Document:

Exhibit 10.50

 

CHANGE
OF CONTROL SEVERANCE AGREEMENT

 

This Change of Control
Severance Agreement is entered into between GENERAL
MOLY, INC., a Delaware corporation (the “Company”)
and Lee M. Shumway (“Employee”)
to be effective as of March 16, 2009 (the “Effective
Date”).  Certain
capitalized terms used in this Agreement are defined in Section 4 below.

 

RECITALS

 

A.            The Company has
retained Employee to perform services that are important to the long-term
success of the Company.

 

B.            The Board of
Directors of the Company believes that it is in the best interests of the
Company and its shareholders to provide Employee with enhanced financial
security and sufficient encouragement to remain with the Company during this
stage of the Company’s operations notwithstanding the employment uncertainties
related to a possible Change of Control of the Company.

 

C.            By execution of this
Agreement, Employee and the Company agree that this Agreement contains the
entire agreement between the parties hereto and supersedes all prior agreements
(oral or written), negotiations and discussions between the Company and
Employee regarding the obligations of the Company upon a Change of Control of
the Company.

 

AGREEMENT

 

In consideration of the
foregoing and the mutual promises and covenants set forth below, the parties
agree as follows:

 

1.             Term of Agreement.  The term of this Agreement shall commence as
of the Effective Date and shall terminate automatically on the earlier of (a) December 31,
2011 or (b) the date Employee terminates employment with the Company (the “Term”) unless the parties, prior to the
end of the Term, enter into a written agreement renewing or extending this
Agreement.

 

2.             Severance Pay.  If a Change of Control event occurs, and as a
result of the closing of the Change of Control, or during the one-year period
following the closing of the Change of Control (i) the Company (or its
successor) terminates Employee’s employment without Cause or (ii) Employee
terminates employment for Good Reason during such one year period, Employee
will be entitled to Severance Pay.  To be
entitled to Severance Pay, Employee must first execute a binding termination
release agreement in a form specified by the Company.  Severance Pay will be in addition to any
accrued but unpaid salary or vacation earned through the date of Employee’s
termination.

 

The amount of Employee’s
Severance Pay will be determined as the sum of (a) an amount equal to
two (2) times Employee’s annual base salary (as in effect immediately
prior to the closing of the Change of Control), plus (b) an amount equal
to 100% of Employee’s target annual bonus for one year (as in effect
immediately prior to the closing of the Change of Control), if 

 

 

any,
less applicable withholdings. In addition, all outstanding stock-based awards
granted to Employee prior to the Change of Control shall have their vesting and
exercisability accelerated in full upon the effective date of the closing of
the Change of Control regardless of whether Employee has terminated employment.

 

3.                                       Time and Form of Payment.  The Severance Pay
shall be paid in a lump sum, on a date determined by the Company (or its
successor), provided the release has been executed and is effective and
non-revocable, within 60 days following Employee’s separation from service,
except as required by Section 5(a).

 

4.                                       Certain Definitions.  For purposes of
this Agreement the following terms shall have the following meanings:

 

(a)           “Cause” means, unless
otherwise expressly defined in an employment or other agreement between the Company
and Employee, a willful failure to perform Employee’s duties, insubordination,
theft, dishonesty (as such terms are defined by the Company in good faith),
conviction of a felony or any other willful conduct that is materially
detrimental to the Company or such other cause as the Company in good faith
reasonably determines provides cause for the discharge of Employee.

 

(b)                                 “Change
of Control” means:

 

(1)           The
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
50% or more of either (A) the then-outstanding shares of common stock of
the Company (the “Outstanding Company Common Stock”) or (B) the combined
voting power of the then-outstanding voting securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting Securities”);
provided, however,
that, for purposes of this paragraph (1), the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly from the
Company, (ii) any acquisition by the Company, or (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any affiliated company; or

 

(2)           Consummation
of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Company or the acquisition of
assets or stock of another entity by the Company (each, a “Business Combination”), in each case
unless, following such Business Combination, (A) all or substantially all
of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common stock and
the combined voting power of the then-outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation that, as a result of such transaction, owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as
their ownership immediately prior to such Business Combination of the
Outstanding Company 

 

2

 

Common
Stock and the Outstanding Company Voting Securities, as the case may be, and (B) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 50% or more of, respectively, the then-outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to the
Business Combination; or

 

(3)           Individuals
who, as of the date hereof, constitute the Board of Directors of the Company
(the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board; or

 

(4)           A
sale or disposition of all or substantially all of the operating assets of the
Company to an unrelated party; or

 

(5)           Approval
by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

 

(c)                                  “Good
Reason” means a material negative change in the service
relationship as determined in good faith by Employee of the occurrence of any
of the following conditions, without Employee’s express written consent (i) a
material diminution in Employee’s base compensation; (ii) a material
diminution in Employee’s authority, duties, or responsibilities; (iii) a
material change of more than 50 miles in the geographic location at which
Employee is required to perform the services; or (iv) any action or
inaction that constitutes a material breach by the Company (or its successor)
of any agreement under which Employee provides services to the Company (or its
successor).  Employee shall provide
written notice of Good Reason to the Company (or its successor) within
30 days of the initial occurrence of the condition.

 

5.                                      Section 409A; Deferred Compensation.

 

(a)                                  Delay in Payment.  Notwithstanding
anything in this Agreement to the contrary, if Employee is deemed by the
Company (or its successor) be a “specified employee,” the Severance Pay shall
not be paid until the date which is the first business day following the
six-month period after Employee’s separation from service (or if earlier,
Employee’s death).  Such delay in payment
shall only be effected to the extent required to avoid adverse tax treatment to
Employee under Section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A”).  Any payment not subject to such delay, shall
be paid pursuant to the time and form of payment specified above.  Any compensation which would have otherwise
been paid 

 

3

 

during
the delay period shall be paid to Employee (or Employee’s beneficiary or
estate) in a lump sum payment on the first business day following the
expiration of the delay period.

 

(b)           Key Definitions.  For purposes of the Agreement, the term “termination
of employment” shall mean “separation from service” as defined in Section 409A.

 

(c)           Interpretation.  The parties intend that all payments payable
under this Agreement will not be subject to the additional tax imposed by Section 409A,
and the provisions of this Agreement shall be construed and administered
consistent with such intent.  To the
extent such potential payments could become subject to Section 409A, the Company
(or its successor) and Employee agree to work together to modify the Agreement
to the minimum extent necessary to reasonably comply with the requirements of Section 409A,
provided that the Company (or its successor) shall not be required to pay Employee’s
taxes or additional compensation.

 

6.             At-Will Employment.  This Agreement does not modify Employee’s
status as an employee-at-will. The parties acknowledge that Employee is an
employee-at-will and that Employee’s services may be terminated by the Company
at any time with or without Cause.

 

7.             Rights Not Alienable.  Any rights provided to Employee under the
terms of this Agreement shall not be assigned, transferred or alienated, except
by will or pursuant to the laws of descent and distribution.

 

8.             Entire Agreement.  This Agreement contains the entire agreement
between the parties hereto and supersedes all prior agreements (oral or
written), negotiations and discussions between the Company and Employee.

 

9.             Amendment. 
This Agreement may only be amended by written agreement of the Company
and Employee.

 

10.           Governing Law.  This Agreement shall be administered,
interpreted and enforced in accordance with the substantive laws of the State
of Colorado, without regard to its provisions on conflict of laws.

 

[remainder
of page intentionally blank — signature page follows]

 

4

 

IN WITNESS WHEREOF, the
parties have executed this Agreement on the dates set forth below to be
effective as of the Effective Date.

 

	
   

  	
   

  	
  GENERAL
  MOLY, INC.

  
	
   

  	
   

  	
  The
  Company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  David Chaput

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  

 

 

	
   

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Lee M. Shumway

  
	
   

  	
   

  	
   

  	
  Lee
  M. Shumway

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  3/16/09

  

 

 

[Signature
Page to Change Of Control Severance Agreement]Exhibit
4.3

 

Execution

 

SECOND AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT

 

This SECOND AMENDED AND
RESTATED REVOLVING CREDIT AGREEMENT is made and entered into as of December 7,
2005 by and among QUAD/GRAPHICS, INC., a Wisconsin corporation (the “Company”),
QUAD/TECH, INC., a Wisconsin corporation (“Quad/Tech”), DUPLAINVILLE
TRANSPORT, INC., a Wisconsin corporation (“DuPlainville”),
QUAD/CREATIVE, LLC., a Delaware limited liability company (“Quad/Creative”),
CHEMICAL RESEARCH/TECHNOLOGY CO., a Wisconsin general partnership (“Chemical
Partnership”), QUAD/WEST, INC., a Delaware corporation (“Quad/West”),
THE QUAD TECHNOLOGY GROUP, INC., a Wisconsin corporation (“Quad/Technology”),
QUAD/MED, LLC., a Delaware limited liability company (“Quad/Med”),
QUAD/TECH EAST, INC. (f/k/a Quad/Electric, Inc.), a Wisconsin corporation
(“QT East”), SILVER SPRING REALTY, INC., a Wisconsin corporation (“Silver
Spring”), P-DIRECT, LLC (f/k/a Parcel/Direct, Inc.), a Wisconsin
limited liability company (“Parcel/Direct”), GRAPHIC SERVICES, INC., a
Delaware corporation (“Graphic Services”), CHILD DAY CARE AND LEARNING
SERVICES, INC., a Wisconsin corporation (“CDCLS”), Imaging Technology
Group, Inc., a Delaware corporation (“ITG”), Graphic Imaging Technology,
LLC, a Delaware limited liability company (“GIT”), Graphic Prepress and Imaging
Technology, LP, a Texas limited partnership (“GPIT”), QUAD/AIR, LLC (f/k/a Quad
Air, Inc.), a Wisconsin limited liability company (“Quad Air”),
Quad/Greenfield, LLC, a Wisconsin limited liability company (“QGreenfield”),
QUADSYSTEMS, INC., a Wisconsin corporation (“Systems”), QUAD TRANSPORTATION
SERVICES, LLC, a Wisconsin limited liability company (“QTS”), and QUAD/MED
MISSOURI, INC., a Delaware corporation (“QMM”) (the Company, Quad/Tech,
DuPlainville, Quad/Creative, Chemical Partnership, Quad/West, Quad/Technology,
Quad/Med, QT East, Silver Spring, Parcel/Direct, Graphic Services, CDCLS, ITG,
GIT, GPIT, Quad Air, Qgreenfield, Systems, QTS and QMM are collectively
referred to as the “Companies”) (all of the Companies except the Company
are signing below as the initial Restricted Subsidiaries [as defined below]),
U.S. BANK NATIONAL ASSOCIATION (formerly First Bank National Association), a
national banking association (“U.S. Bank”, also the “Lead Arranger”),
JPMORGAN CHASE BANK, N.A. formerly Bank One, NA, a national banking
association) (“JPMChase”, also the “Documentation Agent”), MIZUHO
CORPORATE BANK, LTD. (formerly The Industrial Bank of Japan, Limited) a
Japanese banking corporation (“Mizuho”), WACHOVIA BANK, NATIONAL
ASSOCIATION formerly First Union National Bank, a national banking association
(“Wachovia”, also a “Syndication Agent”), M&I MARSHALL &
ILSLEY BANK, a Wisconsin banking corporation (“M&I”, also a “Syndication
Agent”), SUNTRUST BANK (formerly SUNTRUST BANK, CENTRAL FLORIDA, N.A.), a
Georgia banking corporation (“SunTrust”), and THE NORTHERN TRUST COMPANY (“Northern
Trust”)  (U.S. Bank, JPMChase, Mizuho,
Wachovia, M&I, SunTrust and Northern Trust are hereafter each referred to
as a “Bank” and are collectively referred to as the “Banks”), and
U.S. Bank as administrative agent for the Banks (in such capacity, the “Administrative
Agent”).

 

1

 

W I T N E S S E T H:

 

WHEREAS, certain of the
Companies, certain of their Subsidiaries, and the Banks are parties to that
certain Amended and Restated Credit Agreement dated as of November 1,
2001, as amended by a First Amendment to Amended and Restated Credit Agreement
dated as of September 18, 2003, (as so amended, the “Existing Credit
Agreement”); and

 

WHEREAS, the parties to
the Existing Credit Agreement desire to amend and restate the Existing Credit
Agreement in its entirety and Systems, QTS and QMM desire to join as parties to
the Agreement;

 

NOW, THEREFORE, in
consideration of the premises and other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree that the Existing Credit Agreement be, and it hereby is, amended
and restated in its entirety to read as follows:

 

SECTION 1.  DEFINITIONS

 

1.1.  Defined Terms.  As used in this Agreement, the following
terms shall be defined as set forth below:

 

“Acceptance” shall
mean a Draft that is eligible for discount pursuant to paragraph 7 of Section 13
of the Federal Reserve Act and that has been duly accepted by the
Administrative Agent pursuant to subsection 2.18 hereof.

 

“Acceptance Facility”
shall mean the credit facility granted to the Companies by the Banks pursuant
to subsections 2.1 and 2.18 hereof.

 

“Adjusted Consolidated
Net Worth” shall mean, at any particular time, without duplication, the sum
of Consolidated Net Worth plus the net book value of the Company’s and
its Restricted Subsidiaries’ investment in Unrestricted Subsidiaries.

 

“Adjusted Net Worth”
shall mean, for any Subsidiary of the Company as of any date of determination
thereof, the excess of (i) the amount of the fair saleable value of the
assets of such Subsidiary as of the date of such determination, determined in
accordance with applicable federal and state laws governing determinations of
the insolvency of debtors over (ii) the amount of all liabilities of such
Subsidiary, contingent or otherwise, as of the date of such determination,
determined on the basis provided in clause (i) above.  In determining the Adjusted Net Worth of any
Restricted Subsidiary of the Company for purposes of calculating the Maximum
Liability Amount for such Restricted Subsidiary in respect of any Extension of
Credit, the liabilities of such Restricted Subsidiary to be used in such
determination pursuant to clause (ii) of the foregoing sentence shall in
any event include the liabilities of such Restricted Subsidiary hereunder and
under the other Loan Documents in respect of all Extensions of Credit other
than the Extension of Credit in respect of which such calculation is being
made.

 

“Agreement” shall
mean this Second Amended and Restated Credit Agreement, as the same may be
amended, supplemented or modified from time to time.

 

2

 

“Anniversary Date”
shall mean any anniversary of the Effective Date.

 

“Applicable Fee
Percentage”: shall mean, subject to the last two sentences of this
definition, with respect to the period beginning on the day the compliance
certificate required by Section 5.2(c) for the most recent fiscal
quarter end is delivered and ending on the date the compliance certificate for
the last fiscal month of the next fiscal quarter is required to be delivered,
the “Applicable Fee Percentage” specified in the table below with respect to
each Bank’s Commitment (without regard to usage):

 

	
  Minimum
  Interest

  	
   

  	
  Fee

  	
   

  
	
  Coverage
  Ratio

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than 5.0

  	
   

  	
  .15

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than 4.0 and
  less than or equal to 5.0

  	
   

  	
  .175

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than 3.0 and
  less than or equal to 4.0

  	
   

  	
  .225

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than or equal to
  3.0

  	
   

  	
  .300

  	
  %

  

 

For the period beginning
on the Effective Date and ending on the earlier of the date the compliance
certificate required by Section 5.2(c) with respect to the quarter ending
December 31, 2005 is actually, or is required to be, delivered, the
Applicable Fee Percentage shall be the Applicable Fee Percentage specified
above for a Minimum Interest Coverage Ratio of greater than 5.0 to 1.0.  For any period beginning on a day the
compliance certificate required by Section 5.2(c) with respect to the
last fiscal quarter is required to be, but is not, delivered and ending on the
date such compliance certificate is delivered, the Applicable Fee Percentage
shall be the Applicable Fee Percentage specified above for a Minimum Interest
Coverage Ratio of less than or equal to 3.0 to 1.0.

