China)

 
	
 Jiangxi
 Yuehong Chemical Co., Ltd. (China)

 
	
 Shenzhen
 Herun Yueda Trading Co., Ltd. (China)

 
	
 Taiyuan
 Yueda Trading Co., Ltd. (China)

 
	
 Nanchang
 Hengrui Trading Co., Ltd. (China)

 
	
 Shunde
 Dajinchuan Industrial Paints Company Limited (China)

 
	
  

 
	
 *Domestic
 Material Subsidiaries

 

Schedule
3.14

Environmental Matters

The Company is potentially a responsible party under CERCLA or state
law at several superfund sites, some of which matters have now been closed and
of the open matters, none of them has caused or is reasonably expected to cause
a Material Adverse Effect.

Remedial activities are underway at some of the Company or a
Subsidiary’s Properties, none of which is reasonably expected to cause a
Material Adverse Effect.

While the Company’s policy is to comply with Environmental Requirements
as soon as practical, there have been and may be occasions where compliance is
delayed by such factors as scheduling requirements of disposal companies,
weather or uncertainty as to specific compliance requirements. From time to
time, the Company contests in good faith the specific procedures or
requirements for compliance with Environmental Requirements.

EXHIBIT A-1

[FORM OF]

          BORROWING
SUBSIDIARY AGREEMENT dated as of [     ],
20[  ], among THE VALSPAR CORPORATION, a Delaware corporation (the
“Company”), [Name of Borrowing Subsidiary], a [     ]
corporation (the “New Borrowing Subsidiary”), and Wells Fargo Bank, National
Association, as Administrative Agent (the “Administrative Agent”).

          Reference
is hereby made to the Three-Year Credit Agreement dated as of June __, 2009 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Company, the Borrowing Subsidiaries from time to time
party thereto, the Lenders party thereto, Wells Fargo Bank, National
Association, as Administrative Agent and an Issuing Bank, Wachovia Bank,
National Association, as an Issuing Bank and Bank of America, N.A., as
Syndication Agent. Capitalized terms used herein but not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
Under the Credit Agreement, the Lenders have agreed, upon the terms and subject
to the conditions therein set forth, to make Revolving Loans to, and issue
Letters of Credit for the account of, the Borrowing Subsidiaries, and the
Company and the New Borrowing Subsidiary desire that the New Borrowing
Subsidiary become a Borrowing Subsidiary. Each of the Company and the New
Borrowing Subsidiary represents and warrants that the representations and
warranties of the Company in the Credit Agreement relating to the New Borrowing
Subsidiary and this Agreement are true and correct on and as of the date
hereof. The Company and the New Borrowing Subsidiary represent and warrant that
there is no income, stamp, or other tax of any country, or any taxing authority
thereof or therein, in the nature of a withholding tax or otherwise, which is
imposed on any payment to be made by the New Borrowing Subsidiary pursuant to
this Agreement or the Credit Agreement, or is imposed in respect of the
execution, delivery or enforcement of this Agreement or the Credit Agreement.
The Company agrees that the Guarantee of the Company contained in the Credit
Agreement will apply to the Obligations of the New Borrowing Subsidiary. Upon
execution of this Agreement by each of the Company (and the execution and
delivery of any other documents reasonably requested by the Administrative
Agent), the New Borrowing Subsidiary and the Administrative Agent, the New Borrowing
Subsidiary shall be a party to the Credit Agreement and a “Borrowing
Subsidiary” and a “Borrower” for all purposes thereof, and the New Borrowing
Subsidiary hereby agrees to be bound by all provisions of the Credit Agreement.
Upon execution of this Agreement by each of the Company, the New Borrowing
Subsidiary and the Administrative Agent, the New Borrowing Subsidiary (if a
Domestic Material Subsidiary) agrees to become party to the Guarantee Agreement
and the Indemnity, Subrogation and Contribution Agreement.

          THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.

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

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE VALSPAR
 CORPORATION

 
	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
  

 	
 Title:

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 [NAME OF NEW
 BORROWING SUBSIDIARY]

 
	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
  

 	
 Title:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO
 BANK, NATIONAL 

 
	
  

 	
 ASSOCIATION.,
 as Administrative Agent,

 
	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
  

 	
 Title:

 

EXHIBIT A-2

[FORM OF]

BORROWING SUBSIDIARY TERMINATION

Wells Fargo
Bank, National Association, 

as Administrative Agent 

for the Lenders referred to below 

201 Third Street, 8th Floor

San Francisco, CA 94103

[Date]

Ladies and Gentlemen:

          The
undersigned, The Valspar Corporation (the “Company”), refers to the Three-Year
Credit Agreement dated as of June __, 2009 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Company, the Borrowing Subsidiaries from time to time party thereto, the
Lenders party thereto, Wells Fargo Bank, National Association, as
Administrative Agent and an Issuing Bank, Wachovia Bank, National Association,
as an Issuing Bank and Bank of America, N.A., as Syndication Agent. Capitalized
terms used and not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement.

          The
Company hereby terminates the status of [     ] (the “Terminated Borrowing
Subsidiary”) as a Borrowing Subsidiary under the Credit Agreement. [The Company
represents and warrants that no Revolving Loans made to, or Letters of Credit
issued for the account of, the Terminated Borrowing Subsidiary are outstanding
as of the date hereof and that all amounts payable by the Terminated Borrowing
Subsidiary in respect of interest and/or fees or in respect of Letters of
Credit (and, to the extent notified by the Administrative Agent or any Lender,
any other amounts payable under the Credit Agreement) pursuant to the Credit
Agreement have been paid in full on or prior to the date hereof.] [The Company
acknowledges that the Terminated Borrowing Subsidiary shall continue to be a
Borrowing Subsidiary until such time as all Revolving Loans made to the
Terminated Borrowing Subsidiary shall have been repaid, no Letters of Credit
issued for the account of the Terminated Borrowing Subsidiary shall be
outstanding, and all amounts payable by the Terminated Borrowing Subsidiary in
respect of interest and/or fees or in respect of Letters of Credit (and, to the
extent notified by the Administrative Agent or any Lender, any other amounts
payable under the Credit Agreement) pursuant to the Credit Agreement shall have
been paid in full, provided that the Terminated Borrowing Subsidiary shall
not have the right to make further Borrowings or request the Issuance of
Letters of Credit under the Credit Agreement.]

          THIS
INSTRUMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Very truly
 yours,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE VALSPAR
 CORPORATION,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
  

 	
 Title:

 

EXHIBIT B

[FORM OF]

ASSIGNMENT AND ASSUMPTION

          Reference
is made to the Three-Year Credit Agreement dated as of June __, 2009 (as
amended, modified, supplemented or waived, the “Credit Agreement”), among The
Valspar Corporation, the Borrowing Subsidiaries from time to time party
thereto, the Lenders party thereto, Wells Fargo Bank, National Association, as
Administrative Agent and an Issuing Bank, Wachovia Bank, National Association,
as an Issuing Bank and Bank of America, N.A., as Syndication Agent. Capitalized
terms used but not defined herein shall have the meanings specified in the
Credit Agreement.

          1.
The Assignor named below hereby sells and assigns, without
recourse to the Assignor, to the Assignee named below, and the Assignee hereby
purchases and assumes, without recourse to the Assignor, from the Assignor,
effective as of the Assignment Date set forth below, the interests set forth
below in the Assignor’s rights and obligations under the Credit Agreement,
including, without limitation, the interests set forth below in the Revolving
Commitments of the Assignor on the Assignment Date, and the Revolving Loans
owing to the Assignor which are outstanding on the Assignment Date. The
Assignor represents and warrants that it is the legal and beneficial owner of
the interest being assigned by it hereunder and that such interest is free and
clear of any Lien. The Assignee hereby acknowledges receipt of a copy of the Credit
Agreement. From and after the Assignment Date (i) the Assignee shall be a party
to and be bound by the provisions of the Credit Agreement and, to the extent of
the interests assigned by this Assignment and Assumption, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
of the interests assigned by this Assignment and Assumption, relinquish its
rights and be released from its obligations under the Credit Agreement.

          2.
By executing and delivering this Assignment and Assumption, the
Assignor and the Assignee shall be deemed to confirm to and agree with each
other and the other parties hereto as follows: (i) the Assignor warrants that
it is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim created by the Assignor and that its
Revolving Commitment, and the outstanding balances of its Revolving Loans, in
each case without giving effect to assignments thereof which have not become
effective, are as set forth herein, (ii) except as set forth in (i) above, the
Assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Loan Document or any other instrument or document furnished pursuant
thereto, or the financial condition of the Borrowers or any Subsidiary or the
performance or observance by the Borrowers or any Subsidiary of any of its
obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto; (iii) the Assignee
represents and warrants that it is legally authorized to enter into this
Assignment and Assumption; (iv) the Assignee confirms that it has received a
copy of the Credit Agreement, together with copies of the most recent financial
statements referred to in Section 3.04(a) thereof or delivered pursuant to
Section 5.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption; (v) the Assignee will independently and without reliance
upon the Administrative Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (vi) the Assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Administrative
Agent, by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vii) the Assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender.

          3.
This Assignment and Assumption is being delivered to the
Administrative Agent together with (i) if the Assignee is a Foreign Lender, any
documentation required to be delivered by the Assignee pursuant to Section
2.16(e) of the Credit Agreement, (ii) if the Assignee is not already a Lender
under the Agreement, an Administrative Questionnaire in the form provided by
the Administrative Agent and (iii) a processing and recordation fee in the
amount of $3,500.