 

“Applicable Margin”
shall mean, subject to the last three sentences of this definition, with
respect to the period beginning on the day the compliance certificate required
by Section 5.2(c) with respect to the most recent fiscal quarter end
is delivered and ending on the date the compliance certificate with respect to
the last fiscal month of the next fiscal quarter is required to be
delivered,  the “Applicable Margin”
specified in the table below with respect to the Floating Rate or LIBOR Rate,
as appropriate:

 

	
  Minimum
  Interest

  	
   

  	
  LIBOR

  	
   

  	
  Floating

  	
   

  
	
  Coverage
  Ratio

  	
   

  	
  Rate

  	
   

  	
  Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than 5.0

  	
   

  	
  .65

  	
  %

  	
  0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than 4.0 

  	
   

  	
  .800

  	
  %

  	
  0

  	
  %

  

 

3

 

	
  and less than or equal
  to 5.0

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater than 3.0 and
  less than or equal to 4.0

  	
   

  	
  .950

  	
  %

  	
  0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less than or equal to
  3.0

  	
   

  	
  1.250

  	
  %

  	
  0

  	
  %

  

 

For the period beginning
on the Effective Date and ending on the earlier of the date the compliance
certificate required by Section 5.2(c) with respect to the quarter
ending December 31, 2005 is actually, or is required to be, delivered, the
Applicable Margin shall be the Applicable Margin specified above for a Minimum
Interest Coverage Ratio of greater than 5.0 to 1.0.  For any period beginning on a day the
compliance certificate required by Section 5.2(c) with respect to the
last fiscal quarter is required to be, but is not, delivered and ending on the
date such compliance certificate is delivered, the Applicable Margin shall be
the Applicable Margin specified above for a Minimum Interest Coverage Ratio of
less than or equal to 3.0 to 1.0.  The
Applicable Margin shall change as to all outstanding Floating Rate Loans and
Eurodollar Loans on the date of any change in the Applicable Margin described
in this definition.

 

“Available Commitment”
shall mean, as to any Bank, at any time, an amount equal to the remainder of (i) the
amount of such Bank’s Commitment at such time minus (ii) the sum
of, without duplication, (A) the aggregate unpaid principal amount at such
time of all outstanding Revolving Loans made by such Bank hereunder, (B) such
Bank’s Pro Rata Share of the face amount of all Acceptances then outstanding,
and (C) such Bank’s Pro Rata Share of any outstanding obligations to make
payment with respect to Acceptances.

 

“Bid Banker’s
Acceptance” shall mean a draft that is eligible for discount pursuant to
paragraph 7 of section 13 of the Federal Reserve Act and that has been duly
accepted by a Bank pursuant to subsection 2.19(g) hereof.

 

“Bid Banker’s
Acceptance Certificate” shall mean a properly completed certificate
substantially in the form of Exhibit B hereto.

 

“Bid Banker’s
Acceptance Creation Date” shall mean a Business Day on which the creation
of a Bid Banker’s Acceptance occurs or is proposed to occur.

 

“Bid Banker’s
Acceptance Facility” shall mean the credit facility granted by the Banks to
the Company pursuant to subsections 2.1 and 2.19 hereof.

 

“Bid Banker’s
Acceptance Financing” shall mean a financing consisting of the simultaneous
creation of Bid Banker Acceptances from each of the Banks whose offer to create
a Bid Banker’s Acceptance as part of such financing has been accepted by the
Company under the auction bidding procedures described in subsection 2.19
hereof.

 

“Bid Banker’s
Acceptance Obligation” shall mean the obligation of the Companies with
respect to matured Bid Banker’s Acceptances as set forth in subsection 2.19(h) hereof.

 

4

 

“Bid Banker’s
Acceptance Tender” shall have the meaning set forth in subsection 2.19(d) hereof.

 

“Bid Banker’s
Acceptance Tender Request Notice” shall mean a notice in the form of Exhibit C-1
hereto given by the Company pursuant to subsection 2.19(b) hereof.

 

“Bid Loan” shall
mean a loan made by a Bank pursuant to subsection 2.20 hereof.

 

“Bid Loan Facility”
shall mean the credit facility granted by the Banks to the Company pursuant to
subsections 2.1 and 2.20 hereof.

 

“Bid Loan Financing”
shall mean a financing consisting of the simultaneous making of Bid Loans by
each of the Banks whose offer to make a Bid Loan as part of such financing has
been accepted by the Company under the auction bidding procedures described in
subsection 2.20 hereof.

 

“Bid Loan Note”
shall have the meaning set forth in subsection 2.20(g) hereof.

 

“Bid Loan Obligation”
shall mean the obligation of the Companies with respect to matured Bid Loans as
set forth in subsection 2.20(h) hereof.

 

“Bid Loan Schedule”
shall mean a schedule substantially in the form of the Bid Loan Schedule
attached to Exhibit G-3-1 hereto.

 

“Bid Loan Tender”
shall have the meaning set forth in subsection 2.20(d) hereof.

 

“Bid Loan Tender
Request Notice” shall mean a notice in the form of Exhibit C-2 hereto
given by the Company pursuant to subsection 2.20(b) hereof.

 

“Board” shall mean
the Board of Governors of the Federal Reserve System.

 

“Borrowing Date”
shall mean any Business Day specified in a notice pursuant to subsection 2.4,
2.17 or 2.20 hereof as a date on which the Company requests the Banks or the
Administrative Agent to make Revolving Loans, Swing-Line Loans or Bid Loans
hereunder.

 

“Business Day”
shall mean a day other than a Saturday, a Sunday or a day on which commercial
banks in New York, New York, or Minneapolis, Minnesota are authorized or
required by law to close, except that when used in connection with a rate
determination, borrowing or payment in respect of a Eurodollar Loan, such day
shall also be a day on which dealings between banks are carried on in U.S.
dollar deposits in London, England, New York, New York, and Minneapolis,
Minnesota.

 

“Change in Control”
shall mean any event which results in the legal or beneficial ownership of
shares of Voting Stock of the Company granting the holder or holders thereof a
majority of the votes for the election of a majority of the Board of Directors
of the Company being owned by any Person or group of Persons acting in concert
other than Harry V. Quadracci, Harry R. Quadracci and Thomas A. Quadracci,
their respective spouses and descendants, spouses of any such descendants, the
executors, administrators, guardians or conservators of the estates 

 

5

 

of any of the foregoing Persons
and trustees holding shares of Voting Stock of the Company for the benefit of
any said Person and any employee stock ownership plan of the Company whose
trustee or a majority of whose trustees are Harry V. Quadracci, Harry R.
Quadracci and Thomas A. Quadracci, or any of them.

 

“Code” shall mean
the Internal Revenue Code of 1986, as amended from time to time.

 

“Commission” shall
mean, subject to the last two sentences of this definition, with respect to the
period beginning on the day the compliance certificate required by Section 5.2(c) with
respect to the most recent fiscal quarter end is delivered and ending on the
date the compliance certificate with respect to the last fiscal month of the
next fiscal quarter is required to be delivered,  with respect to each Acceptance, the relevant
percentage per annum set forth below, applied to the amount of such Acceptance
for the period from the date thereof to the date of its maturity on the basis
of a year of 360 days:

 

	
  Minimum
  Interest

  	
   

  	
   

  	
   

  
	
  Coverage
  Ratio

  	
   

  	
  Commission

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than 5.0

  	
   

  	
  .650

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than 4.0 and
  less than or equal to 5.0 

  	
   

  	
  .800

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Greater than 3.0 and
  less than or equal to 4.0

  	
   

  	
  .950

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Less than or equal to
  3.0

  	
   

  	
  1.250

  	
  %

  

 

For the period beginning
on the Effective Date and ending on the earlier of the date the compliance
certificate required by Section 5.2(c) with respect to the quarter
ending December 31, 2005 is actually, or is required to be, delivered, the
Commission shall be the Commission specified above for a Minimum Interest
Coverage Ratio of greater than 5.0 to 1.0. 
For any period beginning on a day the compliance certificate required by
Section 5.2(c) with respect to the last fiscal quarter is required to
be, but is not, delivered and ending on the date such compliance certificate is
delivered, the Commission shall be the Commission specified above for a Minimum
Interest Coverage Ratio of less than or equal to 3.00 to 1.0.

 

“Commitment” shall
mean, as to any Bank, its obligations to make Revolving Loans to the Companies
pursuant to subsections 2.2 and 2.17(c) hereof, and to purchase
participations in, and make payments with respect to, Acceptances created in
accordance with subsection 2.18 hereof, respectively, all in an aggregate
principal amount not to exceed at any one time outstanding the amount set forth
opposite its name under “Commitment” in Exhibit E-1 hereto, as such
amount may be reduced from time to time as provided herein.

 

6

 

“Commitment Period”
shall mean the period commencing on, and including, the Effective Date and
continuing until, but not including, the Termination Date.

 

“Common Stock”
shall mean the voting common stock of the Company.

 

“Commonly Controlled
Entity” shall mean an entity, whether or not incorporated, which is under
common control with the Company within the meaning of Section 4001 of
ERISA.

 

“Companies” shall
mean, at any time, the Company and its Restricted Subsidiaries as of the date
of determination.

 

“Company Affiliate”
shall mean any Person other than a Subsidiary of the Company which, directly or
indirectly, controls or is controlled by or is under common control with the
Company.  For the purpose of this
definition, “control” (including, with correlative meanings, the terms “controlled
by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of management and
policies, either directly or indirectly, whether through the ownership of
voting securities or by contract or otherwise of any Person.

 

“Consolidated
Indebtedness” shall mean all Indebtedness of the Company and its Restricted
Subsidiaries consolidated in accordance with GAAP.

 

“Consolidated Net
Worth” shall mean, at any particular time, the face amount of the capital
stock of the Company plus (or minus in the case of a deficit) all additional
paid-in capital, surplus and retained earnings of the Company and its
Restricted Subsidiaries, minus the sum of (i) the cost of shares of
capital stock (including common stock and preferred stock) of the Company held
by the Company as treasury stock or held by one of its Subsidiaries and (ii) the
net book value of the Company’s and its Restricted Subsidiaries’ investment in
Unrestricted Subsidiaries and (iii) all Indebtedness, Contingent
Obligations or other Liabilities of Unrestricted Subsidiaries to or guaranteed
by the Company or its Restricted Subsidiaries (other than Unrestricted
Subsidiary Trade Payables) and (iv) the amount (if any) by which (x) intangible
assets of the Company and its Restricted Subsidiaries under GAAP (including,
without limitation, goodwill, patents, trademarks, tradenames, copyrights,
franchises and deferred charges [including, but not limited to, unamortized
debt discount and expense, organization costs and deferred research and
development expense]) exceeds (y) 5% of the total assets of the Company
and its Restricted Subsidiaries as of the most recently completed calendar
quarter, total assets to be determined in accordance with GAAP consistent with
those used in the preparation of the audit report referred to in
subsection 3.1 hereof.

 

“Consolidated Total
Liabilities” shall mean at any time, without duplication, the sum of all
Indebtedness, all Contingent Obligations, and all Liabilities of the Company
and its Restricted Subsidiaries determined on a consolidated basis; provided,
however, that Consolidated Total Liabilities shall not include any obligation
of the Company or any Restricted Subsidiary in respect of documentary letters
of credit that are issued for the account of the Company or such Restricted
Subsidiary and that provide for drawings thereunder upon presentation of
documents relating to the purchase by the Company or such Restricted Subsidiary
of goods.

 

7

 

“Contingent Obligation”
shall mean, as to any Person, any guarantee of Indebtedness or any other
obligation of any second Person or any assurance with respect to the financial
condition of any second Person, whether direct, indirect or contingent,
including without limitation any purchase or repurchase agreement or other
arrangement of whatever nature having the effect of assuring or holding
harmless any third Person against loss with respect to any obligation of such
second Person; provided, however, that the term Contingent Obligation shall not
include (i) endorsements of instruments for deposit or collection in the
ordinary course of business or (ii) any obligations to reimburse an issuer
of a letter of credit to the extent that the letter of credit assures payment
of obligations otherwise constituting Indebtedness.

 

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

 

“Default” shall
mean any of the events specified in Section 7 hereof, whether or not any
requirement for giving of notice, the lapse of time, or both, or any other
condition has been satisfied.

 

“Discount Charge”
shall have the meaning specified in subsection 2.18(c) hereof.

 

“Dollars” and “$”
shall mean dollars in lawful currency of the United States of America.

 

“Dollar Amount” of
any currency at any date shall mean (i) the amount of such currency if
such currency is U.S. Dollars or (ii) the Equivalent Amount thereof if
such currency is any currency other than U.S. Dollars.  Unless otherwise expressly provided, all
references herein to the “Dollar Amount” of any Loan shall mean the Dollar Amount
of the outstanding principal amount of such Loan.

 

“Draft” shall have
the meaning specified in subsection 2.18(c) hereof.

 

“Drawing” shall
have the meaning specified in subsection 2.18(a) hereof.

 

“Drawing Date”
shall have the meaning specified in subsection 2.18(b) hereof.

 

“Effective Date”
shall mean the date on which the conditions set forth in subsections 4.1
through 4.4 shall have been satisfied.

 

“Equivalent Amount”
of any currency at any date shall mean the equivalent in U.S. Dollars of such
currency, calculated on the basis of the arithmetic mean of the buy and sell
spot rates of exchange of the Administrative Agent, or an Affiliate of the
Administrative Agent, in the London interbank market (or other market where the
Administrative Agent’s foreign exchange operations in respect of such currency
are then being conducted) for such other currency at or about 11:00 a.m.
(local time applicable to the transaction in question) on the date on which
such amount is to be determined, rounded up to the nearest amount of such
currency as determined by the Administrative Agent from time to time; provided,
however, that if at the time of any such determination, for any reason, no such
spot rate is being quoted, the Administrative Agent, or an Affiliate of the Administrative
Agent may use any reasonable method it deems appropriate (after 

 

8

 

consultation with the
Company) to determine such amount, and such determination shall be conclusive
absent error.

 

“ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as the same may, from time
to time, be supplemented or amended.

 

“Eurodollar Loans”
shall mean loans hereunder at such time as they are made and/or being
maintained at a rate of interest based upon a LIBOR Rate, including, without
limitation, Foreign Currency Loans; one of the Eurodollar Loans, a “Eurodollar
Loan”.

 

“Euro” means the
euro referred to in Council Regulation (EC) No. 1103/97 dated June 17,
1997 passed by the Council of the European Union, or, if different, the then
lawful currency of the member states of the European Union that participate in
the third stage of Economic and Monetary Union.

 

“Event of Default”
shall mean any of the events specified in Section 7 hereof, provided that
any requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.

 

“Excluded Taxes”
means, in the case of the Administrative Agent or any Bank, taxes imposed on
its overall net income, and franchise taxes imposed on it, by (i) the
jurisdiction under the laws of which the Administrative Agent or such Bank is
incorporated or organized or (ii) the jurisdiction in which the
Administrative Agent’s or such Bank’s principal executive office or any lending
installation of such Bank is located.

 

“Existing Credit
Agreement” shall have the meaning specified in the first WHEREAS clause on
the second page of this Agreement.

 

“Extension of Credit”
shall mean (i) all Revolving Loans, Foreign Currency Loans, Swing-Line
Loans, Bid Loans or advances made to the Companies under any Loan Document, (ii) Acceptances,
(iii) all Bid Banker’s Acceptances, (iv) all other extensions of
credit to or for the benefit of the Companies under any Loan Document, and (v) to
the extent not otherwise included in the foregoing, all Obligations; provided,
however, that for purposes of the definitions of the terms “Maximum Liability
Amount” and “Valuable Transfer” contained in this subsection 1.1, the term “Extension
of Credit” shall include any Extension of Credit made under this Agreement.