          4.
THIS ASSIGNMENT AND ASSUMPTION
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

	
  

 
	
 Date of Assignment: _____________________________________________________________

 
	
  

 
	
 Legal Name of Assignor: _________________________________________________________

 
	
  

 
	
 Legal Name of Assignee: _________________________________________________________

 
	
  

 
	
 Assignee’s Address for Notices: ___________________________________________________

 
	
  

 
	
 Effective Date of Assignment (“Assignment Date”): ___________________________________

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Revolving Loan/Revolving

 Commitment

 	
  

 	
 Principal Amount Assigned

 	
  

 	
 Percentage Assigned of 

 Revolving Commitment (set 

 forth, to at least 8 decimals), as a 

 percentage of the facility and the 

 aggregate Revolving 

 Commitments of all Lenders 

 thereunder

 
	
  

 	
  

 	
 
$

 	
  

 	
 
%

 
	
  

 	
  

 	
 $

 	
  

 	
 %

 
	
  

 	
  

 	
  

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 The terms
 set forth herein are

 	
  

 	
  

 	
  

 
	
 hereby
 agreed to:

 	
  

 	
 Consent (if
 required):

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 _____________________,
 as Assignee

 	
  

 	
 THE VALSPAR
 CORPORATION

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 by

 	
  

 	
  

 	
 by

 	
  

 
	
  

 	
 Name:

 	
  

 	
  

 	
 Name:

 
	
  

 	
 Title:

 	
  

 	
  

 	
 Title:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 _____________________,
 as Assignor

 	
  

 	
  

 	
 WELLS FARGO
 BANK, NATIONAL ASSOCIATION, as Administrative Agent

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 by

 	
  

 	
  

 	
 by

 	
  

 
	
  

 	
 Name:

 	
  

 	
  

 	
 Name:

 
	
  

 	
 Title:

 	
  

 	
  

 	
 Title:

 

EXHIBIT C

FORM OF

OPINION OF LINDQUIST & VENNUM, PLLP

	
  

 	
  

 
	
 

 	
  

 
	
  

 	
 Minneapolis • Denver

 
	
  

 	
  

 
	
 Richard
 D. McNeil

 	
 4200
 IDS Center

 
	
 612-371-3266

 	
 80
 South Eighth Street

 
	
 rmcneil@lindquist.com

 	
 Minneapolis,
 MN 55402-2274

 
	
 www.lindquist.com

 	
 Phone:
 (612) 371-3211

 
	
  

 	
 Fax:
 (612) 371-3207

 

June __, 2009

Wells Fargo Bank, National
Association, 

as Administrative Agent 

201 Third Street 

San Francisco, California 94103 

The Lenders party to the
Credit 

Agreements referred to below 

Ladies and Gentlemen: 

          We
have acted as special counsel for The Valspar Corporation, a corporation
organized under the laws of the State of Delaware (the “Company”), and each of
the domestic subsidiaries of the Company listed on Schedule A hereto (together
with the Company, the “Loan Parties”) in connection with extensions of credit
to the Company pursuant to a Three-Year Credit Agreement of even date herewith
(the “Credit Agreement”) between the Company, the lenders party thereto (the
“Lenders”), the Borrowing Subsidiaries party thereto (the “Borrowing
Subsidiaries”), Wells Fargo Bank, National Association, as Administrative Agent
for the Lenders (in such capacity, the “Administrative Agent”) and an Issuing
Bank, Wachovia Bank, National Association, as an Issuing Bank, and Bank of
America, N.A., as Syndication Agent. The execution, delivery and performance by
the Company of the Loan Documents are sometimes hereinafter referred to as the
“Transactions”. 

          This
opinion is given to you pursuant to Section 4.01 of the Credit Agreement.
Capitalized terms defined in the Credit Agreement and not otherwise defined
herein shall have the meanings given those terms in the Credit Agreement. 

          We
have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion. Without limiting the foregoing, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following
documents (collectively, the “Loan Documents”): 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 the Credit Agreement; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 the Guarantee Agreement;
 and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 the Indemnity, Subrogation
 and Contribution Agreement. 

 

          We
have assumed the authenticity of any document submitted to us an original, the
conformity to the original of any document submitted to us as a copy and the
authenticity of the originals of such documents, the genuineness of all
signatures, the legal capacity of natural persons, and the due authorization,
execution and delivery of the Credit Agreement by the Lenders. As to questions
of fact, we have relied upon the representations and warranties of the Loan
Parties in the Loan Documents or in certificates of the Company, its officers
or of public officials. Certain opinions expressed below as to factual matters
are qualified as being limited “to our knowledge” or by other words to the same
or similar effect. Such words, as used herein, mean that prior to or during the
course of this representation of the Loan Parties in connection with the
specific transactions contemplated by the Loan Documents, no contrary
information came to the attention of Richard D. McNeil, the attorney in our
firm who has represented the Loan Parties in connection with the transactions
contemplated by the Loan Documents and the preparation of this opinion. In
rendering such opinions, we have not conducted any independent investigation or
consulted with other attorneys in our firm with respect to the matters covered
thereby. 

          Upon
the basis of the foregoing, we are of the opinion that: 

          1.
Each of the Loan Parties (a) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation as
indicated on the attached Schedule A, and (b) has all requisite power and
authority to carry on its business as now conducted. 

          2.
The Transactions are within the Loan Parties’ corporate powers and have been
duly authorized by all necessary corporate and, if required, stockholder
action. 

          3.
Each of the Loan Documents has been duly executed and delivered by each of the
Loan Parties that is a party thereto and constitutes the legal, valid and
binding obligation of each such Loan Party enforceable against each such Loan
Party in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law. 

          4.
The Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of any of the Loan Parties or any order of any
Governmental Authority, (c) to our knowledge, will not violate or result in a
default under any indenture, agreement or other instrument binding upon any of
the Loan Parties or any of their assets, or give rise to a right thereunder to
require any payment to be made by any of the Loan Parties, and (d) to our
knowledge, will not result in the creation or imposition of any Lien (other
than any Liens created or arising under any Loan Documents) on any asset of any
Loan Party. 

          5.
To our knowledge, there are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or threatened against or
affecting the Company or any of the Subsidiaries (a) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect or (b) that involve the Transactions. 

          6.
No Loan Party is an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940. 

          7.
The making of the Loans to the Company and the application of the proceeds
thereof by the Company pursuant to the terms of the Credit Agreement will not
violate Regulation T, U or X of the Board of Governors of the Federal Reserve
System. 

          8.
A Minnesota State court or a federal court applying the choice of laws
principles prevailing under the laws of the State of Minnesota to which the
question is presented will give effect to the provisions in the Loan Documents
selecting the laws of the State of New York as the governing law thereof
(except as therein provided) and will apply such laws, rather than the laws of
Minnesota or any other state, to the construction and application thereof. 

          9.
None of the provisions of the Loan Documents will violate any law, statute or
regulation relating to usury and the use of counterpart copies of any of the
Loan Documents does not affect the enforceability of any of the Loan Documents.

          We
are admitted to practice only in the State of Minnesota and the foregoing
opinion is limited to the laws of the State of Minnesota, the corporate laws of
the State of Delaware and the Federal laws of the United States of America. We
have assumed for purposes of this opinion that New York law is substantially
equivalent to the laws of Minnesota with respect to the opinions expressed
herein. 

          This
opinion is given solely for the use and benefit of the Lenders, the
Administrative Agent, and each of their successors and assigns under the Loan
Documents in connection with the loans contemplated by the Credit Agreement and
may not be relied upon for any other purpose or by any other party or entity. 

Very truly yours,

Schedule A to Opinion of Lindquist & Vennum, P.L.L.P. 

dated June __, 2009

Engineered Polymer
Solutions, Inc., a Delaware corporation 

Valspar Finance Corporation, a Minnesota corporation 

Valspar Coatings Finance Corporation, a Minnesota corporation 

Valspar Sourcing, Inc., a Minnesota corporation 

Valspar Credit Corporation, a Minnesota corporation 

EXHIBIT D 

MANDATORY COSTS RATE

	
  

 	
  

 
	
 1.

 	
 Definitions 

In this Exhibit: 

 
	
  

 	
  

 
	
  

 	
 “Act” means the Bank of England Act of
 1998. 

 
	
  

 	
  

 
	
  

 	
 The terms “Eligible Liabilities” and “Special Deposits” have the meanings
 ascribed to them under or pursuant to the Act or by the Bank of England (as
 may be appropriate), on the day of the application of the formula. 

 
	
  

 	
  

 
	
  

 	
 “Fee Base” has the meaning ascribed to it
 for the purposes of, and shall be calculated in accordance with, the Fees
 Regulations. 

 
	
  

 	
  

 
	
  

 	
 “Fees Regulations” means, as appropriate,
 either: 

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)

 	
 the Banking Supervision
 (Fees) Regulations 1998; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
 such regulations as from
 time to time may be in force, relating to the payment of fees for banking
 supervision in respect of periods subsequent to January 1, 2000. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 “FSA” means the Financial Services
 Authority.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Any reference to a
 provision of any statute, directive, order or regulation herein is a
 reference to that provision as amended or re-enacted from time to time.

 
	
  

 	
  

 	
  

 	
  

 
	
 2.

 	
 Calculation
 of the Mandatory Costs Rate

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The Mandatory Costs Rate
 is an addition to the interest rate on each Eurocurrency Loan or any other
 sum on which interest is to be calculated to compensate the Lenders for the cost
 attributable to such Eurocurrency Loan or such sum resulting from the
 imposition from time to time under or pursuant to the Act and/or by the Bank
 of England and/or the FSA (or other United Kingdom governmental authorities
 or agencies) of a requirement to place non-interest bearing or Special
 Deposits (whether interest bearing or not) with the Bank of England and/or
 pay fees to the FSA calculated by reference to the liabilities used to fund
 the relevant Eurocurrency Loan or such sum.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 The “Mandatory Costs Rate” will be the rate
 determined by the Administrative Agent to be equal to the rate (rounded
 upward, if necessary, to the next higher 1/100 of 1%) resulting from the
 application of the following formula:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 For Sterling:

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 XL + S(L-D) + F x 0.01

 	
  

 
	
  

 	
  

 	
  

 	
 100-(X+S)

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 For other Designated
 Foreign Currencies:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 F x 0.01 

 	
  

 
	
  

 	
  

 	
  

 	
    300

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 where on the day of
 application of the formula

 

	
  

 	
  

 	
  

 
	
  

 	
 X

 	
 is the percentage of
 Eligible Liabilities (in excess of any stated minimum) by reference to which
 Wells Fargo Bank, National Association (“WFB”) is required under or pursuant
 to the Act to maintain cash ratio deposits with the Bank of England; 

 
	
  

 	
  

 	
  

 
	
  

 	
 L

 	
 is the rate of interest
 (exclusive of Euro-Currency Margin and Mandatory Costs Rate) payable on that
 day on the related Eurocurrency Loan or unpaid sum pursuant to this
 Agreement; 

 
	
  

 	
  

 	
  

 
	
  

 	
 F

 	
 is the rate of charge
 payable by WFB to the FSA pursuant to the Fees Regulations and expressed in
 pounds per £1 million of the Fee Base of WFB; 

 
	
  

 	
  

 	
  

 
	
  

 	
 S

 	
 is the level of
 interest-bearing Special Deposits, expressed as a percentage of Eligible
 Liabilities, which WFB is required to maintain by the Bank of England (or
 other United Kingdom governmental authorities or agencies); and 

 
	
  

 	
  

 	
  

 
	
  

 	
 D

 	
 is the percentage rate per
 annum payable by the Bank of England to WFB on Special Deposits. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (X, L, S and D are to be
 expressed in the formula as numbers and not as percentages. A negative result
 obtained from subtracting D from L shall be counted as zero.)