 

“Federal Funds Rate”  shall mean, for any date, the overnight
effective borrowing rate per annum for such date (or, if such date is not a
Business Day, the last Business Day preceding such date) for reserves in amounts
of $1,000,000 or more traded among commercial banks as published in Fed.
Release H.15(519) or, if such publication or a substitute containing the
foregoing rate information shall not be published by the Board of Governors of
the Federal Reserve System in respect of such date, then a rate determined on
the basis of other sources reasonably selected by the Administrative Agent.

 

“Fixed Charge Coverage
Ratio” shall mean, at any date of determination, the ratio, calculated
without duplication, of (i) net income minus S Corporation Tax
Distributions, plus, (A) the Companies’ income tax expense (or minus any
income tax credit), whether current or 

 

9

 

deferred, to the extent
deducted from (or added to) income before taxes in determining net income less
the amount set forth as the current tax provision on the Companies’ income
statement for the period of determination, (B) interest expense, (C) depreciation
expense, (D) amortization expense, (E) rent expense, and (F) any
losses (or minus any gains) arising from the sale of assets, each as determined
in accordance with GAAP consistently applied on a consolidated basis for the
Company and its Restricted Subsidiaries, but excluding any equity of the
Company or any Restricted Subsidiary in the unremitted earnings of any
Unrestricted Subsidiary and further excluding earnings of any Unrestricted
Subsidiary prior to its becoming a Restricted Subsidiary, for the four
consecutive quarterly periods ended on such date to (ii) the sum of (w) interest
expense, (x) rent expense, (y) scheduled principal payments with
respect to Indebtedness for borrowed money which by its terms matures more than
one year from the date of determination thereof, or which is extendible or
renewable at the option of the obligor to a time more than 12 months from the
date of determination thereof, and (z) scheduled rent payments with
respect to any lease of property, real or personal, which in accordance with
GAAP would be required to be capitalized on a balance sheet of the lessee (but
excluding therefrom the portion of such rent that is imputed interest), each as
determined in accordance with GAAP consistently applied on a consolidated basis
for the Company and its Restricted Subsidiaries for the four consecutive
quarterly periods ended on such date.

 

“Floating Rate”
shall mean, for any date, the higher of (i) the Prime Rate; or (ii) the
Federal Funds Rate plus one-half of one percent (0.5%) per annum.

 

“Floating Rate Loans”
shall mean loans hereunder at such time as they are made and/or being
maintained at a rate of interest based upon the Floating Rate; one of the
Floating Rate Loans, a “Floating Rate Loan”.

 

“Foreign Currency”
shall mean Pounds Sterling, Euros or Yen, as designated by the Company in the applicable
notice of borrowing for a Foreign Currency Loan.

 

“Foreign Currency
Loans” shall mean Revolving Loans denominated in Foreign Currency and made
available pursuant to Section 2.2 hereof.

 

“Foreign Currency Loan
Sublimit”:  Shall mean the Equivalent
Amount of $25,000,000 for all Foreign Currency Loans, in the aggregate at any
time outstanding.

 

“Foreign Exchange
Agreement” shall mean any agreement entered into by the Company and/or any
Restricted Subsidiary of the Company providing, in substance, for the sale or
exchange by the Company or such Restricted Subsidiary at a future date of an
amount of one or more currencies for an amount of one or more other currencies.

 

“GAAP” shall mean
generally accepted accounting principles in the United States of America in
effect from time to time.

 

“Governmental
Authority” shall mean any nation or government, any state or other
political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.

 

10

 

“Hedging Agreement”  shall mean any Interest Rate Agreement,
treasury lock or forward starting swap, Foreign Exchange Agreement, commodity
price protection agreement, interest rate swap, or other interest or currency
exchange rate or commodity price and energy hedging agreements, entered into
for the purpose of hedging the Companies’ exposure to interest or exchange
rates, loan credit exchange, security or currency valuations or commodity
prices, whether such exposure exists at the inception of the Hedging Agreement
or is anticipated to arise thereafter, and not for speculative purposes.

 

“Indebtedness”
shall mean, and shall include, as to any Person, at a particular time, (a) all
indebtedness for borrowed money or for the deferred purchase price of Property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which such
Person otherwise assures a creditor against loss (excluding liability under
negotiable instruments endorsed by such Person in the ordinary course of
business for collection or deposit), (b) obligations of such Person,
contingently or otherwise, as obligor, guarantor or otherwise under leases of
real or personal property or any comparable arrangement with respect to use or
title which are, shall have been, or should be, in accordance with GAAP,
capitalized, (c) indebtedness arising under acceptance facilities and the
face amount of all letters of credit (excluding letters of credit used by that
Person to secure obligations of that Person to the extent such obligations
otherwise constitute Indebtedness of such Person) issued for the account of
such Person and, without duplication, all drafts drawn thereunder, (d) all
liabilities secured by any Lien on any Property owned by such Person even if
such Person has not assumed or otherwise become liable for the payment thereof,
(e) any liability of such Person or a Commonly Controlled Entity to a
Plan, and (f) any other obligations (other than deferred taxes) which are
required by GAAP to be shown as liabilities on its balance sheet and which are
payable or remain unpaid.

 

“Interest Payment Date”
shall mean (a) as to any Floating Rate Loan, the last day of each March,
June, September and December commencing on the first of such days to
occur after a Floating Rate Loan is made or a Eurodollar Loan is converted to a
Floating Rate Loan and at maturity, (b) as to any Eurodollar Loan, the
last day of each Interest Period, unless the duration of such Interest Period
exceeds three months, in which case the Interest Payment Date shall be the date
that is three months after the first day of such Interest Period and also the
last day of such Interest Period, and, in all cases, at maturity.

 

“Interest Period”
shall mean with respect to any Eurodollar Loan:

 

(i)  initially, the
period commencing on, as the case may be, the borrowing or conversion date with
respect to such Eurodollar Loan and ending one, two, three, or six months
thereafter, as selected by the Company, as the case may be, in its notice of
borrowing provided in subsection 2.4 or its notice of conversion as provided in
subsection 2.8; and

 

(ii)  thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Rate Loan and ending one, two, three or six
months thereafter as selected by the Company in a notice satisfying subsection
2.4 given before the end of the next preceding Interest Period (and if the
Company fails to give such notice the Company shall be deemed to have selected
the Prime Rate),

 

11

 

provided, that all of the foregoing provisions
relating to Interest Periods are subject to the following:

 

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

 

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

 

(C)  any Interest
Period which would otherwise extend beyond the Termination Date shall end on
the Termination Date; and

 

(D)  for purposes of
determining the availability of Interest Periods in respect of  Eurodollar Loans, such Interest Periods shall
be deemed available if the Administrative Agent is able to quote a rate as
provided in the definition of LIBOR Rate.

 

“Interest Rate
Agreement” shall mean any agreement entered into by the Company and/or any
Restricted Subsidiary of the Company providing, in substance, for the Company
or such Restricted Subsidiary to pay to the other party or parties thereto a
fixed or fluctuating rate amount, and receive from the other party or parties
thereto a fluctuating or fixed rate amount, respectively, applied to a notional
principal amount, under such agreement.

 

“Invitation to Tender
for Bid Banker’s Acceptances” shall mean an invitation substantially in the
form of Exhibit D-1 hereto, given by the Administrative Agent on behalf of
the Company pursuant to subsection 2.19(c) hereof.

 

“Invitation to Tender
for Bid Loans” shall mean an invitation substantially in the form of Exhibit D-2
hereto, given by the Administrative Agent on behalf of the Company pursuant to
subsection 2.20(c) hereof.

 

“Liabilities”
shall mean, as to any Person, at any date, all items which would, in conformity
with GAAP be classified as liabilities on a balance sheet of such Person at
such date but shall specifically exclude obligations which are offset by rights
to payment as a bondowner under Phantom Bonds.

 

“LIBOR Rate” shall
mean, with respect to each Interest Period applicable to Eurodollar Loans,
including, as applicable, Foreign Currency Loans, the rate per annum equal to
the offered rate for deposits in United States Dollars (or the applicable
Foreign Currency), for delivery of such deposits on the first day of such
Interest Period, for the number of days comprised therein, which appears on the
Telerate Page 3750 or the applicable Telerate Page with respect to
the applicable Foreign Currency, as of 11:00 a.m., London time, on the day
that is two Business Days preceding the first day of such Interest Period.  “Telerate Page 3750” means the display
designated as page 3750 on Telerate System Incorporated (or such other page as
may replace the 

 

12

 

Page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks for United States Dollar deposits).

 

“Lien” shall mean
any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the UCC
or comparable law of any jurisdiction), but shall not include a sale or lease
in the ordinary course of business.

 

“Loans” shall
mean, collectively, Revolving Loans (including any Foreign Currency Loans,
Eurodollar Rate Loans and Floating Rate Loans comprising all or part of any
Revolving Loans), Swing-Line Loans and Bid Loans; “Loan” shall mean a Revolving
Loan (including any Foreign Currency Loan, Eurodollar Rate Loan or Floating
Rate Loan comprising all or part of a Revolving Loan), a Swing- Line Loan or a
Bid Loan, as the context may require.

 

“Loan Documents”
shall mean this Agreement, the Notes, the Drafts, the drafts accepted in
connection with the Bid Banker’s Acceptances and any schedule or exhibit
thereto; one of the Loan Documents, a “Loan Document”.

 

“Maximum Liability
Amount” shall mean, for any Restricted Subsidiary of the Company, (i) with
respect to each Extension of Credit any proceeds of which are used to make a
Valuable Transfer to such Restricted Subsidiary, the Amount of such Valuable
Transfer, plus (ii) with respect to all proceeds of Extensions of
Credit which are not used to make a Valuable Transfer to such Restricted
Subsidiary, the lesser of (A) the Amount of such Extension of Credit and (B) the
greatest of (1) ninety-five percent (95%) of the Adjusted Net Worth of
such Restricted Subsidiary as of the end of the most recently concluded fiscal
quarter of such Restricted Subsidiary ended on or prior to the date of such
Extension of Credit, (2) ninety-five percent (95%) of the highest Adjusted
Net Worth of such Restricted Subsidiary at the end of any fiscal quarter of
such Restricted Subsidiary subsequent to the fiscal quarter referred to in
clause (B)(1) and prior to the earlier of the date of the commencement of
a case under Title 11 of the United States Code involving the Company or such
Restricted Subsidiary or enforcement against the Company or such Restricted
Subsidiary is sought and (3) ninety-five percent (95%) of the Adjusted Net
Worth of such Restricted Subsidiary at the earlier of the date of the
commencement of a case under Title 11 of the United States Code involving the
Company or such Restricted Subsidiary and the date enforcement against the
Company or such Restricted Subsidiary is sought. For purposes of the foregoing
definition, the term “Amount” shall mean (a) with respect to Loans
or advances constituting Extensions of Credit, the unpaid principal amount
thereof and accrued interest thereon, (b) with respect to bankers’
acceptances constituting Extensions of Credit, the face amount thereof,
together with fees and interest in respect thereof and (c) with respect to
any other Extension of Credit, the aggregate amount of the liability of the
Company or any Restricted Subsidiary in respect thereof.

 

“Minimum
Adjusted Consolidated Net Worth” shall mean (i) at December 31,
2005, $625,000,000; and (ii) at the end of each calendar year thereafter
through December 30 of the following calendar year, the Minimum Adjusted
Consolidated Net Worth shall be the Minimum 

 

13

 

Adjusted Consolidated Net
Worth as of the end of the immediately prior calendar year, plus 40% of the
Companies’ net income during the calendar year then ended (as computed in
accordance with GAAP), without reduction to reflect any net loss, but after
deduction of S Corporation Tax Distributions.

 

“Minimum Interest
Coverage Ratio” shall mean, at any date, the ratio of (i) net income
plus (A) income tax expense (or minus any income tax credit), whether
current or deferred, to the extent deducted from (or added to) income before
taxes in determining net income, (B) interest expense, (C) depreciation
expense, (D) amortization expense, (E) rent expense and (F) any
losses (or minus any gains) arising from the sale of assets, each as determined
in accordance with GAAP consistently applied on a consolidated basis for the
Company and its Restricted Subsidiaries, but excluding any equity of the
Company or any Restricted Subsidiary in the unremitted earnings of any
Unrestricted Subsidiary and further excluding earnings of any Unrestricted
Subsidiary prior to its becoming a Restricted Subsidiary, for the four
consecutive quarterly periods ended on such date to (ii) the sum of
interest expense and rent expense, each as determined in accordance with GAAP
consistently applied on a consolidated basis for the Company and its Restricted
Subsidiaries for the four consecutive quarterly periods ended on such date.

 

“Month” shall mean
any calendar month.

 

“Multiemployer Plan”
shall mean, as to any Person, a Plan of such Person which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.

 

“Notes” shall
mean, collectively, the Revolving Notes, the Swing-Line Note and the Bid Loan
Notes; “Note” shall mean a Revolving Note, the Swing-Line Note or a Bid
Loan Note, as the context may require.

 

“Notice of Drawing”
shall have the meaning specified in subsection 2.18(b) hereof.

 

“Obligations”
shall mean all the unpaid principal amount of, and accrued interest on, the
Notes, and all other obligations and liabilities of the Company or any
Subsidiary of the Company to the Administrative Agent or the Banks under,
arising out of or in connection with this Agreement or the Notes or the other
Loan Documents (including, without limitation, fees and expenses), whether now
existing or hereafter incurred, direct or indirect, absolute or contingent,
matured or not matured, joint or several, whether for principal, interest,
reimbursement obligations or other obligations under or with respect to
Acceptances or Bid Banker’s Acceptances, fees, expenses or otherwise.

 

“Other Taxes”
shall have the meaning specified in subsection 2.22(ii).

 

“Outstandings”
shall mean at the time of any determination, with respect to any Bank, without
duplication, the sum of (i) the aggregate unpaid principal balance of all
Revolving Loans (including, without limitation the unpaid principal balance of
all Foreign Currency Loans), Bid Loans and, in the case of the Administrative
Agent, Swing-Line Loans made by such Bank, (ii) such Bank’s Pro Rata Share
of the aggregate unpaid face amount of all outstanding Acceptances, (iii) such
Bank’s Pro Rata Share of any outstanding obligations to make payment with
respect to Acceptances, (iv) the aggregate unpaid face amount of all Bid
Banker’s Acceptances created by 

 

14

 

such Bank, and (v) such
Bank’s outstanding obligations to make payment with respect to Bid Banker’s
Acceptances created by such Bank.

 

“Partially Accepted
Bid” shall have the meaning specified in subsection 2.19(f)(1), with
respect to Bid Bankers’ Acceptances, and in subsection 2.20(f)(1), with respect
to Bid Loans.

 

“PBGC” shall mean
the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of
Title IV of ERISA.

 

“Person” shall
mean an individual, partnership, joint venture, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
organization, Governmental Authority or other entity of whatever nature.

 

“Phantom Bonds”
shall mean bonds issued in registered form under an indenture of trust by a
state, municipality or political subdivision of either, if and only if: (i) the
proceeds of such bonds are used by the issuer to purchase assets (other than
Restricted Property); (ii) the issuer, as lessor, simultaneously leases
the purchased assets to the Company or a Restricted Subsidiary, as lessee; (iii) the
lease obligates the Company or Restricted Subsidiary that is lessee to make
payments in amounts and at times sufficient to pay all debt service on the
bonds and the lessee guarantees payment of the bonds; (iv) the lease
provides that the lessee may re-purchase the leased assets for a nominal
consideration at such time as the bonds have been paid in full; (v) the
issuer assigns its interest in the lease and the leased assets to a trustee for
the benefit of the holders of such bonds, and grants the trustee a perfected
lien on the lease and leased assets, to secure payment of such bonds; and (vi) the
lessee under the lease purchases and continues to hold all of the issue of bonds.

 

“Plan” shall mean
as to any Person any employee benefit plan that is covered by ERISA and in
respect of which that Person or a Commonly Controlled Entity of that Person is
(or would be, within the five-year period prior to termination of such plan, deemed
under Section 4069 to be) an “employer” as defined in Section 3(5) of
ERISA.

 

“Pounds Sterling”
or “Pounds” shall mean the currency of the United Kingdom.

 

“Prime Rate” shall
mean the rate per annum publicly announced from time to time by U.S. Bank National
Association in Minneapolis as its “Prime Rate,” which may be a rate at,
above or below the rate at which U.S. Bank National Association lends to other
persons.

 

“Pro Rata Share”
shall mean: (i) with respect to any Bank listed in the preamble to this
Agreement, the proportion, expressed as a percentage, which that Bank’s initial
Commitment, as set out in Exhibit E-1 bears to the initial Total
Commitments, as set out on Exhibit E-1, and as adjusted to reflect any
assignment of all or a portion of the Commitments pursuant to subsection
9.9(c); and (ii) with respect to any Assignee, as defined in subsection
9.9(c), the Pro Rata Share assigned to that Assignee.

 

“Property” shall
mean any interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible.

 

15

 

“Reportable Event”
shall mean any of the events set forth in Section 4043(b) of ERISA or
the regulations thereunder.

 

“Required Banks”
shall mean, at any date, Banks having an aggregate Pro Rata Share of at least
51 %.

 

“Requirement of Law”
shall mean, as to any Person, the Articles of Incorporation and By-Laws or
other organizational or governing documents of such Person, and any law,
treaty, rule or regulation, or determination of an arbitrator or a court
or other Governmental Authority, specifically including but not limited to
ERISA and applicable environmental, occupational, safety and health and other
labor laws, in each case applicable to or binding upon such Person or any of
its property or to which such Person or any of its property is subject.

 

“Reserve Percentage”
shall mean, for any day, that percentage (expressed as a decimal) which is in
effect on such day, as prescribed by the Board (or any successor or any other
Governmental Authority), for determining the reserve requirement for the
Administrative Agent in respect of new non-personal time deposits in dollars in
Minneapolis, Minnesota having a maturity comparable to the relevant Interest
Period for any advance and in an amount of $100,000 or more.

 

“Responsible Officer”
shall mean, as to any of the Company or the Subsidiaries, the officers
designated as Responsible Officers on the Designation of Responsible Officers
form attached hereto as Exhibit U, as the same may be amended or replaced
from time to time; provided, however, that as to any statements or certificates
furnished in connection with this Agreement with respect to any financial
matters (other than any writing delivered pursuant to Section 2.4 and 2.17),
“Responsible Officer” shall mean the Senior Vice President of Finance or
Treasurer in the case of the Company and the Treasurer in the case of any
Subsidiary.

 

“Restricted Property”
shall mean all assets of the Company and the Restricted Subsidiaries that are
properly classified as current assets, in accordance with GAAP (including,
specifically, cash, accounts receivable and inventory), whether now or
hereafter acquired.

 

“Restricted Subsidiary”
shall mean and include a Person whose financial statements are required to be
consolidated with the Company’s financial statements in accordance with GAAP
and which Person either (i) is a party to this Agreement, (ii) is
designated as such in Exhibit F hereto, or (iii) is subsequently
designated as such by resolution of the Board of Directors of such Person, provided
that such designation would not result in the violation of any of the terms of
this Agreement and provided, further, that the Company and such
subsequently designated Restricted Subsidiary have each executed and delivered
to the Administrative Agent a Restricted Subsidiary Agreement (in sufficient
counterparts for distribution of an executed original to each Bank), together
with an opinion of in-house counsel to the Company to the effect that the Restricted
Subsidiary Agreement has been duly and validly authorized, executed and
delivered by the proposed new Restricted Subsidiary and constitutes the valid
and binding obligation of such proposed Restricted Subsidiary, enforceable
against such Restricted Subsidiary in accordance with its terms and, pursuant
to said Restricted Subsidiary Agreement, the proposed Restricted Subsidiary is
jointly and severally obligated with respect to the payment of all Obligations
outstanding and to be outstanding under this Agreement (subject to the right of
such 

 

16

 

Restricted Subsidiary to
cease to be a Restricted Subsidiary pursuant to the next sentence of this
definition).  A Restricted Subsidiary may
be designated an Unrestricted Subsidiary by resolution of the Board of
Directors of the Company provided that (y) the Company provides at least
ten (10 days prior written notice of the effective date of such designation to
the Administrative Agent and (z) as of the effective date of such
designation, no Default or Event of Default then exists and such designation
would not result in a Default or Event of Default, and would not have resulted
in a Default or Event of Default had such designation occurred as of the end of
the fiscal quarter ending most recently prior to the date of such designation.

 

“Restricted Subsidiary
Agreement” shall mean an agreement in the form of Exhibit P attached
hereto.

 

“Revolving Loan”
shall have the meaning specified in subsection 2.2 hereof.

 

“Revolving Loan
Facility” shall mean the credit facility granted by the Banks to the
Companies pursuant to subsections 2.1 and 2.2 through 2.16 hereof.

 

“Revolving  Note”
shall have the meaning specified in subsection 2.3 hereof.

 

“S Corporation Tax
Distributions” shall mean distributions made to the Company’s shareholders
to pay state and federal income taxes incurred by such shareholders on account
of their status as such for any year in which the Company has elected to be
taxed as an S Corporation under the Code calculated at the highest state and
federal marginal tax rates applicable to such shareholders, taking into account
the character of each separately stated item of taxable income, the federal tax
benefit for state taxes and the phase-out of itemized deductions and credits
and other offsets to tax.

 

“Single Employer Plan”
shall mean, as to any person, any Plan of such Person which is not a
Multiemployer Plan.

 

“Swing-Line Loan”
shall have the meaning specified in subsection 2.17(a) hereof.

 

“Swing-Line Loan
Facility” shall mean the credit facility granted by the Banks to the
Companies pursuant to subsections 2.1 and 2.17 hereof.

 

“Subsidiary” shall
mean, as to any Person, any corporation or other entity (including, without
limitation, limited liability companies, partnerships, joint ventures and
associations) of which shares of stock (or other ownership interests) having
ordinary voting power (other than stock or other ownership interests having
such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation or
such other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person.

 

“Taxes” means any
and all present or future taxes, duties, levies, imposts, deductions, charges
or withholdings, and any and all liabilities with respect to the foregoing, but
excluding Excluded Taxes and Other Taxes.

 

17

 

“Termination Date”
shall mean December 7, 2010 or such later date to which the Termination
Date is extended pursuant to subsection 2.3(b) hereof.

 

“Total Available
Commitments” shall mean, at any time, as to all the Banks collectively, the
sum of the Available Commitments of all the Banks at such time.

 

“Total Commitments”
shall mean, at any time, as to all the Banks collectively, the sum of the
Commitments of all the Banks at such time.

 

“Total Outstandings”
shall mean, at any time, as to all the Banks collectively, the sum of the
Outstandings of all the Banks at such time.

 

“UCC” shall mean
the Uniform Commercial Code as the same may from time to time be in effect in
the State of Minnesota; provided that, in the event, by reason of mandatory
provisions of law, any or all of the attachment, perfection, priority or
remedies with respect to the Administrative Agent or any Bank’s security
interest (if any) in the Companies’ Property is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of Minnesota, the term “Uniform Commercial Code” shall mean the Uniform
Commercial Code as enacted and in effect in such other jurisdiction solely for
the purposes of the provisions hereof relating to such attachment, perfection,
priority or remedies and for purposes of definitions relation to such
provisions.

 

“Unrestricted
Subsidiary” shall mean any Subsidiary of the Company, other than a
Restricted Subsidiary and any other Person whose financial statements are
required to be consolidated with the Company’s financial statements in
accordance with GAAP but which Person is not a Restricted Subsidiary.

 

“Unrestricted
Subsidiary Trade Payables” shall mean a right of the Company or a
Restricted Subsidiary to payment for goods sold or leased or services rendered
to an Unrestricted Subsidiary, provided that such right to payment:  (i) arose out of the sale or lease of
goods or services, in the ordinary course of business and within the United
States; (ii) is the valid, binding and legally enforceable obligation of
the Unrestricted Subsidiary; (iii) has payment terms consistent with those
imposed by the seller in similar transactions not involving Unrestricted
Subsidiaries; (iv) is not past due; and (v) is not, as reasonably
determined by the Administrative Agent, uncollectible.

 

“Valuable Transfer”
shall mean, in respect of any Subsidiary of the Company, (i) all proceeds
of all Extensions of Credit received directly by such Subsidiary, and all
loans, advances or capital contributions made to such Subsidiary with proceeds
of Extensions of Credit, (ii) all debt securities of such Subsidiary
acquired with proceeds of Extensions of Credit, (iii) the fair market
value of all property acquired with proceeds of Extensions of Credit and
transferred to such Subsidiary, (iv) all equity securities of such
Subsidiary acquired with proceeds of Extensions of Credit and (v) as the
case may be, the interest on, and the reimbursement obligations relating to,
such Extensions of Credit the proceeds of which are used to make such a
Valuable Transfer.

 

18

 

“Voting Stock”
shall mean securities of any class or classes, the holders of which are
ordinarily, in the absence of contingencies, entitled to elect a majority of
the corporate directors (or Persons performing similar functions).

 

“Yen” means the
lawful currency of Japan.

 

1.2.  Other Definitional Provisions.

 

(a)  All terms
defined in this Agreement shall have the defined meanings when used in the Loan
Documents, including, but not limited to, the Notes or any certificate or other
document made or delivered pursuant hereto.

 

(b)  As used herein
and in the Notes, the Loan Documents and any certificate or other document made
or delivered pursuant hereto, accounting terms relating to the Companies not
defined in subsection 1.1 hereof, and accounting terms partly defined in
subsection 1.1 hereof to the extent not defined, shall have the respective
meanings given to them under GAAP.

 

(c)  The words “hereof”,
“herein” and “hereunder” and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and section, subsection, paragraph,
clause, schedule and exhibit references are to this Agreement unless otherwise
specified.  The word “including” shall be
used in this Agreement to be inclusive, not limiting and shall be deemed to be
followed by the words “without limitation”. 
Unless the context otherwise clearly requires, the singular shall
include the plural.

 

SECTION 2.  AMOUNTS AND TERMS OF CREDIT FACILITIES

 

2.1.  Establishment of Facilities.  Subject to the terms and conditions hereof,
the Banks hereby establish credit facilities for the Companies, consisting of a
Revolving Loan Facility under which the Banks may make Revolving Loans,
including Foreign Currency Loans, in accordance with subsections 2.2 through
2.16 hereof, a Swing-Line Loan Facility under which the Administrative Agent
may make Swing-Line Loans in accordance with subsection 2.17 hereof, an
Acceptance Facility under which the Administrative Agent may create Acceptances
in accordance with subsection 2.18 hereof, a Bid Banker’s Acceptance Facility
under which the Banks may create Bid Banker’s Acceptances in accordance with
subsection 2.19 hereof, and a Bid Loan Facility under which the Banks may make
Bid Loans in accordance with subsection 2.20 hereof; provided, however,
that in no event shall the Companies be entitled to receive any Extension of Credit
hereunder if, after giving effect thereto, the Total Outstandings would exceed
the Total Commitments.

 

2.2.  The Revolving Loan Facility.

 

(a)  Revolving
Loan Commitments.  Subject to the
terms and conditions hereof, each Bank severally, but not jointly, agrees to
make Loans on a revolving credit basis (“Revolving Loans”) during the
Commitment Period in an aggregate principal amount at any time outstanding not
to exceed that Bank’s Commitment; provided, however, that a Bank
shall not be obligated to make a Revolving Loan if (i) such Revolving
Loan, together with any other Extensions of Credit made concurrently therewith
by such Bank under this subsection 2.2 or in the form of a 

 

19

 

participation or participations
in Acceptances under subsection 2.18 hereof, would exceed such Bank’s Available
Commitment or, (ii) after giving effect to the making of such Revolving
Loan and any payment of Outstandings made directly by the Administrative Agent,
for the account of the Companies, from the proceeds of such Revolving Loan, the
Total Outstandings would exceed the Total Commitments.  During the Commitment Period, the Companies
may use the Commitments by borrowing, repaying and reborrowing, all in
accordance with the terms and conditions hereof.

 

(b)  Interest
Rate Options.  The Revolving Loans,
except for Foreign Currency Loans, may be (i) Eurodollar Loans, (ii) Floating
Rate Loans, or (iii) part Eurodollar Loans and/or part Floating Rate Loans
as determined by the Company and notified to the Administrative Agent in
accordance with subsection 2.4 hereof;  provided, that no Eurodollar Loan shall be
made later than the day that is one month or thirty days, respectively, prior
to the Termination Date.  Except as
otherwise provided in Sections 2.12 and 2.13, Foreign Currency Loans shall be
Eurodollar Loans.

 

(c)  Failure to
Specify Interest Rate Option.  If the
Company requests a Revolving Loan but fails to specify an interest rate option,
or in the case of a Eurodollar Loan, an Interest Period, or if any notice
required in this subsection 2 is inadequate or untimely, the Company shall be
deemed to have requested a Floating Rate Loan. 
Foreign Currency Loans will not be advanced unless the Company specifies
the initial Interest Period.

 

(d)  Foreign
Currency Loans.  Subject to the
limitations of Subsection 2.2(a) above, the Company may request that
Revolving Loans be made as Foreign Currency Loans provided that no Foreign
Currency Loan will be made that would cause the total outstanding principal
amount of all Foreign Currency Loans to exceed the Foreign Currency Loan
Sublimit.

 

2.3.  Revolving Notes; Extension of Termination Date.

 

(a)  Revolving
Notes.  The Revolving Loans made by
each Bank pursuant hereto shall be evidenced by a promissory note of the
Companies substantially in the form of Exhibit G-1-1 (individually a “Revolving
Note”; collectively, “Revolving Notes”), with appropriate insertions
as to principal amount, payable to the order of such Bank and representing in
the aggregate the Obligation of the Companies to pay the lesser of (a) the
amount of the Commitment of such Bank and (b) the aggregate unpaid
principal amount of all Revolving Loans (including such Bank’s Pro Rata Share
of any Foreign Currency Loans) made by such Bank, with interest thereon as
prescribed in subsection 2.9 hereof. 
Upon any borrowing, prepayment or conversion as provided in subsections
2.4, 2.7 and 2.8 hereof, each Bank is hereby authorized to record the date and
amount of each Loan (or conversion) made by such Bank, the date and amount of
each payment or prepayment of principal thereof, and the Interest Period and
interest rate with respect to any Eurodollar Rate portion thereof, in its books
and records and/or on a schedule attached to its Revolving Note; provided,
however, that any failure by a Bank to make any such entry or error in making
such entry shall not limit or otherwise affect the Obligations of the Companies
hereunder and on that Bank’s Revolving Note. 
Each Revolving Note shall (a) be dated the Effective Date, (b) mature
on the Termination Date, when all amounts then remaining outstanding under that
Note shall be due and payable in full and (c) bear interest for the period
from and including the date each Revolving Loan is made to but not including
the date of

 

20

 

payment in full thereof,
on the unpaid principal amount thereof from time to time outstanding at the
applicable interest rate per annum determined as provided in subsections 2.9(a) through
(c) hereof.  Interest on each
Revolving Note shall be payable as specified in subsection 2.9(e) hereof.