 
	
  

 	
  

 
	
  

 	
 The Mandatory Costs Rate
 attributable to a Eurocurrency Loan or other sum for any period shall be
 calculated at or about 11:00 A.M. (London time) on the first day of such
 period for the duration of such period. 

 
	
  

 	
  

 
	
  

 	
 The determination of
 Mandatory Costs Rate by the Administrative Agent in relation to any period
 shall, in the absence of manifest error, be conclusive and binding on all
 parties hereto. 

 
	
  

 	
  

 
	
 3.

 	
 Change of
 Requirements

 
	
  

 	
  

 
	
  

 	
 If there is any change in
 circumstance (including the imposition of alternative or additional
 requirements) which in the reasonable opinion of the Administrative Agent
 renders or will render the above formula (or any element thereof, or any
 defined term used therein) inappropriate or inapplicable, the Administrative
 Agent shall (with the written consent of the Company, which shall not be
 unreasonably withheld) be entitled to vary the same. Any such variation
 shall, in the absence of manifest error, be conclusive and binding on all
 parties and shall apply from the date specified in such notice.

 

EXHIBIT E 

THE VALSPAR CORPORATION 

COMPLIANCE CERTIFICATE

          Reference
is made to the Three-Year Credit Agreement dated as of June __, 2009 (as
modified and supplemented and in effect from time to time, the “Credit
Agreement”) among The Valspar Corporation, the Borrowing Subsidiaries from time
to time party thereto, the Lenders party thereto, Wells Fargo Bank, National
Association, as Administrative Agent and an Issuing Bank, Wachovia Bank,
National Association, as an Issuing Bank and Bank of America, N.A., as
Syndication Agent. Capitalized terms used herein shall have the meanings
ascribed thereto in the Credit Agreement. 

          Pursuant
to Section 5.01[(a)/(b)] of the Credit Agreement,
[          ], the duly
authorized [Chief Financial Officer/Treasurer/Chief Accounting Officer] of The
Valspar Corporation, hereby certifies that the consolidated balance sheet of
the Company and its Consolidated Subsidiaries as of the end of the Fiscal
[Quarter/Year] ended [          ]
and the related statement of income, shareholders’ equity and statement of cash
flows furnished to each of the Lenders simultaneously herewith are fairly
presented, prepared in accordance with GAAP, applied on a basis consistent with
the most recent audited consolidated financial statements of the Company and
its Consolidated Subsidiaries (subject to normal year-end adjustments). 

          Pursuant
to Section 5.01(c) of the Credit Agreement,
[       ], the duly authorized [Chief
Financial Officer/Treasurer/Chief Accounting Officer] of The Valspar
Corporation, hereby (i) certifies to the Administrative Agent and the Lenders
that the information contained in the Compliance Check List attached hereto is
true, accurate and complete as of [    ], and that no
Default or Event of Default is in existence on and as of the date hereof and
(ii) restates and reaffirms that the representations and warranties contained
in Article III of the Credit Agreement are true on and as of the date hereof as
though restated on and as of this date. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE VALSPAR CORPORATION,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 [          ]

 
	
  

 	
  

 	
  

 	
 Title:

 	
 [Chief Financial

 
	
  

 	
  

 	
  

 	
  

 	
 Officer/Treasurer/Chief

 
	
  

 	
  

 	
  

 	
  

 	
 Accounting Officer]

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Date:

 	
  

 

COMPLIANCE CHECK LIST 

The Valspar Corporation

	
  

 
	
  

 

[ _______________ }

	
  

 	
  

 
	
 1.

 	
 Subsidiaries (Section
 3.08) 

 
	
  

 	
  

 
	
  

 	
 The Company has no
 Subsidiaries except for those Subsidiaries listed on Schedule 3.08, or as
 described in the Compliance Certificate furnished pursuant to Section
 5.01(c), in each case which accurately sets forth each such Subsidiary’s
 complete name and jurisdiction of incorporation. 

 
	
  

 	
  

 
	
  

 	
 New Subsidiaries not
 listed on Schedule 3.08 or in a prior Compliance Certificate: 

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Domestic Subsidiaries

 	
 Name

 	
 Jurisdiction of
 Incorporation

 
	
  

 
	
  

 	
 Foreign Subsidiaries

 	
 Name

 	
 Jurisdiction of
 Incorporation

 

	
  

 	
  

 
	
 2.

 	
 Ratio of Consolidated Debt
 to Consolidated EBITDA (Section 5.03) 

 
	
  

 	
  

 
	
  

 	
 The ratio of Consolidated
 Debt at any date to Consolidated EBITDA for the period of four consecutive
 Fiscal Quarters ended on or most recently prior to such date will not exceed
 3.50 to 1.00. 

 

	
  

 	
  

 	
  

 
	
 (a)

 	
 Consolidated Debt

 	
 Schedule
 - 2 $______________

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 Consolidated EBITDA

 	
 Schedule
 - 1 $______________

 
	
  

 	
  

 	
  

 
	
 Actual Ratio of (a) to (b)

 	
 _______________

 
	
  

 	
  

 
	
 Maximum Ratio for
 Applicable Period

 	
 3.50
 to 1.00

 

	
  

 	
  

 
	
 3.

 	
 Interest Coverage Ratio 

 
	
  

 	
  

 
	
  

 	
 The ratio of Consolidated
 EBITDA for the period of four consecutive Fiscal Quarters ended on or most
 recently prior to any date of determination to Consolidated Interest Expense
 at such date will not be less than the ratio of 4.00 to 1.00. 

 

	
  

 	
  

 	
  

 
	
 (a)

 	
 Consolidated EBITDA

 	
 Schedule
 - 1 $______________

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 Consolidated Interest
 Expense

 	
 Schedule
 - 3 $______________

 
	
  

 	
  

 	
  

 
	
 (c)

 	
 Actual Ratio of (a) to (b)

 	
 _______________

 
	
  

 	
  

 	
  

 
	
 Minimum Ratio for
 Applicable Period

 	
 4.00
 to 1.00

 

	
  

 	
  

 
	
 4.

 	
 Loans or Advances (Section
 5.06) 

 
	
  

 	
  

 
	
  

 	
 Neither the Company nor
 any of its Subsidiaries shall make loans or advances to any Person except:
 (i) loans or advances to employees not exceeding US$10,000,000 in the
 aggregate at any time outstanding made in the ordinary course of business;
 (ii) deposits required by government agencies or public utilities; (iii)
 loans or advances to any Borrower or Subsidiary Guarantor; (iv) Prepaid
 Rebates; and (v) loans, advances or deposits other than those permitted by
 clauses (i) through (iv) of this Section not exceeding 10% of Consolidated
 Total Assets in the aggregate at any time outstanding, provided that
 after giving effect to the making of any loans, advances or deposits
 permitted by clause (i), (ii), (iii), (iv) or (v) of this Section, no Default
 shall have occurred and be continuing.

 

	
  

 	
  

 	
  

 
	
 (a)

 	
 loans and advances to
 employees

 	
 $______________

 
	
  

 	
  

 	
  

 
	
  

 	
 Limitation

 	
 US$10,000,000

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 other loans and advances
 not permitted by clauses (i) through (iv), inclusive

 	
 $______________

 
	
  

 	
  

 	
  

 
	
  

 	
 10% of Consolidated Total
 Assets

 	
 $______________

 

	
  

 	
  

 
	
 5.

 	
 Negative Pledge (Section
 5.08) 

 
	
  

 	
  

 
	
  

 	
 Neither the Company nor
 any Consolidated Subsidiary will create, assume or suffer to exist any Lien
 on any asset now owned or hereafter acquired by it, except: 

 
	
  

 	
  

 
	
  

 	
           (a)
 Liens existing on the date of this Agreement securing Debt outstanding on the
 date of this Agreement in an aggregate principal amount not exceeding
 US$10,000,000; 

 
	
  

 	
  

 
	
  

 	
           (b)
 any Lien existing on any asset of any corporation at the time such
 corporation becomes a Consolidated Subsidiary and not created in
 contemplation of such event; 

 
	
  

 	
  

 
	
  

 	
           (c)
any Lien on any asset (other than Equity Interests, Indebtedness or
inventory) securing Debt incurred or assumed for the purpose of financing all
or any part of the cost of acquiring or constructing such asset, provided
that such Lien attaches to such asset concurrently with or within 18 months
after the acquisition or completion of construction thereof;  

 
	
  

 	
  

 
	
  

 	
           (d)
 any Lien on any asset of any corporation existing at the time such
 corporation is merged or consolidated with or into the Company or a
 Consolidated Subsidiary and not created in contemplation of such event; 

 
	
  

 	
  

 
	
  

 	
           (e)
 any Lien existing on any asset prior to the acquisition thereof by the
 Company or a Consolidated Subsidiary and not created in contemplation of such
 acquisition; 

 
	
  

 	
  

 
	
  

 	
           (f)
 Liens securing Debt owing by any Subsidiary to any Borrower or Subsidiary
 Guarantor; 

 
	
  

 	
  

 
	
  

 	
           (g)
 any Lien arising out of the refinancing, extension, renewal or refunding of
 any Debt secured by any Lien permitted by any of the foregoing clauses of
 this Section, provided that such Debt is not secured by any additional
 assets, and (ii) the amount of such Debt secured by any such Lien is not
 increased; 

 

	
  

 	
  

 
	
  

 	
           (h)
 Liens incidental to the conduct of its business or the ownership of its
 assets which (i) do not secure Debt and (ii) do not in the aggregate
 materially detract from the value of its assets or materially impair the use
 thereof in the operation of its business; 

 
	
  

 	
  

 
	
  

 	
           (i)
 any Lien on Excess Margin Stock; 

 
	
  

 	
  

 
	
  

 	
           (j)
 any Lien incurred with respect to Securitization Debt permitted under Section
 5.21; and 

 
	
  

 	
  

 
	
  

 	
           (k)
 Liens not otherwise permitted by the foregoing clauses of this Section
 securing Debt (other than Revolving Loans) in an aggregate principal amount
 at any time outstanding which, together with the amount of Debt secured by
 Liens permitted by the foregoing paragraphs (a) through (i), does not exceed
 10% of Consolidated Total Assets. 