 

(b)  Extension of
Termination Date.  By or before the
60th day, but not earlier than the 90th day, prior to each anniversary of the
Effective Date, the Company may deliver to the Administrative Agent a written
request to extend the Termination Date to the next anniversary of the
Termination Date then in effect.  The
Administrative Agent shall, promptly after its receipt of such a request,
request that each Bank indicate in writing if that Bank has approved the
requested extension.  If and only if a
requested extension is agreed to by each Bank, in its sole discretion, by the
30th day prior to such anniversary of the Effective Date, the Termination Date
shall be extended to the next anniversary of the Termination Date then in
effect.  As soon as is practicable after
such extension has been approved by the Banks, the Administrative Agent shall
notify the Company of such fact, and the parties to this Agreement shall enter
into such documents as the Administrative Agent deems necessary to evidence
such extension.  The Banks shall be under
no obligation or commitment to extend the Termination Date beyond [December 7, 2010] or any subsequently specified Termination
Date, and no such obligation or commitment on the part of any Bank should be
inferred from the provisions of this Section.  No extension shall take effect if a
Default or Event of Default exists on the existing Termination Date.

 

2.4.  Procedure for Borrowing Revolving Loans.

 

(a)  US Dollar
Loans.  The Companies may borrow
Revolving Loans during the Commitment Period on any Business Day, if such
Revolving Loans are to be Eurodollar Loans or Floating Rate Loans; provided,
that the Company shall give the Administrative Agent irrevocable notice in
writing by telecopier or orally, which notice must be received by the
Administrative Agent prior to 11:00 A.M., Minneapolis, Minnesota time, (a) two
Business Days prior to the requested Borrowing Date, in the case of Revolving
Loans which are to be Eurodollar Loans, and (b) the same day, in the case
of Revolving Loans which are to be Floating Rate Loans, specifying in each case
(i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether
the Revolving Loans are to be Eurodollar Loans, Floating Rate Loans or a combination
thereof, (iv) if the Revolving Loans are to be entirely or partly
Eurodollar Loans, the length of the Interest Period for each such Eurodollar
Loan.  Upon receipt of such notice from
the Company, the Administrative Agent shall promptly notify each Bank
thereof.  Each Bank will make the amount
of its Pro Rata Share of each borrowing available to the Administrative Agent
for the account of the Companies at the office of the Administrative Agent set
forth in subsection 9.2 hereof prior to 1:00 p.m., Minneapolis, Minnesota
time on the Borrowing Date in funds immediately available to the Administrative
Agent as the Administrative Agent may direct. 
The amounts so made available to the Administrative Agent shall be made
available on such date to the Companies by the Administrative Agent by
crediting the account of the Company on the books of such office of the
Administrative Agent with the aggregate of such amounts in like funds as
received by the Administrative Agent or in such manner as the Company shall
request in writing.

 

(b)  Foreign Currency Loans.  The Companies may borrow Foreign Currency
Loans during the Commitment Period on any Business Day; provided, that
the Company shall 

 

21

 

give the Administrative
Agent irrevocable notice in writing by telecopier or orally, which notice must
be received by the Administrative Agent prior to 11:00 A.M., Minneapolis,
Minnesota time, four Business Days prior to the requested Borrowing Date
specifying in each case (i) the amount to be borrowed, (ii) the
requested Borrowing Date, (iii) the length of the initial Interest Period
for each such Foreign Currency Loan and (iv) the Foreign Currency in which
such Foreign Currency Loan is to be disbursed.  Upon receipt of such
notice from the Company the Administrative Agent shall promptly notify each
Bank thereof.  The Administrative Agent
will make the Foreign Currency Loan in the specified Foreign Currency available
to the Company at the office of the Administrative Agent on the Borrowing Date
by crediting the account of the Company on the books of the Administrative
Agent or in such manner as the Company shall request in writing.  Unless a Bank shall have notified the
Administrative Agent, prior to its making of any Foreign Currency Loan, that
any applicable condition precedent set forth in Section 4
had not then been satisfied, each Bank will make its Pro Rata Share of each
Foreign Currency Loan available to the Administrative Agent in the applicable
Foreign Currency prior to 1:00 p.m., Minneapolis, Minnesota time on the
Borrowing Date in funds immediately available to the Administrative Agent.  In the event that any Bank fails to make
payment to the Administrative Agent of any amount due under this Section 2.4(b), the Administrative Agent
shall be entitled to receive, retain and apply against such obligation the
principal and interest otherwise payable to the Administrative Agent hereunder
until the Administrative Agent receives from such Bank an amount sufficient to discharge
such Bank’s payment obligation as prescribed in this Section 2.4(b) together
with interest thereon at the Federal Funds Rate for each day during the period
commencing on the Borrowing Date for such Foreign Currency Loan and ending on
the date such obligation is fully satisfied.

 

(c)  All
Revolving Loans.  Any written request
for Revolving Loans (including Foreign Currency Loans) shall be in the form of Exhibit Q
or other form reasonably acceptable to the Administrative Agent and containing
the information required by Exhibit Q, and shall be signed by a
Responsible Officer or a person designated as authorized to make such requests
in a writing signed by a Responsible Officer. 
Any oral request for Revolving Loans shall be made by a Responsible
Officer or a person designated as authorized to make such requests in a writing
signed by a Responsible Officer and shall be confirmed by a writing in the form
of Exhibit Q or other form reasonably acceptable to the Administrative
Agent and containing the information required by Exhibit Q, signed by a
Responsible Officer or a person designated as authorized to make such requests
in a writing signed by a Responsible Officer, which written confirmation shall
be delivered by telecopier to the Administrative Agent on the Borrowing Date of
the Revolving Loans in question.  Each
borrowing of Revolving Loans shall be in a minimum aggregate principal amount
as to all Revolving Loans requested in such borrowing of (a) $5,000,000 or
a whole multiple of $100,000 in excess thereof for Eurodollar Loans, and (b) $2,500,000
or a whole multiple of $100,000 in excess thereof for Floating Rate Loans.

 

2.5.  Fees.

 

(a)  The Companies
agree to pay to the Administrative Agent for the pro  rata account
of each Bank during the period beginning on and including the Effective Date
and ending on the Termination Date, a facility fee determined by applying the
Applicable Fee Percentage to the average daily Commitment of such Bank during
the period for which payment is made. 
Facility fees are payable on the last day of each March, June, September and
December 

 

22

 

and on the Termination
Date, commencing on the first of such dates to occur after the Effective
Date.  Facility fees are payable by debit
to the Company’s account.  Facility fees
shall be adjusted as and when the Applicable Fee Percentage changes due to
changes in the Minimum Interest Coverage Ratio.

 

(b)  The Companies
agree to pay to the Administrative Agent, for the account of each Bank that
created Bid Banker’s Acceptances which were outstanding during the relevant
period, a Bid Banker’s Acceptance fee equal to an amount computed at the rate
of 1/10 of 1% per annum on the average daily face amount of Bid Banker’s
Acceptances of such Bank outstanding during the period for which payment is
made.  Bid Banker’s Acceptance fees are
payable on the last day of each March, June, September and December and
on the Termination Date, commencing on the first of such dates to occur after
the Effective Date.  Bid Banker’s
acceptance fees are payable by debit to the Company’s account.  Bid banker’s Acceptance fees shall be pro
rated among the Banks that created Bid Banker’s Acceptances which were
outstanding during the relevant period based on the average daily face amount
of Bid Banker’s Acceptances of each such Bank outstanding during the period for
which payment is made.

 

(c)  The Companies
agree to pay to the Administrative Agent, for the account of each Bank that
made Bid Loans which were outstanding during the relevant period, a Bid Loan
fee equal to an amount computed at the rate of 1/10 of 1% per annum on the
average daily principal amount of Bid Loans made by such Bank outstanding
during the period for which payment is made. 
Bid Loan fees are payable on the last day of each March, June, September and
December and on the Termination Date, commencing on the first of such
dates to occur after the Effective Date. 
Bid Loan fees are payable by debit to the Company’s account.  Bid Loan fees shall be pro rated among the
Banks that made Bid Loans which were outstanding during the relevant period
based on the average daily principal amount of Bid Loans made by each such Bank
outstanding during the period for which payment is made.

 

2.6.  Termination or Reduction of Commitments.
The Companies shall have the right, upon not less than five Business Days’
irrevocable written notice to the Administrative Agent, to terminate the
Commitments or, from time to time, to reduce pro  rata the amount
of each Bank’s Commitment, provided that: (i) in the case of a termination
of the Commitments, the Companies shall, concurrently with such termination,
prepay in full the Total Outstandings in accordance with subsection 2.22
hereof, together with the accrued interest thereon to the date of such
prepayment, any accrued but unpaid Bid Banker’s Acceptance fees, Bid Loan fees,
facility fees and Administrative Agent’s fees and any amounts payable in
accordance with subsection 2.15; and (ii) in the case of a reduction that
reduces the Total Commitments to an amount less than the Total Outstandings,
the Companies shall prepay the Total Outstandings in accordance with subsection
2.22 in an aggregate amount equal to the amount by which Total Outstandings
exceed the Total Commitments as so reduced, any such prepayment to be
accompanied by the payment of accrued interest thereon to the date of such
prepayment and any amounts payable in accordance with subsection 2.15.  Any such reduction shall be in an aggregate
amount, as to all Commitments, of not less than $10,000,000, or any whole
multiple thereof, and shall reduce permanently the amount of the Commitments
then in effect.

 

23

 

2.7.  Optional Prepayments, Mandatory
Prepayments, Deposits, Currency of Payment.

 

(a)  Optional
Prepayments.  Subject to subsection
2.15 hereof, the Companies may, at their option, prepay the Revolving Loans in
whole or in part, (i) upon at least three Business Days’ irrevocable
notice to the Administrative Agent, in the case of Eurodollar Loans, and (ii) upon
the same Business Day’s irrevocable notice to the Administrative Agent, in the
case of Floating Rate Loans, specifying the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans or Floating Rate Loans or a
combination thereof, and, if a combination thereof, the amount of prepayment
allocable to each.  Upon receipt of such
notice, the Administrative Agent shall promptly notify each Bank thereof.  If such notice is given, the Companies shall
make such prepayment, and the payment amount specified in such notice shall be
due and payable by 11:00 a.m. (Minneapolis, Minnesota time) on the date
specified therein, together with accrued interest to such date on the amount
prepaid and, in the case of Eurodollar Loans, any amounts due under subsection
2.15 hereof.

 

(b)  Mandatory
Prepayments.  If at any time the
Total Outstandings exceed the Total Commitments, the Companies shall promptly
prepay the Total Outstandings in an aggregate amount equal to such excess, such
prepayment to be applied to the Total Outstandings in such order as the Company
shall designate in writing to the Administrative Agent; provided, however,
that any prepayment of Revolving Loans shall be applied pro  rata
to the outstanding principal balances of the Banks’ respective Revolving Notes
in accordance with their respective Pro Rata Shares.

 

(c)  Foreign Currency Fluctuation.  If at any time, solely as a result of
fluctuations in currency exchange rates:

 

(i)            the
Total Outstandings exceed one hundred five percent (105%) of the Total
Commitments, the Companies for the ratable benefit of the Banks shall
immediately prepay Revolving Loans in an aggregate amount such that after
giving effect thereto the Total Outstandings are less than or equal to the
Total Commitments; or

 

(ii)           the
Dollar Amount of all outstanding Foreign Currency Loans exceeds one hundred
twenty percent (120%) of the Foreign Currency Sublimit, the Foreign Currency
Borrowers shall on such date prepay Foreign Currency Loans in an aggregate
amount such that after giving effect thereto the Dollar Amount of all such
Foreign Currency Loans is less than or equal to the Foreign Currency Sublimit.

 

(d)  Deposits.  Whenever, by the application of the
provisions of subsections 2.6, 2.7(b) or 7.2 hereof, the Companies are
required to make payments or prepayments with respect to a portion of the Total
Outstandings which consists of outstanding Acceptances or Bid Banker’s
Acceptances, the Companies shall deposit with the Administrative Agent funds in
an amount equal to the remainder of (i) the aggregate face amount of all
such outstanding Acceptances and Bid Banker’s Acceptances included in such
portion of the Total Outstandings which is to be paid or prepaid minus (ii) the
aggregate amount already on deposit with the Administrative Agent with respect
to such outstanding Acceptances and Bid Banker’s Acceptances, which funds shall
be held by the Administrative Agent as collateral for the associated
Obligations, and the Companies hereby grant to the Administrative Agent, for
the benefit of itself and the Banks, a 

 

24

 

security interest in
funds so deposited to secure such Obligations. 
The Administrative Agent shall apply the funds so deposited to such
Acceptances and Bid Banker’s Acceptances as they mature.  If the Companies deposit funds as required by
this subsection 2.7(b), then, after the maturity of the last of such
Acceptances and Bid Banker’s Acceptances and after application of the funds so
deposited to the payment of such Acceptances and Bid Banker’s Acceptances, the
Administrative Agent shall promptly remit to the Company an amount determined
by multiplying (x) the face amount of each of such Acceptances and Bid
Banker’s Acceptances by (y) a fraction, the numerator of which is the
number of days between the date of payment of such funds by the Companies and
the last maturity date of such Acceptances and Bid Banker’s Acceptances and the
denominator of which is 360 by (z) a per annum rate equal to the rate per
annum which the Administrative Agent would offer to pay on its certificates of
deposit issued in the United States at approximately 12:00 noon (Minneapolis,
Minnesota time) on the Business Day preceding the payment of such funds to the
Administrative Agent in a dollar amount comparable to the funds so paid and
having a maturity equal to the weighted average remaining term of such
Acceptances and Bid Banker’s Acceptances at the time such funds were deposited
by the Companies.

 

(e)  Currency of
Payment.  All Loans shall be repaid
and each payment of interest thereon shall be paid in the currency in which
such Loan was made.  Notwithstanding the
foregoing provisions of this Section 2.7(e), if, after the making of any
Loan in any currency other than U.S. Dollars, currency control or exchange
regulations are imposed in the country which issues such Foreign Currency, with
the result that different types of such Foreign Currency (the “New Currency”),
are introduced and the type of currency in which the Loan was made (the “Original
Currency”) no longer exists or the Companies are not able to make payment to
the Administrative Agent for the account of the Banks, in such Original
Currency, then all payments to be made by the Companies hereunder in such
currency shall be made to the Administrative Agent in such amount and such type
of the New Currency or U.S. Dollars as shall be the Equivalent Amount of such
payment otherwise due hereunder in the Original Currency, it being the
intention of the parties hereto that the Companies take all risks of the
imposition of any such currency control or exchange regulations.

 

2.8.  Conversion Options.

 

(a)  The Company may
elect from time to time to convert Loans (except Foreign Currency Loans) from
Eurodollar Loans to Floating Rate Loans (in minimum amounts of $100,000) by
giving the Administrative Agent at least two Business Days prior irrevocable
notice of such election in writing or by telex (received by the Administrative
Agent by 11:00 a.m. Minneapolis, Minnesota time), provided, that
any such conversion of Eurodollar Loans shall only be made on the last day of
an Interest Period with respect thereto. 
The Company may elect from time to time to convert Loans from Floating
Rate Loans to Eurodollar Loans (in minimum amounts of $5,000,000 and whole
multiples of $100,000 in excess thereof) by giving the Administrative Agent at
least two Business Days’ prior irrevocable notice of such election in writing
or by telex (received by the Administrative Agent by 11:00 a.m.
Minneapolis, Minnesota time).  Upon
receipt of such notice, the Administrative Agent shall promptly notify each
Bank thereof.  No Loan shall be converted
to a Eurodollar Loan if a Default or Event of Default has occurred and is
continuing on a day occurring two Business Days prior to the date of the
conversion requested by the Company.  All
conversions are subject to the limitations set forth in 

 

25

 

this Section 2.  No more than four Eurodollar Loans (excluding
Foreign Currency Loans) may be outstanding at any one time.

 

(b)  Any Eurodollar
Loan may be continued as such upon the expiration of an Interest Period with
respect thereto by compliance by the Company with the notice provisions
contained in subsection 2.4 hereof; provided, that no Eurodollar Loan
(except a Foreign Currency Loan) may be continued as such when any Default or
Event of Default has occurred and is continuing, but shall be automatically
converted to a Floating Rate Loan on the last day of the then current Interest
Period applicable thereto.  The
Administrative Agent shall notify each Bank promptly upon becoming aware that
such automatic conversion will occur.

 

2.9.  Interest Rates and Payment Dates.

 

(a)  The Eurodollar
Loans shall bear interest during each Interest Period for such Eurodollar Loans
at a rate per annum equal to the LIBOR Rate determined for such Interest Period
plus the Applicable Margin;

 

(b)  The Floating
Rate Loans shall bear interest for the period from and including the date
thereof until maturity or conversion to a Eurodollar Loan on the unpaid
principal amount thereof at a rate per annum equal to the Floating Rate plus
the Applicable Margin;

 

(c)  Foreign
Currency Loans shall bear interest during each Interest Period for such Loan at
a rate per annum equal to the LIBOR Rate determined for such Interest Period
plus the Applicable Margin.

 

(d)  On the
occurrence and during the continuance of any Event of Default each Loan shall
bear interest at the rate otherwise applicable thereto plus 2.0% per annum; and

 

(e)  Interest on the
Loans shall be payable in arrears on each Interest Payment Date and on the date
of repayment in full thereof.

 

(f)  All payments to
be made by the Companies hereunder in respect of any Foreign Currency Loans
shall be made in such funds as may then be customary for the settlement of
international transactions in such Foreign Currency for the account of the
Administrative Agent, at the office or branch from which the Loan was made not
later than 12:00 noon (local time) on the date on which such payment shall
become due.

 

2.10.  Computation of Interest and Fees.

 

(a)  Interest on
Eurodollar Loans, Foreign Currency Loans, Swing-Line Loans, Bid Banker’s
Acceptance fees, Bid Loan fees and facility fees, shall be calculated on the
basis of a 360-day year for the actual days elapsed.  Interest on Floating Rate Loans shall be
calculated on the basis of a 365/366 day year for the actual days elapsed.  The Administrative Agent shall as soon as
practicable notify the Company and each Bank of each determination of a LIBOR
Rate.  Any change in the interest rate
resulting from a change in the Floating Rate shall become effective as of the
opening of business on the day on which such change in the Floating Rate shall
become effective.  The Administrative
Agent shall as soon as practicable after becoming 

 

26

 

aware thereof notify the
Company and each Bank of the effective date and the amount of each such change
in the Floating Rate or the Reserve Percentage.

 

(b)  Each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Companies
and each Bank in the absence of manifest error. 
The Administrative Agent shall, at the request of the Company or any
Bank, deliver to the Company or such Bank a statement showing the computations
used by the Administrative Agent in determining any interest rate pursuant to
paragraph (a), (b) or (c) of subsection 2.9 hereof.

 

2.11.  Pro Rata Treatment and Payments.  Each borrowing of Revolving Loans by the
Companies from the Banks, each payment (including any prepayment) by the
Companies on account of the principal of and/or interest on the Revolving Loans
and/or on account of any facility fee hereunder and/or any reduction of the
Commitments shall be made pro  rata determined by reference to the
Pro Rata Share of each Bank.  All
payments (including prepayments) made by the Companies on account of principal,
interest and fees shall be made without set off or counterclaim to the
Administrative Agent at its office referred to in subsection 9.2 hereof, in
lawful money of the United States of America, or, as to Foreign Currency Loans,
in the applicable Foreign Currency, and in each case, in immediately available
funds.  The Administrative Agent shall
distribute, promptly upon receipt in like funds as received, (a) to each
Bank its Pro Rata Share of any payments received on Revolving Loans (including
Foreign Currency Loans), (b) to itself any payments received on Revolving
Loans and (c) to the applicable Bank any payments received on Bid
Loans.  Whenever any payment to be made
hereunder or on the Notes shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and such extension of time, in the case of a payment of principal, shall be
included in the computation of any interest on such principal.

 

2.12.  Inability to Determine Interest Rate.  In the event that the Administrative Agent
shall have determined (which determination shall be conclusive and binding upon
the Companies) that by reason of circumstances affecting the interbank
Eurodollar market adequate and reasonable means do not exist for ascertaining
the LIBOR Rate for any Interest Period with respect to (a) a proposed Revolving
Loan that the Companies have requested be made as a Eurodollar Loan, (b) a
Eurodollar Loan that will result from the requested conversion of another type
of Loan into a Eurodollar Loan or (c) the continuation of a Eurodollar
Loan beyond the expiration of the then current Interest Period with respect thereto
(any such Eurodollar Loan being herein called an “Affected Loan”), the
Administrative Agent shall forthwith give notice of such determination by
telecopy, confirmed in writing, to each Bank and to the Company at least one
day prior to, as the case may be, the requested Borrowing Date for such
Affected Loan, the conversion date of a Loan to such an Affected Loan or the
last day of such Interest Period.  If
such notice is given (i) any requested Affected Loan shall be made as a
Floating Rate Loan, (ii) any Loan that was to have been converted to an
Affected Loan shall be continued as or converted to a Floating Rate Loan, and (iii) any
outstanding Affected Loan shall be converted, on the last day of the then
current Interest Period with respect thereto, to a Floating Rate Loan.  Until such notice has been withdrawn by the
Administrative Agent, no further Affected Loan shall be made and the Company
shall not have the right to convert Loans of another type to Affected Loans.

 

27

 

2.13.  Illegality.  Notwithstanding any other provisions herein,
if any law, regulation, treaty or directive or any change therein or in the
interpretation or application thereof, shall in the reasonable opinion of any
of the Banks make it unlawful for any Bank to make, maintain or fund Eurodollar
Loans as contemplated by this Agreement, or shall materially restrict the
authority of such Bank to purchase or sell or take deposits of Eurodollars, (a) the
commitment of such Bank hereunder to make Eurodollar Loans or to convert
Floating Rate Loans to Eurodollar Loans shall forthwith be canceled and (b) such
Bank’s Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Floating Rate Loans on the next succeeding Interest Payment
Date or within such earlier period as required by law.  The Companies hereby agree promptly to pay any
Bank, upon its demand, any additional amounts necessary to compensate such Bank
for any costs incurred by such Bank in making any conversion in accordance with
this subsection 2.13 including, but not limited to, any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Loans hereunder and any loss incurred in liquidating or
re-employing deposits from which such funds were obtained (such Bank’s notice
of such costs, as certified to the Company through the Administrative Agent, to
be conclusive absent manifest error). 
The agreements in this subsection shall survive the termination of this
Agreement and payment of the Notes and all other amounts payable hereunder.

 

2.14.  Requirements of Law.

 

(a)  In the event
that any law, regulation, treaty or directive or any change therein or in the
interpretation or application thereof or compliance by any Bank with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority, agency or instrumentality:

 

(1) 
does or shall subject any Bank to any tax of any kind whatsoever with respect
to this Agreement or any Eurodollar Loans or Foreign Currency Loans made
hereunder, or change the basis of taxation of payments to such Bank of
principal, Bid Banker’s Acceptance, Bid Loan fees or facility fees, interest or
any other amount payable hereunder (except for changes in the rate of tax on
the overall net income of such Bank);

 

(2) 
does or shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of such
Bank that are not otherwise included in the determination of the LIBOR Rate
hereunder;

 

(3) 
does or shall impose on such Bank any other condition;

 

and the result of any of the foregoing is to increase
the cost to such Bank of making, renewing or maintaining any Eurodollar Loan or
Foreign Currency Loan or to reduce any amount receivable in respect thereof
then, in any such case, the Companies shall promptly pay such Bank, upon its
demand, any additional amounts necessary to compensate such Bank for 

 

28

 

such
additional cost or reduced amounts receivable which such Bank deems to be
material as determined by such Bank with respect to this Agreement, or the
Eurodollar Loans or Foreign Currency Loans made hereunder.

 

(b)  In the event
that any Bank shall have determined that the adoption of any law, rule,
regulation, decree or regulatory requirement regarding capital adequacy, or any
change therein or in the interpretation or application thereof or compliance by
the Bank or any corporation controlling the Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) from any
central bank or other Governmental Authority, agency or instrumentality does or
shall have the effect of increasing the amount of capital required to be
maintained by such Bank or such corporation with respect to Loans and that Bank’s
Commitment above the amount of capital which would otherwise be required to be
maintained by such Bank with respect thereto (taking into account such Bank’s
internal policies and practices with respect to capital maintenance as of the
date hereof), then and in any such case such Bank may, at any time within a
reasonable period after the additional capital is required, notify the Company,
and the Companies shall pay on demand such amounts as such Bank may specify to
be necessary to compensate such other Bank for such additional capital,
together with interest on such amount from the date demanded until payment in
full thereof at a rate equal at all times to the Floating Rate plus the
Applicable Margin per annum.  The
determination by a Bank of any amount due pursuant to this subsection 2.14(b) as
set forth in a certificate setting forth the calculation thereof in reasonable
detail, shall, in the absence of manifest error, be final and conclusive and
binding on all of the parties hereto. 
Each Bank, upon determining in good faith that any additional amounts
will be payable pursuant to this subsection, will give prompt written notice
thereof to the Company, which notice shall show the basis for calculation of
such additional amounts, although the failure to give any such notice shall not
release or diminish any of the Companies’ obligations to pay additional amounts
pursuant to this subsection.

 

(c)  If a Bank
becomes entitled to claim any additional amounts pursuant to this subsection,
it shall promptly notify the Company, through the Administrative Agent, of the
event by reason of which it has become so entitled.  A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by a Bank, through the
Administrative Agent, to the Company shall be conclusive in the absence of
manifest error.

 

2.15.  Funding Losses.  The Companies agree to compensate each Bank
upon its written request, for all losses, expenses and liabilities (including,
without limitation, any interest paid by such Bank to lenders of funds borrowed
by it to make or carry Eurodollar Loans to the extent not recovered by such
Bank in connection with the re-employment of such funds) which such Bank may
sustain: (a) if for any reason, other than a default by such Bank, a
funding of a Eurodollar Loan does not occur on the date specified therefore in
the Company’s request or notice as to such Eurodollar Loan under Section 2.4
or 2.7 hereof, or (b) if, for whatever reason (including, but not limited
to, acceleration of the maturity of the Loans following an Event of Default),
any repayment or prepayment of a Eurodollar Loan or a conversion pursuant to Section 2.8
occurs on any day other than the last day of the Interest Period applicable
thereto.  A Bank’s request for
compensation shall set forth the basis for the amount requested and shall be
final, conclusive and binding, absent manifest error.  This covenant shall survive termination of
this Agreement and payment of the outstanding Notes.

 

29

 

2.16.  Use of Proceeds of Loans.  The proceeds of the Loans shall be used by
the Companies for general corporate purposes, including, but not limited to,
printing press progress payments, deposits, lease payments, real estate
expansion, press and bindery upgrades, auxiliary and miscellaneous equipment
and acquisitions.  It is understood and
agreed that the Loan proceeds will directly and/or indirectly benefit all of
the Companies, which are engaged in a common enterprise, and that it is
inappropriate, therefore, to apportion an advance of the Loan proceeds to any
one of the Companies.

 

2.17.  The Swing-Line Loan Facility.

 

(a)  Swing-Line
Commitments.  Upon the terms and
subject to the conditions hereof, the Administrative Agent, in its capacity as
a Bank, agrees, at any time and from time to time during the Commitment Period,
to make loans (“Swing-Line Loans”) on a revolving credit basis in an aggregate
principal amount at any time outstanding not to exceed $30,000,000; provided,
however, that the Administrative Agent shall not be obligated make a
Swing-Line Loan if, after giving effect to the making of such Swing-Line Loan
and any payment of Outstandings made directly by the Administrative Agent, for
the account of the Companies, from the proceeds of such Swing-Line Loan, the
Total Outstandings would exceed the Total Commitments.  The Swing-Line Loans shall be evidenced by a
promissory note of the Companies substantially in the form of Exhibit G-2
hereto (the “Swing-Line Note”), shall bear interest on the aggregate unpaid
principal balance thereof outstanding from time to time at either the Floating
Rate or a rate agreed upon in a separate writing by the Company and the
Administrative Agent.  Swing-Line Loans
shall mature on the Termination Date, when all amounts then outstanding under
the Swing-Line Note shall be due and payable in full.  Interest on any Swing-Line Loan shall be
payable on the last day of each March, June, September and December and
at maturity.  Principal of any Swing-Line
Loan may be prepaid at any time in whole or in part (in minimum amounts of
$100,000 or an integral multiple thereof) and without premium or penalty of any
kind.  Notice of prepayment of Swing-Line
Loans shall be given to the Administrative Agent by the Company orally
confirmed in writing by telecopier or in writing by telecopier, no later than
2:00 p.m. on the date of such prepayment. 
The Administrative Agent, in its capacity as a Bank is hereby authorized
to record the date and amount of each Swing-Line Loan and the date and amount
of each payment or prepayment of principal thereof in its books and records
and/or on a schedule attached to the Swing-Line Note; provided, however, that
any failure by the Administrative Agent to make any such entry or error in
making such entry shall not limit or otherwise affect the obligations of the
Companies hereunder and on the Swing-Line Note.

 

(b)  Procedure
for Borrowing.  The Companies may
borrow Swing-Line Loans during the Commitment Period on any Business Day; provided,
that the Company shall give the Administrative Agent irrevocable notice in
writing by telecopier or orally confirmed the same day in writing by
telecopier, which notice must be received by the Administrative Agent prior to
2:00 p.m., Minneapolis, Minnesota time, on the requested Borrowing Date,
specifying in each case the amount thereof and the requested Borrowing
Date.  Any written request for a
Swing-Line Loan shall be in the form of Exhibit Q or another form
reasonably acceptable to the Administrative Agent containing the information
required by Exhibit Q, and shall be signed by a Responsible Officer or a
person designated as authorized to make such requests in a writing signed by a
Responsible Officer.  Any oral request
for a Swing-Line Loan shall be made by a Responsible Officer or a person
designated as authorized to make such requests in a writing

 

30

 

signed by a Responsible
Officer and shall be confirmed by a writing in the form of Exhibit Q or
other form reasonably acceptable to the Administrative Agent containing the
information required by Exhibit Q, signed by a Responsible Officer or a
person designated as authorized to make such requests in a writing signed by a
Responsible Officer, which written confirmation shall be delivered to the
Administrative Agent by telecopier on the Borrowing Date of the Swing-Line Loan
in question.  Each borrowing of Swing-Line Loans
shall be in an aggregate principal amount of $100,000 or a whole multiple of
$100,000 in excess thereof.  Upon receipt
of such notice from the Company, the Administrative Agent will make the
requested Swing-Line Loan available to the Companies on such date by crediting
the account of the Company on the books of the Administrative Agent with the
aggregate of such amounts or in such manner as the Company may request in
writing.