 

	
  

 	
  

 
	
 Total Secured Debt

 	
 $______________

 
	
 Consolidated Total Assets

 	
 $______________

 
	
 10% of Consolidated Total
 Assets

 	
 $______________

 

	
  

 	
  

 
	
 6.

 	
 Consolidations, Mergers
 and Sales of Assets (Section 5.11(d)) 

 
	
  

 	
  

 
	
  

 	
 The Company will not, nor
 will it permit any Subsidiary to, consolidate or merge with or into, or sell,
 lease or otherwise transfer all or any substantial part of its assets (other
 than Excess Margin Stock) to, any other Person, or discontinue or eliminate
 any business line or segment, provided that the foregoing limitation on the
 sale, lease or other transfer of assets and on the discontinuation or
 elimination of a business line or segment shall not apply to loans or advances
 permitted by Section 5.06 or prohibit, during any Fiscal Quarter, a transfer
 of assets or the discontinuance or elimination of a business line or segment
 (in a single transaction or in a series of related transactions) unless the
 aggregate assets to be so transferred or utilized in a business line or
 segment to be so discontinued, when combined with all other assets
 transferred (other than inventory sold in the ordinary course of business),
 and all other assets utilized in all other business lines or segments
 discontinued, during such Fiscal Quarter and the immediately preceding three
 Fiscal Quarters contributed more than 20% of Consolidated Operating Profits
 during the four consecutive Fiscal Quarters immediately preceding such Fiscal
 Quarter.

 

	
  

 	
  

 	
  

 
	
 (a)

 	
 Consolidated Operating
 Profits

 	
 $______________

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 20% of Consolidated
 Operating Profits

 	
 $______________

 
	
  

 	
  

 	
  

 
	
 (c)

 	
 aggregate of assets
 transferred or utilized in discontinued business lines or segments

 	
 $______________

 

	
  

 	
  

 	
  

 
	
 7.

 	
 Limitation on Subsidiary
 Debt (Section 5.21) 

 
	
  

 	
  

 	
  

 
	
  

 	
 The Company shall not
 permit the outstanding principal amount of Debt of the Subsidiaries (other
 than (i) Debt owed to any Borrower or Subsidiary Guarantor, (ii) $250,000,000
 in Securitization Debt and (iii) Debt owed under this Agreement or any other
 Loan Document) at any time to exceed, in the aggregate, 10% of Consolidated
 Total Assets. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 outstanding principal
 amount of Debt of Subsidiaries (excluding (i) Debt owed to any Borrower or
 Subsidiary Guarantor, (ii) 

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 $250,000,000 in
 Securitization Debt and (iii) Debt owed under the Credit 
Agreement or any
 other Loan Document)

 	
 $______________

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 10% of Consolidated Total
 Assets

 	
 $______________

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Outstanding amount of
 Securitization Debt

 	
 $______________

 

Schedule - 1

EBITDA

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (1)

 	
 Consolidated
 Net Income for:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (2)

 	
 Additions to
 Consolidated Net Income, (to the extent taken into account in the calculation
 of Consolidated Net Income):

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 Consolidated
 Interest Expense for:

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 Taxes on income
 of the Company and its Consolidated Subsidiaries for:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 Sum of all
 depreciation expenses of the Company and its Consolidated Subsidiaries for:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 Amortization
 expenses of the Company and its Consolidated Subsidiaries for:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (E)

 	
 Depletion
 expenses of the Company and its Consolidated Subsidiaries for:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (F)

 	
 Extraordinary,
 unusual or non-recurring non-cash losses, including goodwill impairment or
 amortization expense and non-cash losses from the sale, exchange, transfer or
 other disposition of property of the Company or its Consolidated Subsidiaries
 and the related tax effects in accordance with GAAP for:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (G)

 	
 Total
 Additions to Net Income (Sum of Lines 2(A) – 2(F))

 	
  

 	
 $___________

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (3)

 	
 Net Income
 plus Additions (Sum of Line 1 and 2(G))

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (4)

 	
 Reductions
 from Consolidated Net Income (to the extent taken into account in the
 calculation of Consolidated Net Income).

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 (A)

 	
 The income
 of any Person (other than a wholly owned Subsidiary of the Company) in which
 any Person other than the Company or any of its Consolidated Subsidiaries has
 a joint interest or a partnership interest or other ownership interest,
 except to the extent of the amount of dividends or other distributions
 actually paid to the Company or any of its Consolidated Subsidiaries by such
 Person for:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (B)

 	
 Gains from
 the sale, exchange, transfer or other disposition of property or assets of
 the Company and its 

 	
  

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Consolidated
 Subsidiaries (other than inventory sold in the ordinary course of business)
 during such period, and related tax effects in accordance with GAAP for:

 	
  

 	
  

 
	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (C)

 	
 Any other
 extraordinary, unusual or non-recurring gains or other income not from the
 continuing operations of the Company and its Consolidated Subsidiaries during
 such period, and related tax effects in accordance with GAAP for:

 	
  

 	
  

 
	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (D)

 	
 the income
 of any Subsidiary of the Company to the extent that the declaration or
 payment of dividends or similar distributions by that subsidiary of that
 income is not at the time permitted by operation of the terms of its charter
 or any agreement, instrument, judgment, decree, order, statute, rule or
 governmental regulation applicable to that subsidiary for:

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
 ________quarter________-________

 	
  

 	
 $___________

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Total

 	
  

 	
  

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (E)

 	
 Total
 Reductions from Net Income (Sum of Lines 4(A) – 4(D))

 	
  

 	
 $___________

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 (5)

 	
 Total Consolidated EBITDA
 (Difference between Line 3 and Line 4(E)

 	
  

 	
 $___________

 

Schedule - 2

Consolidated Debt

	
  

 	
  

 	
  

 
	
 Borrowed
 Money or Bonds, Debentures,

 	
  

 	
 TOTAL

 
	
 Notes or
 Similar Instruments

 	
  

 	
  

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
  

 
	
 Total Borrowed Money

 	
  

 	
 $___________

 
	
  

 	
  

 	
  

 
	
 Capital
Leases 

 	
  

 	
  

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
  

 
	
 Total Capital Leases

 	
  

 	
 $___________

 
	
  

 	
  

 	
  

 
	
 Reimbursement
Obligations 

 	
  

 	
  

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
  

 
	
 Total Reimbursement Obligations

 	
  

 	
 $___________

 
	
  

 	
  

 	
  

 
	
 Guaranteed
Obligations 

 	
  

 	
  

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
  

 
	
 Total Guaranteed Obligations

 	
  

 	
 $___________

 
	
  

 	
  

 	
  

 
	
 Securitization
Debt 

 	
  

 	
  

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
  

 
	
 Total Securitization Debt

 	
  

 	
 $___________

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Other Debt

 	
  

 	
  

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
  

 
	
 Total Other Debt

 	
  

 	
 $___________

 
	
  

 	
  

 	
  

 
	
 Consolidated Debt

 	
  

 	
 $___________

 	
  

 	
  

 

Schedule - 3

Consolidated Interest Expense  

	
  

 	
  

 	
  

 
	
 Interest

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
 $

 
	
  

 	
  

 	
  

 
	
 Consolidated Interest Expense

 	
  

 	
 $___________

 

EXHIBIT F 

[FORM OF GUARANTEE AGREEMENT]

          GUARANTEE
AGREEMENT dated as of June __, 2009, among each of the subsidiaries listed on
Schedule I hereto (each such subsidiary individually a “Guarantor”, and collectively the “Guarantors”) of THE VALSPAR CORPORATION, a
Delaware corporation (the “Company”),
and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (the “Administrative Agent”) for the Lenders
(each as defined in the Credit Agreement referred to below). 

          Reference
is made to the Three-Year Credit Agreement dated as of June __, 2009 (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Company, the
Borrowing Subsidiaries from time to time party thereto, the lenders from time to
time party thereto (the “Lenders”),
Wells Fargo Bank, National Association, as Administrative Agent and an Issuing
Bank, Wachovia Bank, National Association, as an Issuing Bank and Bank of
America, N.A., as Syndication Agent. Capitalized terms used herein and not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. 

          The
Lenders and the Issuing Bank, respectively, have agreed to make Revolving Loans
to and issue Letters of Credit for the account of the Borrowers, pursuant to,
and upon the terms and subject to the conditions specified in, the Credit
Agreement. Each of the Guarantors is a subsidiary of the Company and
acknowledges that it will derive substantial benefit from the making of the
Revolving Loans by the Lenders and the issuance of Letters of Credit by the
Issuing Bank. The obligations of the Lenders to make Revolving Loans and of the
Issuing Bank to issue Letters of Credit are conditioned on, among other things,
the execution and delivery by the Guarantors of a Guarantee Agreement in the
form hereof. As consideration therefor and in order to induce the Lenders to
make Revolving Loans and the Issuing Bank to issue Letters of Credit, the
Guarantors are willing to execute this Agreement. 

          Accordingly,
the parties hereto agree as follows: 

          SECTION
1. Guarantee. Each Guarantor
unconditionally guarantees, jointly with the other Guarantors and severally, as
a primary obligor and not merely as a surety, the due and punctual payment of
(i) the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Revolving Loans made to each Borrower, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (ii) all payments required to be made by any Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of LC Disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of any Borrower or any other Guarantor to the
Lenders under the Credit Agreement or any other Loan Document when and as due
(all the obligations referred to in the preceding clause being collectively
called the “Obligations”). Each
Guarantor further agrees that the Obligations may be extended or renewed, in
whole or in part, without notice to or further assent from it, and that it will
remain bound upon its guarantee notwithstanding any extension or renewal of any
Obligation. 