 

(c)  Refinancing
of Swing-Line Loans by Banks.  The
Administrative Agent, at any time and in its sole discretion, may, upon notice
given to each Bank, request that each Bank make a Revolving Loan in an amount
equal to its Pro Rata Share of the aggregate unpaid principal amount of any
outstanding Swing-Line Loans for the purpose of refinancing such Swing-Line
Loans.  Each Bank shall, upon receipt of
such notice from the Administrative Agent, make a Revolving Loan (regardless of
noncompliance with subsections 4.5 through 4.9) in an amount equal to that Bank’s
respective Pro Rata Share as specified in such notice and make the proceeds of
such Revolving Loan available to the Administrative Agent, in same day funds,
at the office of the Administrative Agent specified in such notice, not later
than 1:00 P.M. (Minneapolis, Minnesota time) on the Business Day after the
date that Bank was notified by the Administrative Agent, which payments by the
Banks shall be applied by the Administrative Agent to the payment of principal
of the Swing-Line Loans.  In the event
that any Bank fails to make the proceeds of its Revolving Loan available to the
Administrative Agent as provided in this subsection 2.17(c), the Administrative
Agent shall be entitled to recover such amount on demand from such Bank
together with interest at the customary rate set by the Administrative Agent
for the correction of errors among banks for three Business Days and thereafter
at the Prime Rate.

 

2.18.  The Acceptance Facility.

 

(a)  Acceptance
Commitments.  Upon the terms and
subject to the conditions hereof, the Administrative Agent agrees, at any time
and from time to time during the Commitment Period, to create Acceptances for
the Company maturing on a Business Day not less than 30 days or more than 180
days after the creation thereof and in any event not later than the Termination
Date; provided, that the Administrative Agent shall not create an
Acceptance whose face amount exceeds the Total Available Commitments or would
cause the Total Outstandings to exceed the Total Commitments.  Each Acceptance shall be created by the
Administrative Agent’s acceptance of Drafts drawn on it in accordance with the
terms of this Agreement.  Each drawing (a
“Drawing”) shall be in aggregate face amount of $5,000,000 or an
integral multiple of $100,000 in excess thereof.

 

(b)  Notice of
Drawing.  Whenever the Company
desires to make a Drawing, it shall prior to 11:00 a.m. (Minneapolis,
Minnesota time) on the proposed date of such requested drawing (each a “Drawing
Date”) give the Administrative Agent notice by telephone or telecopier of
the requested Drawing consisting of the information and certification set forth
in the form of notice of drawing attached hereto as Exhibit H (a “Notice
of Drawing”).  Such notice shall be 

 

31

 

irrevocable and the
Company shall promptly confirm any such telephonic notice by transmitting a
Notice of Drawing to the Administrative Agent by telecopier.  Upon the Administrative Agent’s request, the
Company shall provide such information concerning the underlying transaction(s) as
necessary to establish to the satisfaction of the Administrative Agent that the
document created by the acceptance of such Draft or Drafts will qualify as an
Acceptance as defined hereunder.

 

(c)  Preparation
of Drafts and Creation of Acceptances. 
To enable the Administrative Agent to create Acceptances in the manner
specified in this subsection 2.18, the Company shall supply the Administrative
Agent, upon execution of the Agreement, and thereafter forthwith upon request
by the Administrative Agent, with a sufficient number of signed blank drafts,
in the form of Exhibit I hereto or such other form as the Administrative
Agent may customarily use in creating bankers’ acceptances and as may be
acceptable to the Company (a “Draft”) as the Administrative Agent may
reasonably request.  The Administrative
Agent shall hold such drafts in safekeeping to be filled in and completed by
the Administrative Agent as Acceptances from information provided by the
Company in accordance with subsections 2.18(b) and (c).  In case any authorized signatory of the
Company whose signature shall appear on any Draft shall cease to have such
authority before the creation of an Acceptance with respect to such Draft, such
signature shall nevertheless be valid and sufficient for all purposes as if
such authority had remained in force at the time of such creation.  The Company hereby authorizes the
Administrative Agent to complete a Draft in respect of a requested Drawing in
accordance with such information, which Draft shall be dated the Drawing Date
and shall mature on the date specified in the relevant Notice of Drawing
provided such date is a date permitted under subsection 2.18(a) hereof.  Not later than 12:00 noon (Minneapolis,
Minnesota time) on the proposed Drawing Date, the Administrative Agent shall,
subject to the satisfaction of the applicable conditions set forth in
subsections 4.5 through 4.9 hereof, duly accept and discount such Draft at a
price equal to the face amount thereof less the sum of (i) the then
prevailing banker’s acceptance discount rate then being generally quoted by the
Administrative Agent applied to that face amount, calculated for the period
from the date of such Draft to the date of its maturity on the basis of a year
of 360 days (unless the Administrative Agent quoted a banker’s acceptance
discount rate in connection with the Company’s giving of the relevant Notice of
Drawing which quoted rate was accepted by the Company not more than 15 minutes
prior to its giving of such Notice, in which case such quoted rate shall
control) (the “Discount Charge”), and (ii) the applicable
Commission.  Not later than 1:00 p.m.
on the Drawing Date, the Administrative Agent shall make the amount of the
proceeds of the discount of each Draft so accepted and discounted available to
the Company.  Notwithstanding the
foregoing, the Administrative Agent shall not be obligated to create or
discount any Acceptance hereunder if such Acceptance would not be eligible for
discount at a Federal Reserve Bank under applicable rules or regulations,
or would not meet the requirements of paragraph 7 of Section 13 of the
Federal Reserve Act, as amended, or if any liability of the Administrative
Agent that would arise from the creation of such Acceptance would constitute a
deposit for which the Administrative Agent would be required to maintain
reserves under Regulation D of the Board as from time to time in effect.  The Companies acknowledge that the
Administrative Agent’s decision to accept and discount any Draft offered for
acceptance and discount hereunder will be made in reliance upon the truth of
the representations made by the Companies in each such Notice of Drawing
establishing the eligibility for discount of any such Acceptance.  The Companies will indemnify and save the
Administrative Agent and each Bank harmless from any loss or liability incurred
by 

 

32

 

the Administrative Agent
and such Banks if any Acceptances are determined to be ineligible for discount
or subject to reserves by reason of any misrepresentation made by the Company.

 

(d)  Acceptance
Obligation of the Companies.  The
Administrative Agent agrees to notify the Company and the Banks on or before
the date the Administrative Agent honors a Draft as to which an Acceptance was
created.  The Companies shall reimburse
the Administrative Agent on such date in an amount in same day funds equal to
the face amount of each such Draft; provided that, anything contained in
this Agreement to the contrary notwithstanding, (i) unless the Company
shall have notified the Administrative Agent prior to 1:00 P.M.
(Minneapolis, Minnesota time) on the Business Day immediately prior to such
date that the Companies intend to reimburse the Administrative Agent for the
face amount of each such Draft with funds other than the proceeds of Loans, the
Company shall be deemed to have given notice to the Administrative Agent
pursuant to subsection 2.4, requesting the Banks to make, on such maturity
date, Revolving Loans as Floating Rate Loans in an amount equal to such face
amounts, and (ii) subject to satisfaction or waiver of the conditions
specified in subsections 4.5 through 4.9, the Banks shall, on such maturity
date, make such Revolving Loans as Floating Rate Loans in such face amounts,
the proceeds of which shall be applied directly by the Administrative Agent to
reimburse the Administrative Agent for such face amounts.

 

(e)  Prepayment.  Acceptances may not be prepaid.

 

(f)  Risk
Participations in Acceptances.

 

(1)  Grant and
Acceptance of Risk Participations in Acceptances.  Upon the terms and subject to the conditions
of this Agreement and effective on the applicable Drawing Date, the
Administrative Agent hereby grants to each Bank (in such capacity, a “Bank”),
and each Bank hereby accepts from the Administrative Agent, an undivided risk
participation in and to each Acceptance and the Administrative Agent’s
obligations thereunder (an “Acceptance Participation”) and, to the
extent hereinafter provided, the Companies’ obligation to reimburse the
Administrative Agent for the amount of any Draft honored by the Administrative
Agent, with respect to each such Acceptance, equal to each Bank’s Pro Rata
Share of the face amount of each such Acceptance.  The Administrative Agent shall give each Bank
prompt notice of the creation of each Acceptance in the form of a notice of
creation of Acceptance and grant of an Acceptance Participation substantially
in the form of Exhibit J hereto. 
Such notice shall specify the face amount of such Acceptance, the
maturity date thereof, the face amount of each Bank’s undivided interest
therein and the amount of the Acceptance Commission applicable to such
Acceptance.

 

(2)  Interest of
Banks.  Each Bank shall be entitled
to its Pro Rata Share of the Acceptance Commission applicable to each
Acceptance at such time as such Acceptance has been paid in full by the
Companies.  Upon receipt of payment in
full of any Acceptance, the Administrative Agent shall promptly remit to each Bank
such Bank’s Pro Rata Share of the Acceptance Commission applicable to such
Acceptance.

 

(3)  Payment by
Banks.  The Administrative Agent
agrees to notify the Banks in the event that the Companies shall fail to
reimburse the Administrative Agent as provided in subsection 2.18(d) above
in an amount equal to the face amount of each Draft as to which an Acceptance
was created.  The Administrative Agent
shall promptly notify each Bank of such 

 

33

 

unreimbursed face amounts
and of such Bank’s respective participation therein.  Each Bank shall then make available to the
Administrative Agent (regardless of noncompliance with subsections 4.5 through
4.9) an amount equal to that Bank’s Pro Rata Share of the unreimbursed amount,
in same day funds, at the office of the Administrative Agent specified in such
notice, not later than 1:00 P.M. (Minneapolis, Minnesota time) on the
Business Day after the date that Bank was notified by the Administrative
Agent.  In the event that any Bank fails
to make available to the Administrative Agent the amount of such Bank’s
participation in such unreimbursed face amounts as provided in this subsection
2.18(f)(3), the Administrative Agent shall be entitled to recover such amount
on demand from such Bank together with interest at the customary rate set by
the Administrative Agent for the correction of errors among banks for three
Business Days and thereafter at the Prime Rate. 
The Administrative Agent shall distribute to each Bank which has paid
all amounts payable by it under this subsection 2.18(f)(3) with respect to
any unreimbursed amount of any Draft honored by the Administrative Agent such
Bank’s Pro Rata Share of all payments subsequently received by the
Administrative Agent from the Companies in reimbursement of the previously
unreimbursed amounts when such payments are received.  If any portion of any amount paid to the
Administrative Agent with respect to any Acceptance should be recovered by or
on behalf of the Companies from the Administrative Agent in bankruptcy, by
assignment for the benefit of creditors or otherwise, the loss of the amount so
recovered shall be ratably shared among all the Banks in the manner
contemplated by Section 9.13 hereof.

 

(g)  Obligations
Absolute.  The obligation of the
Companies to reimburse the Administrative Agent for the face amount of Drafts
as to which an Acceptance was created and the obligations of the Banks under
subsection 2.18(f) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, the following circumstances:

 

(1)  any lack of
validity or enforceability of any Acceptance, Draft or related documents;

 

(2)  the existence
of any claim, setoff, defense or other right which any Company may have at any
time against a holder or any transferee of any Acceptance (or any persons or
entities for whom any such transferee may be acting), the Administrative Agent,
any other Bank or any other Person, whether in connection with this Agreement,
the transactions contemplated herein or any unrelated transaction (including
any underlying transaction between the Company or one of its Subsidiaries and
the holder of the Acceptance or a buyer or seller of goods from or to the
Companies);

 

(3)  any draft,
demand, certificate or any other document presented with respect to any
Acceptance proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;

 

(4)  payment by the
Administrative Agent under any Acceptance against presentation of a demand,
draft or certificate or other document which does not comply with the terms of
such Acceptance; provided that such payment does not constitute gross
negligence or willful misconduct of the Administrative Agent;

 

34

 

(5)  any adverse
change in the condition (financial or otherwise) of the Companies;

 

(6)  any breach of
this Agreement by the Companies or any Bank;

 

(7)  any termination
or reduction of the Commitments;

 

(8)  the
circumstance that the aggregate amount of Floating Rate Loans made pursuant to
this subsection 2.18 would exceed the Total Available Commitments;

 

(9) 
any other circumstance or happening whatsoever, which is similar to any of the
foregoing; or

 

(10) 
the fact that a Default or Event of Default shall have occurred and be
continuing.

 

(h)  Additional
Payments.  If by reason of (a) any
change in, or adoption of, any applicable law, regulation, rule, decree or
regulatory requirement or any change in the interpretation or application by
any judicial or regulatory authority of any law, regulation, rule, decree or
regulatory requirement or (b) compliance by the Administrative Agent or
any other Bank with any direction, request or requirement (whether or not
having the force of law) of any Governmental Authority or monetary authority
including, without limitation, Regulation D of the Board:

 

(1)  the
Administrative Agent or any Bank shall be subject to any tax, levy, charge or
withholding of any nature or to any variation thereof or to any penalty with
respect to the maintenance or fulfillment of its obligations under this
subsection 2.18, whether directly or by such being imposed on or suffered by
the Administrative Agent or any Bank;

 

(2)  any reserve,
deposit, or (with respect to the face amount of Drafts as to which an unmatured
Acceptance was created only) capital adequacy or similar requirement is or
shall be applicable, imposed or modified in respect of any Acceptance issued by
the Administrative Agent or participations therein purchased by any Bank; or

 

(3)  there shall be
imposed on the Administrative Agent or any Bank any other condition regarding
this subsection 2.18, any Acceptance or any participation therein;

 

and the result of the foregoing is directly or
indirectly to increase the cost to the Administrative Agent or any Bank of
issuing, making or maintaining any Acceptance or of purchasing or maintaining
any participation therein, or to reduce the amount receivable in respect
thereof by the Administrative Agent or any Bank, or in the case of capital
adequacy requirements, the result is to increase the amount of capital required
to be maintained by the Administrative Agent or such Bank with respect to the
face amount of Drafts as to which an unmatured Acceptance was created (or a
participation therein) above the amount of capital which would otherwise be
required to be maintained by the Administrative Agent or such Bank with respect
thereto (taking into account the Administrative Agent or such Bank’s internal
policies and practices with respect to capital maintenance as of the date
hereof), then and in any such case the Administrative Agent or such Bank may,
at any time within a reasonable period after the 

 

35

 

additional
cost is incurred or additional capital is required or the amount received is
reduced, notify the Company, and the Companies shall pay on demand such amounts
as the Administrative Agent or such other Bank may specify to be necessary to
compensate the Administrative Agent or such other Bank for such additional cost
or capital or reduced receipt, together with interest on such amount from the
date demanded until payment in full thereof at a rate equal at all times to the
Floating Rate plus the Applicable Margin per annum.  The determination by the Administrative Agent
or any other Bank, as the case may be, of any amount due pursuant to this
subsection 2.18(h) as set forth in a certificate setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest
error, be final and conclusive and binding on all of the parties hereto.  Each Bank, upon determining in good faith
that any additional amounts will be payable pursuant to this subsection, will
give prompt written notice thereof to the Company, which notice shall show the
basis for calculation of such additional amounts, although the failure to give
any such notice shall not release or diminish any of the Companies’ obligations
to pay additional amounts pursuant to this subsection.

 

(i)  Indemnification;
Nature of the Administrative Agent’s Duties.  In addition to amounts payable as elsewhere
provided in this subsection 2.18, the Companies hereby agree to protect,
indemnify, pay and save the Administrative Agent harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys’ fees and allocated costs of internal
counsel) which the Administrative Agent may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of an Acceptance,
other than as a result of the gross negligence or willful misconduct of the
Administrative Agent as determined by a court of competent jurisdiction or (ii) the
failure of the Administrative Agent to honor a Draft under an Acceptance as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or Governmental Authority.  As between the Company and the Administrative
Agent, the Company assumes all risks of the acts and omissions of, or misuse of
the Acceptances issued by the Administrative Agent by, the respective holders
of such Acceptances.  In furtherance and
not in limitation of the foregoing, the Administrative Agent shall not be
responsible:  (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
such Acceptance, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Acceptance or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the
beneficiary of any such Acceptance to comply fully with conditions required in
order to draw upon such Acceptance; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for
errors in interpretation of technical terms; (vi) for any loss or delay in
the transmission or other handling of any document related to any such
Acceptance or of the proceeds thereof; and (vii) for any consequences
arising from causes beyond the control of the Administrative Agent.  None of the above shall affect, impair, or
prevent the vesting of any of the Administrative Agent’s rights or powers
hereunder.  In furtherance and extension
and not in limitation of the specific provisions hereinabove set forth, any
action taken or omitted by the Administrative Agent under or in connection with
the Acceptances issued by it or the related certificates, if taken or omitted
in good faith, shall not put the Administrative Agent under any resulting
liability to any Company.