          SECTION
2. Obligations Not Waived. To the
fullest extent permitted by applicable law, each Guarantor waives presentment
to, demand of payment from and protest to any Borrower or to any Guarantor of
any of the Obligations, and also waives notice of acceptance of its guarantee
and notice of protest for nonpayment (except notice to any Borrower to the
extent required under Section 6.01 of the Credit Agreement). To the fullest
extent permitted by applicable law, the obligations of each Guarantor 

hereunder shall not be
affected by (a) the failure of the Administrative Agent or any Lender to assert
any claim or demand or to enforce or exercise any right or remedy against any
Borrower or any other Guarantor under the provisions of the Credit Agreement,
any other Loan Document or otherwise, (b) any rescission, waiver, amendment or
modification of, or any release from any of the terms or provisions of this
Agreement, any other Loan Document, any Guarantee or any other agreement,
including with respect to any other Guarantor under this Agreement, (c) the
failure of the Company or any Subsidiary to comply with Section 5.22 of the
Credit Agreement and Section 19 hereof or (d) the release of any of the
security held by or on behalf of the Administrative Agent or any Lender. 

          SECTION
3. Guarantee of Payment. Each
Guarantor further agrees that its guarantee constitutes a guarantee of payment
when due and not of collection, and waives any right to require that any resort
be had by the Administrative Agent or any Lender to any of the security held
for payment of the Obligations or to any balance of any deposit account or
credit on the books of the Administrative Agent or any Lender in favor of any
Borrower, any Guarantor or any other person. 

          SECTION
4. No Discharge or Diminishment of Guarantee. The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim
of waiver, release, surrender, alteration or compromise of any of the
Obligations, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any Lender to assert any claim or demand or to enforce
any remedy under the Credit Agreement, any other Loan Document or any other
instrument or agreement, by any waiver or modification of any provision of any
thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of any Guarantor or that
would otherwise operate as a discharge of any Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of all the
Obligations). 

          SECTION
5. Defenses of Borrower Waived. To the fullest extent permitted by applicable law, each of the Guarantors
waives any defense based on or arising out of any defense of any Borrower or
any Guarantor, the unenforceability of the Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of any Borrower,
other than the final and indefeasible payment in full in cash of the
Obligations. The Administrative Agent may, at its election, foreclose on any
security by one or more judicial or nonjudicial sales, accept an assignment of
any such security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with any Borrower or any other Guarantor
or exercise any other right or remedy available to them against any Borrower or
any Guarantor, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash. Pursuant to applicable law, each of the
Guarantors waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such
Guarantor against any Borrower or any other Guarantor or guarantor, as the case
may be, or any security. 

          SECTION
6. Agreement to Pay; Subordination.

          (a) In furtherance of the foregoing and not in limitation of any other right that
the Administrative Agent or any Lender has at law or in equity against any
Guarantor by virtue hereof, upon the failure of any Borrower or any other
Guarantor to pay any Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each 

Guarantor hereby promises to
and will forthwith pay, or cause to be paid, to the Administrative Agent in
cash the amount of such unpaid Obligations. Upon payment by any Guarantor of
any sums to the Administrative Agent as provided above, all rights of such
Guarantor against the applicable Borrower or any Guarantor arising as a result
thereof by way of right of subrogation, contribution, reimbursement, indemnity
or otherwise shall in all respects be subordinate and junior in right of
payment to the prior indefeasible payment in full in cash of all the
Obligations. In addition, if there shall occur any Default or Event of Default
under paragraph (g) or (h) of Section 6.01 of the Credit Agreement, any
indebtedness of any Borrower or any Guarantor now or hereafter held by any
Guarantor is hereby subordinated in right of payment to the prior payment in
full of the Obligations. If any amount shall erroneously be paid to any
Guarantor on account of (i) such subrogation, contribution, reimbursement,
indemnity or similar right or (ii) any such indebtedness of any Borrower, such
amount shall be held solely for the benefit of the Lenders (and the Guarantors
shall have no legal, equitable or beneficial interest therein) and shall
forthwith be paid to the Administrative Agent to be credited against the
payment of the Obligations, whether matured or unmatured, in accordance with
the terms of the Loan Documents. 

          (b) Each Guarantor further agrees that if payment in respect of any Obligation
shall be due in a currency other than Dollars and/or at a place of payment
other than San Francisco and if, by reason of any legal prohibition, disruption
of currency or foreign exchange markets, war or civil disturbance or other
event, payment of such Obligation in such currency or at such place of payment
shall be impossible or, in the judgment of any Lender, not consistent with the
protection of its rights or interests, then, at the election of such Lender,
such Guarantor shall make payment of such Obligation in Dollars (based upon the
applicable Exchange Rate in effect on the date of payment) and/or in San
Francisco, and shall indemnify such Lender against any losses or expenses
(including losses or expenses resulting from fluctuations in exchange rates)
that it shall sustain as a result of such alternative payment. 

           SECTION
7. Information. Each of the
Guarantors assumes all responsibility for being, and keeping, itself informed
of the Borrowers’ and the other Guarantors’ financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that such Guarantor
assumes and incurs hereunder, and agrees that neither the Administrative Agent
nor any Lender will have any duty to advise any of the Guarantors of
information known to it or any of them regarding such circumstances or risks. 

          SECTION
8. Representations and Warranties, Agreements. Each of the Guarantors represents and warrants as to
itself that all representations and warranties relating to it contained in any
Loan Document to which it is a party are true and correct in all material
respects. Each of the Guarantors agrees that the provisions of Section 2.17 of
the Credit Agreement shall apply equally to each Guarantor with respect to
payments made by it hereunder. 

          SECTION
9. Termination. The Guarantees made hereunder (a) shall terminate when all the Obligations have been indefeasibly
paid in full, no Letters of Credit are outstanding and the Lenders have no
further commitment to lend under the Credit Agreement and (b) shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any Obligation is rescinded or must otherwise be restored
by the Administrative Agent or any Lender upon the bankruptcy or reorganization
of any Borrower or any Guarantor or otherwise. The Guarantees hereunder will
also be released as provided in Section 9.15 of the Credit Agreement. 

          SECTION
10. Binding Effect; Several Agreement; Assignments. Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party; and all covenants, promises and agreements by
or on behalf of the Guarantors that are contained in this Agreement shall bind
and inure to the benefit of each party hereto and their respective successors
and permitted assigns. This Agreement shall become effective as to any 

Guarantor when a counterpart
hereof executed on behalf of such Guarantor shall have been delivered to the
Administrative Agent, and a counterpart hereof shall have been executed on
behalf of the Administrative Agent, and thereafter shall be binding upon such
Guarantor and the Administrative Agent and their respective successors and
permitted assigns, and shall inure to the benefit of such Guarantor, the
Administrative Agent and the Lenders, and their respective successors and
permitted assigns, except that no Guarantor shall have the right to assign its
rights or obligations hereunder or any interest herein (and any such attempted
assignment shall be void). This Agreement shall be construed as a separate
agreement with respect to each Guarantor and may be amended, modified,
supplemented, waived or released with respect to any Guarantor without the
approval of any other Guarantor and without affecting the obligations of any
other Guarantor hereunder. 

          SECTION
11. Waivers; Amendment. 

          
(a) No failure or delay of the Administrative Agent or any Lender in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The
rights and remedies of the Administrative Agent and of the Lenders hereunder
and under the Credit Agreement are cumulative and are not exclusive of any
rights or remedies that such parties would otherwise have. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by any Guarantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on any Guarantor in any case shall entitle such
Guarantor to any other or further notice or demand in similar or other
circumstances. 

          
(b) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into between the
Guarantors with respect to which such waiver, amendment or modification relates
and the Administrative Agent, with the prior written consent of the Lenders or
the Required Lenders, as the case may be, if required under the Credit
Agreement. 

          SECTION
12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

          SECTION
13. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 9.01
of the Credit Agreement. All communications and notices hereunder to each
Guarantor shall be given in care of the Company. 

          SECTION
14. Survival of Agreement; Severability.

          (a) All covenants, agreements, representations and warranties made by the
Guarantors herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Administrative
Agent, the Issuing Bank and the Lenders and shall survive the making by the
Lenders of the Revolving Loans and the issuance by the Issuing Bank of Letters
of Credit regardless of any investigation made by the Administrative Agent, the
Issuing Bank or any Lender or on their behalf, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Revolving
Loan or any other fee or amount payable under this Agreement or any other Loan
Document or in respect of any Letter of Credit is outstanding and unpaid, the
Revolving Commitments have not been terminated or any Letter of Credit is
outstanding. 

          (b) In the event any one or more of the provisions contained in this Agreement or
in any other Loan Document should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular provision
in a particular jurisdiction shall not in and of itself affect the validity of
such provision in any other jurisdiction). The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions. 

          SECTION
15. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute an original,
but all of which when taken together shall constitute a single contract, and
shall become effective as provided in Section 10. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Agreement. 

          SECTION
16. Rules of Interpretation. The rules of interpretation specified in Section 1.03 of the Credit Agreement shall
be applicable to this Agreement. 

          SECTION
17. Jurisdiction; Consent to Service of
Process. 

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

          (b) Each Guarantor hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or the other Loan Documents in any such
New York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court. 

          (c) Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 13. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law. 

          SECTION
18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS 

REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 18.

          SECTION
19. Additional Guarantors. Pursuant to Section 5.22 of the Credit Agreement, each Domestic Material
Subsidiary of the Company that was not in existence or was not such a Domestic
Material Subsidiary on the date of the Credit Agreement is required to enter
into this Agreement as a Guarantor upon becoming a Domestic Material
Subsidiary. Upon execution and delivery after the date hereof by the
Administrative Agent and a Subsidiary of an instrument in the form of Annex 1,
such Subsidiary shall become a Guarantor hereunder with the same force and
effect as if originally named as a Guarantor herein. The execution and delivery
of any instrument adding an additional Guarantor as a party to this Agreement
shall not require the consent of any other Guarantor hereunder. The rights and
obligations of each Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor as a party to this Agreement.

          SECTION
20. Right of Setoff. If an Event
of Default shall have occurred and be continuing, the Administrative Agent, the
Issuing Bank and each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other Debt at any time owing by the Administrative Agent, the Issuing
Bank or such Lender to or for the credit or the account of any Guarantor against
any or all the obligations of such Guarantor now or hereafter existing under
this Agreement and the other Loan Documents held by the Administrative Agent,
the Issuing Bank or such Lender, irrespective of whether or not the
Administrative Agent, the Issuing Bank or such Lender shall have made any
demand under this Agreement (except to the extent required under Section 6.01
of the Credit Agreement) or any other Loan Document and although such
obligations may be contingent or unmatured or are owed to a branch or office of
the Administrative Agent, the Issuing Bank or such Lender different from the
branch or office holding such deposits or owing such Debt, and in the event of
any such set-off, the Administrative Agent, the Issuing Bank or such Lender shall
promptly give such Guarantor notice thereof. The rights of the Administrative
Agent and each Lender under this Section 20 are in addition to other rights and
remedies (including other rights of setoff) which the Administrative Agent, the
Issuing Bank or such Lender may have. 

          IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ENGINEERED POLYMER
 SOLUTIONS, INC.,

 
	
  

 	
 as a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR FINANCE
 CORPORATION,

 
	
  

 	
 as a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR COATINGS FINANCE
 CORPORATION,

 
	
  

 	
 as a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR SOURCING, INC., as
 a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR CREDIT
 CORPORATION, as a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO BANK, NATIONAL
 ASSOCIATION,

 
	
  

 	
 as Administrative Agent,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

SCHEDULE I to the

Guarantee Agreement 

INITIAL GUARANTORS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name of Guarantor

 	
  

 	
  

 	
 Jurisdiction of
 Organization

 	
  

 
	
 Engineered Polymer
 Solutions, Inc.

 	
  

 	
 Delaware

 
	
 Valspar Finance
 Corporation

 	
  

 	
 Minnesota

 
	
 Valspar Coatings Finance
 Corporation

 	
  

 	
 Minnesota

 
	
 Valspar Sourcing, Inc.

 	
  

 	
 Minnesota

 
	
 Valspar Credit Corporation

 	
  

 	
 Minnesota

 

ANNEX 1 to the

Guarantee Agreement 

          SUPPLEMENT
NO. [       ] dated as of
[       ], to the Guarantee Agreement dated
as of June __, 2009, among each of the subsidiaries of THE VALSPAR CORPORATION,
a Delaware corporation (the “Company”),
party thereto (each such subsidiary individually a “Guarantor”, and collectively the “Guarantors”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as
administrative agent (the “Administrative Agent”)
for the Lenders (each as defined in the Credit Agreement referred to below). 

          A.
Reference is made to the Three-Year Credit Agreement dated as of June __, 2009
(as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Company, the
Borrowing Subsidiaries from time to time party thereto, the lenders from time
to time party thereto (the “Lenders”),
Wells Fargo Bank, National Association, as Administrative Agent and an Issuing
Bank, Wachovia Bank, National Association, as an Issuing Bank and Bank of
America, N.A., as Syndication Agent. Capitalized terms used herein and not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. 

          B. The
Guarantors have entered into the Guarantee Agreement in order to induce the
Lenders to make Revolving Loans and the Issuing Bank to issue Letters of
Credit. Pursuant to Section 5.22 of the Credit Agreement, each Domestic
Material Subsidiary of the Company that was not in existence or not a Domestic
Material Subsidiary on the date of the Credit Agreement is required to enter
into the Guarantee Agreement as a Guarantor upon becoming a Domestic Material
Subsidiary. Section 19 of the Guarantee Agreement provides that additional
Subsidiaries of the Company may become Guarantors under the Guarantee Agreement
by execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary of the Company (the “New
Guarantor”) is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Guarantor under the Guarantee
Agreement in order to induce the Lenders to make additional Revolving Loans and
the Issuing Bank to issue additional Letters of Credit and as consideration for
Revolving Loans previously made and Letters of Credit previously issued. 

          Accordingly,
the Administrative Agent and the New Guarantor agree as follows: 

          SECTION
1. In accordance with Section 19 of the Guarantee Agreement, the New Guarantor
by its signature below becomes a Guarantor under the Guarantee Agreement with
the same force and effect as if originally named therein as a Guarantor and the
New Guarantor hereby (a) agrees to all the terms and provisions of the
Guarantee Agreement applicable to it as a Guarantor thereunder and (b)
represents and warrants that the representations and warranties made by it as a
Guarantor thereunder are true and correct on and as of the date hereof. Each
reference to a “Guarantor” in the Guarantee Agreement shall be deemed to
include the New Guarantor. The Guarantee Agreement is hereby incorporated
herein by reference. 

          SECTION
2. The New Guarantor represents and warrants to the Administrative Agent and
the Lenders that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law. 

          SECTION
3. This Supplement may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Administrative
Agent shall have received counterparts of this Supplement that, when taken
together, bear the signatures of the New Guarantor and the Administrative
Agent. Delivery of an executed signature page to this Supplement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart of this Supplement. 

          SECTION
4. Except as expressly supplemented hereby, the Guarantee Agreement shall
remain in full force and effect. 

          SECTION
5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

          SECTION
6. In case any one or more of the provisions contained in this Supplement
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and in
the Guarantee Agreement shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision hereof in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties hereto shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions. 

          SECTION
7. All communications and notices hereunder shall be in writing and given as
provided in Section 13 of the Guarantee Agreement. All communications and
notices hereunder to the New Guarantor shall be given to it in care of the
Company. 

          SECTION
8. The New Guarantor agrees to reimburse the Administrative Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, disbursements and other charges of counsel for the
Administrative Agent. 

          IN
WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly
executed this Supplement to the Guarantee Agreement as of the day and year
first above written. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 [NAME OF NEW GUARANTOR],
 as a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO BANK, NATIONAL
 ASSOCIATION,

 
	
  

 	
 as Administrative Agent,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

EXHIBIT G 

[FORM OF INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT]

          INDEMNITY,
SUBROGATION AND CONTRIBUTION AGREEMENT, dated as of June __, 2009, among THE
VALSPAR CORPORATION, a Delaware corporation (the “Company”), each of the subsidiaries of the Company listed on
Schedule I hereto (each such subsidiary individually a “Guarantor”, and collectively the “Guarantors”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as administrative agent (the “Administrative
Agent”) for the Lenders (each as defined in the Credit Agreement
referred to below). 

          Reference
is made to the Three-Year Credit Agreement dated as of June __, 2009 (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Company, the
Borrowing Subsidiaries from time to time party thereto, the lenders from time
to time party thereto (the “Lenders”),
Wells Fargo Bank, National Association, as Administrative Agent and an Issuing
Bank, Wachovia Bank, National Association, as an Issuing Bank and Bank of
America, N.A., as Syndication Agent. Capitalized terms used herein and not
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. 

          The
Lenders and the Issuing Bank, respectively, have agreed to make Revolving Loans
to and issue Letters of Credit for the account of the Borrowers pursuant to,
and upon the terms and subject to the conditions specified in, the Credit
Agreement. The Guarantors have guaranteed such Revolving Loans and the other
Obligations (as defined in the Guarantee Agreement) of the Borrowers under the
Credit Agreement or any other Loan Document pursuant to the Guarantee
Agreement. The obligations of the Lenders to make Revolving Loans and of the
Issuing Bank to issue Letters of Credit are conditioned on, among other things,
the execution and delivery by the Company and the Guarantors of an agreement in
the form hereof. 

          Accordingly,
the Company, each Guarantor and the Administrative Agent agree as follows: 

          SECTION
1. Indemnity and Subrogation. In
addition to all such rights of indemnity and subrogation as the Guarantors may
have under applicable law (but subject to Section 3), the Company agrees that
in the event a payment shall be made on behalf of the Company (or on behalf of
any other Borrower) by any Guarantor under the Guarantee Agreement, the Company
shall indemnify such Guarantor for the full amount of such payment and the
Company shall be subrogated to the rights of such Guarantor to whom such
payment shall have been made to the extent of such payment. 

          SECTION
2. Contribution and Subrogation.
Each Guarantor (a “Contributing Guarantor”)
agrees (subject to Section 3) that, in the event a payment shall be made by any
other Guarantor under the Guarantee Agreement to satisfy a claim of the
Administrative Agent or any Lender and such other Guarantor (the “Claiming Guarantor”) shall not have been
fully indemnified by the Company as provided in Section 1, the Contributing
Guarantor shall indemnify the Claiming Guarantor in an amount equal to the
amount of such payment multiplied by a fraction of which the numerator shall be
the net worth of the Contributing Guarantor on the date hereof (or, in the case
of any Guarantor becoming a party hereto pursuant to Section 12, the date of
the Supplement hereto executed and delivered by such Guarantor) and the
denominator shall be the aggregate net worth of all the Guarantors on the date
hereof (or, in the case of any Guarantor becoming a party hereto pursuant to
Section 12, the date of the Supplement hereto executed and delivered by such
Guarantor). Any Contributing Guarantor making any payment to a Claiming
Guarantor pursuant to this Section 2 shall be subrogated to the rights of such
Claiming Guarantor under Section 1 to the extent of such payment. 

          SECTION
3. Subordination. Notwithstanding
any provision of this Agreement to the contrary, all rights of the Guarantors
under Sections 1 and 2 and all other rights of indemnity, contribution or 

subrogation under applicable
law or otherwise shall be fully subordinated to the indefeasible payment in
full in cash of the Obligations. No failure on the part of the Company or any
other Guarantor to make the payments required by Sections 1 and 2 (or any other
payments required under applicable law or otherwise) shall in any respect limit
the obligations and liabilities of any Guarantor with respect to its
obligations hereunder, and each Guarantor shall remain liable for the full
amount of the obligations of such Guarantor hereunder. 

          SECTION
4. Termination. This Agreement
shall survive and be in full force and effect so long as any Obligation is
outstanding and has not been indefeasibly paid in full in cash, any Lender has
a further commitment to lend under the Credit Agreement or any Letter of Credit
is outstanding, and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Administrative Agent, any Lender
or any Guarantor upon the bankruptcy or reorganization of any Borrower, any
other Guarantor or otherwise. Any Guarantor shall cease to be a party to this
Agreement and to be bound hereby at such time as it shall be released from its
Guarantee in accordance with the provisions of the Guarantee Agreement. 

          SECTION
5. GOVERNING LAW. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK. 

          SECTION
6. No Waiver; Amendment. 

          (a)
No failure on the part of the Administrative Agent, any Lender or any Guarantor
to exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or remedy by the Administrative Agent, any Lender or any
Guarantor preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law. None of the Administrative
Agent, any Lender and the Guarantors shall be deemed to have waived any rights
hereunder unless such waiver shall be in writing and signed by such parties. 

          (b)
Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into between the
Company, the Guarantors and the Administrative Agent, with the prior written
consent of the Lenders or the Required Lenders if required under the Credit
Agreement. 

          SECTION
7. Notices. All communications
and notices hereunder shall be in writing and given as provided in the
Guarantee Agreement and addressed as specified therein. 

          SECTION
8. Binding Agreement; Assignments.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and permitted assigns of
such party; and all covenants, promises and agreements by or on behalf of the
parties that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and permitted assigns. No Guarantor may
assign or transfer any of its rights or obligations hereunder (and any such
attempted assignment or transfer shall be void) without the prior written
consent of the Required Lenders. Notwithstanding the foregoing, at the time any
Guarantor is released from its obligations under the Guarantee Agreement in
accordance with such Guarantee Agreement and the Credit Agreement, such
Guarantor will cease to have any rights or obligations under this Agreement. 

          SECTION
9. Survival of Agreement; Severability.

          (a)
All covenants and agreements made by the Company and each Guarantor herein and
in the certificates or other instruments prepared or delivered in connection
with this Agreement or the other Loan Documents shall be considered to have
been relied upon by the Administrative Agent, the Issuing Bank, the Lenders and
each Guarantor and shall survive the making by the Lenders of the Revolving
Loans and the issuance by the Issuing Bank of Letters of Credit and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Revolving Loans or any other fee or amount payable under the
Credit Agreement or this Agreement or under any of the other Loan Documents or
in respect of any Letter of Credit is outstanding and unpaid, the Revolving
Commitments have not been terminated or any Letter of Credit is outstanding. 

          (b)
In case any one or more of the provisions contained in this Agreement should be
held invalid, illegal or unenforceable in any respect, no party hereto shall be
required to comply with such provision for so long as such provision is held to
be invalid, illegal or unenforceable, but the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby (it being understood that the invalidity of
a particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions. 

          SECTION
10. Counterparts. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. This Agreement shall be
effective with respect to any Guarantor or the Company when a counterpart
bearing the signature of such Guarantor or the Company, as the case may be,
shall have been delivered to the Administrative Agent. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement. 

          SECTION
11. Rules of Interpretation. The
rules of interpretation specified in Section 1.03 of the Credit Agreement shall
be applicable to this Agreement. 

          SECTION
12. Additional Guarantors.
Pursuant to Section 5.22 of the Credit Agreement, each Domestic Material
Subsidiary of the Company that was not in existence or was not such a Domestic
Material Subsidiary on the date of the Credit Agreement is required to enter
into this Agreement as a Guarantor upon becoming a Domestic Material
Subsidiary. Upon execution and delivery, after the date hereof, by the
Administrative Agent and such a Subsidiary of an instrument in the form of
Annex 1 hereto, such Subsidiary shall become a party hereto with the same force
and effect as if originally named as a party hereto. The execution and delivery
of any instrument adding an additional Domestic Material Subsidiary as a party
to this Agreement shall not require the consent of any other party hereto. The
rights and obligations of each party hereto shall remain in full force and
effect notwithstanding the addition of any new Domestic Material Subsidiary as
a party to this Agreement. 

          SECTION
13. Jurisdiction; Consent to Service of
Process. 

          (a)
The Company and each Guarantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or any other Loan Document, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by

law, in such Federal court.
Each of the parties hereto agrees that a final, nonappealable judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right
that the Administrative Agent, the Syndication Agent or any other Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against any Guarantor or its properties in the courts
of any jurisdiction. 

          (b)
The Company and each Guarantor hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any such New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court. 

          (c)
Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 7. Nothing in this Agreement or any
other Loan Document will affect the right of any party to this Agreement or any
other Loan Document to serve process in any other manner permitted by law. 

          SECTION
14. WAIVER OF JURY
TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION. 

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE VALSPAR CORPORATION

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ENGINEERED POLYMER
 SOLUTIONS, INC.,

 
	
  

 	
 as a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR FINANCE
 CORPORATION,

 
	
  

 	
 as a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR COATINGS FINANCE
 CORPORATION,

 
	
  

 	
 as a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR SOURCING, INC., as
 a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 VALSPAR CREDIT CORPORATION,
 as a Guarantor,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO BANK, NATIONAL
 ASSOCIATION,

 
	
  

 	
 as Administrative Agent,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 

SCHEDULE I

to the Indemnity, Subrogation

and Contribution Agreement 

INITIAL GUARANTORS

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name of Guarantor

 	
  

 	
  

 	
 Jurisdiction of
 Organization

 	
  

 
	
 Engineered Polymer
 Solutions, Inc.

 	
  

 	
 Delaware

 
	
 Valspar Finance
 Corporation

 	
  

 	
 Minnesota

 
	
 Valspar Coatings Finance
 Corporation

 	
  

 	
 Minnesota

 
	
 Valspar Sourcing, Inc.

 	
  

 	
 Minnesota

 
	
 Valspar Credit Corporation

 	
  

 	
 Minnesota

 

ANNEX 1 to

the Indemnity, Subrogation and

Contribution Agreement 

          SUPPLEMENT
NO. [       ] dated as of
[       ], to the Indemnity, Subrogation and
Contribution Agreement dated as of June __, 2009 (as the same may be amended,
supplemented or otherwise modified from time to time, the “Indemnity, Subrogation and Contribution Agreement”),
among THE VALSPAR CORPORATION, a Delaware corporation (the “Company”), each of the subsidiaries of the
Company party thereto (each such subsidiary individually a “Guarantor”, and collectively the “Guarantors”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION, as administrative agent (the “Administrative Agent”) for the Lenders (each as defined in
the Credit Agreement referred to below). 

          A.
Reference is made to the Three-Year Credit Agreement dated as of June __, 2009
(as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among the Company, the
Borrowing Subsidiaries from time to time party thereto, the lenders from time
to time party thereto (the “Lenders”),
Wells Fargo Bank, National Association, as Administrative Agent and an Issuing
Bank, Wachovia Bank, National Association, as an Issuing Bank and Bank of
America, N.A., as Syndication Agent. 

          B.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Indemnity, Subrogation and Contribution
Agreement and the Credit Agreement. 

          C.
The Company and the Guarantors have entered into the Indemnity, Subrogation and
Contribution Agreement in order to induce the Lenders to make Revolving Loans
and the Issuing Bank to issue Letters of Credit. Pursuant to Section 5.22 of
the Credit Agreement, each Domestic Material Subsidiary of the Company that was
not in existence or was not a Domestic Material Subsidiary on the date of the
Credit Agreement is required to enter into this Agreement as a Guarantor upon
becoming a Domestic Material Subsidiary. Notwithstanding the foregoing, a Domestic
Material Subsidiary shall not be required to become a Guarantor under this
Indemnity, Subrogation and Contribution Agreement if it would be a violation of
applicable law for such Domestic Material Subsidiary to take such action or if,
in the judgment of the Administrative Agent, in consultation with the Company,
the expense, tax or regulatory consequences or difficulty of taking such action
would not, in light of the benefits to accrue to the Lenders, justify taking
such action. Section 12 of the Indemnity, Subrogation and Contribution
Agreement provides that additional Subsidiaries of the Company may become
Guarantors under the Indemnity, Subrogation and Contribution Agreement by
execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary of the Company (the “New
Guarantor”) is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Guarantor under the Indemnity,
Subrogation and Contribution Agreement in order to induce the Lenders to make
additional Revolving Loans and the Issuing Bank to issue additional Letters of
Credit and as consideration for Revolving Loans previously made and Letters of
Credit previously issued. 

          Accordingly,
the Administrative Agent and the New Guarantor agree as follows: 

          SECTION
1. In accordance with Section 12 of the Indemnity, Subrogation and Contribution
Agreement, the New Guarantor by its signature below becomes a Guarantor under
the Indemnity, Subrogation and Contribution Agreement with the same force and
effect as if originally named therein as a Guarantor and the New Guarantor
hereby agrees to all the terms and provisions of the Indemnity, Subrogation and
Contribution Agreement applicable to it as a Guarantor thereunder. Each
reference to a “Guarantor” in the Indemnity, Subrogation and Contribution
Agreement shall be deemed to include the New Guarantor. The Indemnity,
Subrogation and Contribution Agreement is hereby incorporated herein by
reference. 

          SECTION
2. The New Guarantor represents and warrants to the Administrative Agent and
the Lenders that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law. 

          SECTION
3. This Supplement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This Supplement
shall become effective when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of the New Guarantor and the Administrative Agent. Delivery of an executed
signature page to this Supplement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Supplement. 

          SECTION
4. Except as expressly supplemented hereby, the Indemnity, Subrogation and
Contribution Agreement shall remain in full force and effect. 

          SECTION
5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

          SECTION
6. In the event that any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect,
neither party hereto shall be required to comply with such provision for so
long as such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein and in the Indemnity, Subrogation and Contribution Agreement shall not
in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties hereto shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions. 

          SECTION
7. All communications and notices hereunder shall be in writing and given as
provided in Section 7 of the Indemnity, Subrogation and Contribution Agreement.
All communications and notices hereunder to the New Guarantor shall be given to
it at the address set forth under its signature. 

          SECTION
8. The New Guarantor agrees to reimburse the Administrative Agent for its
reasonable out-of-pocket expenses in connection with this Supplement, including
the reasonable fees, other charges and disbursements of counsel for the
Administrative Agent. 

          IN
WITNESS WHEREOF, the New Guarantor and the Administrative Agent have duly executed
this Supplement to the Indemnity, Subrogation and Contribution Agreement as of
the day and year first above written. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 [NAME OF NEW GUARANTOR],

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO BANK, NATIONAL
 ASSOCIATION,

 
	
  

 	
 as Administrative Agent,

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 	
 Title:Exhibit 10.2 to The Valspar Corporation Form 10-Q for period ended January 29, 2010

Exhibit 10.2

FIRST AMENDMENT TO CREDIT AGREEMENT 

          THIS
FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of the
17th day of August, 2009 (this “First Amendment”), is entered into among
The Valspar Corporation, a Delaware corporation (the “Company”), the
Lenders (as defined in the hereinafter defined Credit Agreement) party hereto,
and Wells Fargo Bank, National Association, as administrative agent for the
Lenders (the “Administrative Agent”).

RECITALS

          A.
The Company, the Borrowing Subsidiaries party thereto, the Lenders and the
Administrative Agent are parties to that certain Three-Year Credit Agreement
dated as of June 30, 2009 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”). Capitalized terms
used herein without definition shall have the meanings given to them in the
Credit Agreement as they may be amended pursuant to this First Amendment.

          B.
The Company, the Administrative Agent and the Required Lenders have agreed to
make certain amendments to the Credit Agreement on the terms and conditions set
forth herein.

STATEMENT
OF AGREEMENT

          NOW,
THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE
I

AMENDMENTS
TO CREDIT AGREEMENT

          1.1
Amendments to Section 1.1 Consisting of New Definitions. The following
definitions are hereby added to Section 1.1 of the Credit Agreement in
appropriate alphabetical order:

	
  

 	
  

 
	
  

 	
           “‘First
 Amendment’ shall mean the First Amendment to Credit Agreement, dated as
 of August 17, 2009, among the Company, the Lenders party thereto, and the
 Administrative Agent.”

 
	
  

 	
  

 
	
  

 	
           “‘First
 Amendment Effective Date’ has the meaning given to such term in Article
 III to the First Amendment.”

 

          1.2
Amendments to Section 1.1 Consisting of Modifications to Existing
Definitions. The following definition in Section 1.1 of the Credit
Agreement is hereby amended in its entirety as follows:

	
  

 	
  

 
	
  

 	
           “‘Lenders’
 means the Persons listed on Schedule 2.01 and any other Person that
 shall have become a party hereto pursuant to either a joinder agreement
 pursuant to Section 2.23(c)(i) or an Assignment and Assumption, other than
 any such Person that shall have ceased to be a party hereto pursuant to an
 Assignment and Assumption.”

 

          1.3
Amendments to Section 2.23 (Increase in Revolving Commitments). 

	
  

 	
  

 
	
  

 	
           (a)
 The introductory clause in Section 2.23(a) of the Credit Agreement is hereby
 amended in its entirety as follows:

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 “From time
 to time on and after the Effective Date and prior to the date of termination
 of the Revolving Commitments but not more than 2 times during any 12-month
 period,”

 
	
  

 	
  

 	
  

 
	
  

 	
           (b)
 Section 2.23(a) of the Credit Agreement is hereby amended by replacing the
 figure “$15,000,000” on the 5th line thereof, and substituting
 therefor the figure “$10,000,000”.

 

ARTICLE
II

WAIVER

          The
Company has notified the Administrative Agent that Chang Hwa Commercial Bank,
Ltd., Los Angeles Branch desires to join the Credit Agreement as a Lender with
a Revolving Commitment of $10,000,000, and the Required Lenders, by their
execution hereof, hereby waive the requirement in Section 2.23(a) of the Credit
Agreement of at least 30 days prior notice of the increase of the aggregate
amount of the Revolving Commitment resulting from the joinder of Chang Hwa
Commercial Bank, Ltd., Los Angeles Branch to the Credit Agreement. Except as expressly
set forth herein, this waiver shall not by implication or otherwise limit,
impair, constitute a waiver of, or otherwise affect the rights and remedies of
the Lenders, the Issuing Banks, the Administrative Agent or the Borrowers under
the Credit Agreement or any other Loan Document, and shall not alter, modify,
amend or in any way affect any of the terms, conditions, obligations, covenants
or agreements contained in the Credit Agreement or any other Loan Document, all
of which are ratified and affirmed in all respects and shall continue in full
force and effect. Nothing herein shall be deemed to entitle the Borrowers to a
consent to, or a waiver, amendment, modification or other change of, any of the
terms, conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document in similar or different circumstances.

ARTICLE
III

CONDITIONS
OF EFFECTIVENESS

          This
First Amendment shall become effective as of the date (such date being referred
to as the “First Amendment Effective Date”) on which the Administrative
Agent shall have received, dated as of the First Amendment Effective Date, an
executed counterpart hereof from the Company and the Required Lenders.

ARTICLE
IV

REPRESENTATIONS
AND WARRANTIES

          The
Company (on behalf of itself and its Subsidiaries) represents and warrants to
the Administrative Agent, the Issuing Banks and the Lenders that (i) the
representations and warranties contained in the Credit Agreement and the other
Loan Documents are true and correct in all material respects on and as of the
First Amendment Effective Date, both immediately before and after giving effect
to this First Amendment (except to the extent any such representation or
warranty is expressly stated to have been made as of a specific date, in which
case such representation or warranty shall be true and correct in all material
respects as of such date), (ii) this First Amendment has been duly authorized,
executed and delivered by the Company and constitutes the legal, valid and
binding obligation of the Company and the Borrowing Subsidiaries enforceable
against them in accordance with its terms, and (iii) no Default or Event of
Default shall have occurred and be continuing on the First Amendment Effective
Date, both immediately before and after giving effect to this First Amendment.

2

ARTICLE
V

ACKNOWLEDGEMENT
AND CONFIRMATION OF THE COMPANY

          The
Company hereby confirms and agrees, on behalf of itself and the Borrowing
Subsidiaries, that after giving effect to this First Amendment, the Credit
Agreement and the other Loan Documents remain in full force and effect and
enforceable against each Borrower in accordance with their respective terms and
shall not be discharged, diminished, limited or otherwise affected in any
respect, and the amendments contained herein shall not, in any manner, be
construed to constitute payment of, or impair, limit, cancel or extinguish, or
constitute a novation in respect of, the Obligations of any Borrower evidenced
by or arising under the Credit Agreement and the other Loan Documents, which
shall not in any manner be impaired, limited, terminated, waived or released,
but shall continue in full force and effect. The Company represents and
warrants to the Lenders on behalf of itself and the Borrowing Subsidiaries that
it has no knowledge of any claims, counterclaims, offsets, or defenses to or
with respect to its obligations under the Loan Documents, or if any Borrower
has any such claims, counterclaims, offsets, or defenses to the Loan Documents
or any transaction related to the Loan Documents, the same are hereby waived,
relinquished, and released in consideration of the execution of this First
Amendment. This acknowledgement and confirmation by the Company is made and
delivered to induce the Administrative Agent and the Lenders to enter into this
First Amendment, and the Company acknowledges that the Administrative Agent and
the Lenders would not enter into this First Amendment in the absence of the
acknowledgement and confirmation contained herein.

ARTICLE
VI

MISCELLANEOUS

          6.01
Governing Law. This First Amendment shall be governed by and construed
and enforced in accordance with the laws of the State of New York.

          6.02
Full Force and Effect. Except as expressly amended hereby, the Credit
Agreement shall continue in full force and effect in accordance with the
provisions thereof on the date hereof. As used in the Credit Agreement,
“hereinafter,” “hereto,” “hereof,” and words of similar import shall, unless
the context otherwise requires, mean the Credit Agreement after amendment by
this First Amendment. Any reference to the Credit Agreement or any of the other
Loan Documents herein or in any such documents shall refer to the Credit
Agreement and Loan Documents as amended hereby. This First Amendment is limited
as specified and shall not constitute or be deemed to constitute an amendment,
modification or waiver of any provision of the Credit Agreement except as
expressly set forth herein. This First Amendment shall constitute a Loan
Document under the terms of the Credit Agreement.

          6.03
Expenses. The Company agrees on demand (i) to pay all reasonable fees
and expenses of counsel to the Administrative Agent, and (ii) to reimburse the
Administrative Agent for all reasonable out-of-pocket costs and expenses, in
each case, in connection with the preparation, negotiation, execution and
delivery of this First Amendment and the other Loan Documents delivered in
connection herewith.

          6.04
Severability. To the extent any provision of this First Amendment is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction, without prohibiting or
invalidating such provision in any other jurisdiction or the remaining
provisions of this First Amendment in any jurisdiction.

          6.05
Successors and Assigns. This First Amendment shall be binding upon,
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto.

3

          6.06
Construction. The headings of the various sections and subsections of
this First Amendment have been inserted for convenience only and shall not in
any way affect the meaning or construction of any of the provisions hereof.

          6.07
Counterparts. This First Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this First Amendment by telecopy or by
electronic mail in a .pdf or similar file shall be effective as delivery of a
manually executed counterpart of this First Amendment. A complete set of
counterparts shall be lodged with the Company and the Administrative Agent.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY
LEFT BLANK]

4

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

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 THE VALSPAR
 CORPORATION

 
	
  

 	
  

 
	
  

 	
  

 	
 by

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 	
 Tyler Treat

 
	
  

 	
  

 	
  

 	
 Title:

 	
 Treasurer 

 

	
  

 	
  

 	
  

 
	
  

 	
 WELLS FARGO
 BANK, NATIONAL

 
	
  

 	
 ASSOCIATION, as
 Administrative Agent, an

 
	
  

 	
 Issuing
 Bank, and a Lender

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
   Name:
 

 
	
  

 	
  

 	
   Title:

 

	
  

 	
  

 	
  

 
	
  

 	
 BANK OF AMERICA, N.A.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 Deutsche Bank AG New York Branch

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 THE BANK OF
 TOKYO-MITSUBISHI UFJ,

 
	
  

 	
 LTD., as a
 Lender

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 PNC Bank,
 National Association

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 Commonwealth
 Bank of Australia

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 Comerica
 Bank

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 Title:

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