 

36

 

(j)  Withdrawal
from Acceptance Facility.  Each Bank
shall have the right to withdraw from the Acceptance Facility created by this
subsection 2.18, effective as of the November 1, 2007 and continuing on November 1
of each odd numbered year thereafter while this Agreement is in effect, by
delivering written notice of such withdrawal to the Administrative Agent and
the Company within the 30 day period ending on the effective date of the
withdrawal.  Each such notice shall state
that the withdrawing Bank wishes to withdraw from the Acceptance Facility shall
specify the effective date of the withdrawal, and shall refer to this
subsection 2.18(j).  The Administrative
Agent shall promptly deliver copies of any withdrawal notice to each other
Bank.  A withdrawing Bank (including the
Administrative Agent, in its capacity as a Bank) shall have no obligation to
purchase risk participations in any Acceptance created after the effective date
of the withdrawal.  If one or more, but less
than all, Banks elect to withdraw from the Acceptance Facility, the provisions
of this subsection 2.18 shall continue to apply to the Acceptance Facility,
except that:

 

(1)  the
Administrative Agent shall not create an Acceptance whose face amount would
cause the Total Outstandings to exceed the remainder of (A) the sum of,
without duplication, (i) the aggregate unpaid face amount of all
outstanding Acceptances and Bid Bankers Acceptances plus (ii) the
aggregate outstanding obligations to make payment with respect to Acceptances
and Bid Bankers Acceptances, minus (B) the withdrawing Bank’s
Commitment; and

 

(2)  the
non-withdrawing Banks’ “Pro Rata Shares” (for purposes of determining risk
participations in Acceptances created after the effective date of the
withdrawal only) shall be percentages determined by dividing each
non-withdrawing Bank’s Pro Rata Share by the aggregate Pro Rata Shares of all
non-withdrawing Banks.

 

Withdrawal by a Bank from the Acceptance Facility
shall have no effect on that Bank’s obligation to purchase risk participations
in Acceptances created prior to the effective date of the withdrawal, nor on
that Bank’s obligations under any portion of this Agreement other than this
subsection 2.18.

 

2.19  The Bid Banker’s Acceptance Facility.

 

(a)  Establishment
of Bid Banker’s Acceptance Facility. 
The Banks agree to make available to the Company a Bid Banker’s
Acceptance Facility, pursuant to which the Company may, as provided in this
subsection 2.19, request the Banks, through the Administrative Agent, to make
offers to create and discount Bid Banker’s Acceptances for the Company in an
aggregate face amount not exceeding the Total Commitments; provided, however,
that a Bank shall not create and discount a Bid Banker’s Acceptance if, after
giving effect thereto, the Total Outstandings would exceed the Total
Commitments.

 

(b)  Bid Banker’s
Acceptance Tender Request Notice. 
When the Company wishes to request offers to create Bid Banker’s
Acceptances, it shall transmit to the Administrative Agent a Bid Banker’s
Acceptance Tender Request Notice so as to be received no later than 10:00 a.m.
(Minneapolis, Minnesota time) on the second Business Day prior to the Bid
Banker’s Acceptance Creation Date proposed in such Notice, specifying:

 

37

 

(1)  the proposed
Bid Banker’s Acceptance Creation Date which shall be any Business Day 30 days
or more prior to the Termination Date;

 

(2)  the aggregate
face amount of the proposed Bid Banker’s Acceptance Financing which shall be a
minimum amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof;

 

(3)  the maturity
dates (which shall not exceed four) of such Bid Banker’s Acceptances to be made
as part of such Bid Banker’s Acceptance Financing (each of which maturity dates
shall be a Business Day and may not be earlier than the date occurring 30 days
after the proposed Bid Banker’s Acceptance Creation Date or later than the date
occurring the earlier of the Termination Date or 180 days after the proposed
Bid Banker’s Acceptance Creation Date);

 

(4)  a properly
completed form of Bid Banker’s Acceptance Certificate; and

 

(5)  any other terms
to be applicable to such Bid Banker’s Acceptance Financing.

 

Each Bid Banker’s
Acceptance Tender Request Notice shall be given or signed on behalf of the
Company by an officer or employee of the Company previously identified to the
Administrative Agent in a writing satisfactory to the Administrative Agent as
authorized to give Bid Banker’s Acceptance Tender Request Notices.

 

(c)  Invitation
to Tender for Bid Banker’s Acceptances. 
Promptly upon receipt of each Bid Banker’s Acceptance Tender Request
Notice and in any event not later than 3:00 p.m. (Minneapolis, Minnesota
time) on the second Business Day prior to the Bid Banker’s Acceptance Creation
Date specified therein, provided the aggregate face amount of the proposed Bid
Banker’s Acceptance Financing does not exceed the limitations set forth in
subsection 2.19(a), the Administrative Agent shall send to the Banks by telex
or telecopier an Invitation to Tender for Bid Banker’s Acceptances which shall
constitute an invitation by the Company to each Bank to submit Bid Banker’s
Acceptance Tenders offering to create Bid Banker’s Acceptances to which such
Bid Banker’s Acceptance Tender Request Notice relates in accordance with
subsection 2.19(d) hereof.  Each Bid
Banker’s Acceptance Tender Request Notice shall be irrevocable.

 

(d)  Submission
and Contents of Bid Banker’s Acceptance Tenders.

 

(1)  Each Bank may
submit one or more bids (each, a “Bid Banker’s Acceptance Tender”)
containing an offer or offers to accept and discount Bid Banker’s Acceptances
in response to any Invitation to Tender for Bid Banker’s Acceptances.  Each Bid Banker’s Acceptance Tender must
comply with the requirements of this subsection 2.19(d) and must be
submitted to the Administrative Agent by telephone so as to be received not
later than 8:45 a.m. (Minneapolis, Minnesota time) on the proposed Bid
Banker’s Acceptance Creation Date; provided, that if the Administrative
Agent in its capacity as a Bank shall, in its sole discretion, elect to submit
a Bid Banker’s Acceptance Tender, it shall submit the same to the Company by
telephone not later than 8:30 a.m. (Minneapolis, Minnesota time) on the
proposed Bid Banker’s Acceptance Creation Date. 
No Bank shall discuss the proposed or actual terms of any Bid Banker’s
Acceptance Tender with any other Bank before 9:00 a.m. (Minneapolis,
Minnesota 

 

38

 

time)on the proposed Bid
Banker’s Acceptance Date.  Subject to
satisfaction of the applicable conditions set forth in subsections 4.5 through
4.9 hereof, any Bid Banker’s Acceptance Tender shall be irrevocable prior to
9:30 a.m. (Minneapolis, Minnesota time) on the proposed Bid Banker’s
Acceptance Creation Date except (x) with the written consent of the
Administrative Agent given on the written instructions of the Company, and (y) except
to the extent specifically set forth below in the event of a Partially Accepted
Bid.

 

(2)  Each Bid Banker’s
Acceptance Tender shall specify:

 

(A) 
the applicable Bid Banker’s Acceptance Creation Date;

 

(B) 
the face amount of Bid Banker’s Acceptances for which each offer is being made
for each maturity date, which face amount shall be $2,000,000 or an integral
multiple of $1,000,000 in excess thereof and may not exceed, in the aggregate
as to all such Bid Banker’s Acceptances, the face amount of Bid Banker’s
Acceptances for which offers were requested (although such Bid Banker’s
Acceptance Tender may include any number of separate offers to create Bid
Banker’s Acceptances for the same or different maturity dates at different
fixed discount rates, each of which offers shall be capable of acceptance
hereunder by the Company);

 

(C) 
the per annum (based on actual days elapsed and a year of 360 days) fixed
discount rate (which shall include any acceptance or other commission) offered
on each such face amount of Bid Banker’s Acceptances (expressed to three
decimal places); and

 

(D) 
the identity of the tendering Bank.

 

(3)  any Bid Banker’s
Acceptance Tender shall be disregarded that:

 

(A) 
does not specify all the information required by subsection 2.19(d)(2) hereof;

 

(B) 
contains qualifying, conditional or similar language;

 

(C) 
proposes terms other than or in addition to those set forth in the applicable
Invitation to Tender for Bid Banker’s Acceptances; or

 

(D) 
is received by the Administrative Agent after the time set forth in subsection
2.19(d)(1) hereof.

 

If any Bank shall elect
not to submit a Bid Banker’s Acceptance Tender, such Bank shall notify the
Administrative Agent to such effect before 9:00 a.m. (Minneapolis,
Minnesota time) on the Business Day prior to the Bid Banker’s Acceptance
Creation Date specified in the applicable Bid Banker’s Acceptance Tender
Request Notice and such Bank shall not be obligated to, and shall not, create
any Bid Banker’s Acceptance (or any part thereof) specified in said Notice; provided,
that the failure of any Bank to give such notice shall not cause such Bank 

 

39

 

to be obligated to create
or discount any such Bid Banker’s Acceptance as part of such proposed Bid
Banker’s Acceptance Financing.

 

(e)  Notice to
the Company.  As soon as reasonably
practicable, and in no event later than 9:00 a.m. (Minneapolis, Minnesota
time) on the proposed Bid Banker’s Acceptance Creation Date, the Administrative
Agent shall notify the Company by telephone of the terms of each Bid Banker’s
Acceptance Tender submitted by a Bank that complies with subsection 2.19(d) hereof.

 

(f)  Acceptance
and Rejection of Bid Banker’s Acceptance Tenders.

 

(1)  Acceptance
and Notice by the Company.  As soon
as reasonably practicable and in no event later than 9:15 a.m.
(Minneapolis, Minnesota time) on the proposed Bid Banker’s Acceptance Creation
Date, the Company shall notify the Administrative Agent by telephone of its
acceptance or rejection of the offers contained in the Bid Banker’s Acceptance
Tenders of which it was notified pursuant to subsection 2.19(e) hereof.  Such notification from the Company shall
specify the aggregate face amount of offers at each discount rate for each
maturity date that are accepted.  The
Company may accept any of the Bid Banker’s Acceptance Tenders in whole or in
part; provided, that:

 

(A)  the aggregate
face amount of the Bid Banker’s Acceptances in respect of which offers are
accepted may not exceed the aggregate face amount requested in the related Bid
Banker’s Acceptance Tender Request Notice; and

 

(B) 
acceptances of Bid Banker’s Acceptance Tenders made in response to the same
Invitation to Tender for Bid Banker’s Acceptances may only be made on the basis
of ascending discount rates, provided  that each resulting Bid
Banker’s Acceptance must be in a face amount of $1,000,000 or an integral multiple
of $100,000 in excess thereof.

 

If the Company rejects
all Bid Banker’s Acceptance Tenders, the proposed Bid Banker’s Acceptance
Financing shall be canceled and the Administrative Agent shall give the Banks
prompt notice to that effect.

 

If (x) the aggregate
face amount of the Bid Banker’s Acceptances offered by the Banks in their Bid
Banker’s Acceptance Tenders aggregate less than, or (y) the Company does
not accept offers contained in Bid Banker’s Acceptance Tenders in an aggregate
face amount equal to, the aggregate face amount requested in the related Bid
Banker’s Acceptance Tender Request Notice (either such event, a “Partially
Accepted Bid”), the Banks whose offers are accepted shall have the right
(but not the obligation) to revoke those offers as hereinafter set forth.  In the event that a Partially Accepted Bid
has occurred, the Company shall notify the Administrative Agent by telephone
prior to 9:15 a.m. (Minneapolis, Minnesota time) on the proposed Bid
Banker’s Acceptance Creation Date of the occurrence and of which Bid Banker’s
Acceptance Tenders the Company accepts. 
By 9:30 a.m. (Minneapolis, Minnesota time), the Administrative
Agent shall notify by telephone those Banks whose offers have been accepted
that a Partially Accepted Bid has occurred, and shall inform those Banks of the
sum of the accepted Bid Banker’s Acceptance Tenders and whether that Bank’s
offer or offers have been accepted, and whether in whole or in part, specifying
the date, face amount and maturity date of each Bid Banker’s Acceptance to be
created by such Bank as part of the applicable Bid Banker’s Acceptance
Financing and the

 

40

 

discount rate applicable
to each such Bid Banker’s Acceptance to be created by such Bank.  Each Bank whose offer has been accepted but
which wishes to revoke that offer must do so by informing the Administrative
Agent by telephone no later than 9:45 a.m. (Minneapolis, Minnesota
time).  The Administrative Agent shall
then notify the Company by telephone of any bids which have been revoked prior
to 10:00 a.m. (Minneapolis, Minnesota time) and shall subsequently notify
by telephone those Banks whose bids were accepted and have not been revoked
(collectively, the “Second Round Bids”) of the sum of the Second Round Bids
prior to 10:15 a.m. (Minneapolis, Minnesota time).  If any Bank whose bid was accepted as part of
a Partially Accepted Bid revokes its offer before 9:45 (Minneapolis, Minnesota
time), as described in the second preceding sentence, then each Bank whose bid
has not previously been revoked may revoke its Second Round Bid by notifying
the Administrative Agent by telephone prior to 10:30 a.m. (Minneapolis,
Minnesota time).  If any Second Round Bid
is revoked by any Bank, or if the Company fails to notify the Administrative
Co-Agent by 9:15 a.m. (Minneapolis, Minnesota time) that a Partially
Accepted Bid occurred, all Bid Banker’s Acceptance Tenders submitted in
response to the related Bid Banker’s Acceptance Tender Request Notice shall be
deemed withdrawn.  If any Second Round
Bid is revoked, the Administrative Agent shall notify the Company by telephone
prior to 10:45 a.m. (Minneapolis, Minnesota time) and shall notify those
Banks whose offers have not previously been revoked by telephone prior to 11:00 a.m.
(Minneapolis, Minnesota time).

 

(2)  If
offers to create Bid Banker’s Acceptances are made by two or more of the Banks
at the same discount rate for the same maturity date for a greater aggregate
face amount of Bid Banker’s Acceptances than the amount in respect of which
offers to create Bid Banker’s Acceptances are accepted at that discount rate
for that maturity date, the face amount of Bid Banker’s Acceptances in respect
of which such offers are accepted at such discount rate for such maturity date
shall be allocated by the Company, in its sole discretion, between or among
such Banks, provided  that each resulting Bid Banker’s Acceptance
must be in a face amount of  $1,000,000
or an integral multiple of $100,000 in excess thereof.

 

(3)  Notification
of Acceptances to Banks.  Prior to
9:30 a.m. (Minneapolis, Minnesota time) on the proposed Bid Banker’s
Acceptance Creation Date, the Administrative Agent shall notify by telephone
each Bank that has made a Bid Banker’s Acceptance Tender whether a Partially
Accepted Bid has occurred and whether that Bank’s offer or offers have been
accepted, and whether in whole or in part, specifying the date, face amount and
maturity date of each Bid Banker’s Acceptance to be created by such Bank as
part of the applicable Bid Banker’s Acceptance Financing and the discount rate
applicable to each such Bid Banker’s Acceptance to be created by such
Bank.  Promptly thereafter the
Administrative Agent shall transmit by telecopier to each such Bank a copy of
the Bid Banker’s Acceptance Certificate furnished by the Company pursuant to
subsection 2.19(b)(4) hereof.  Any
Bank not receiving such notification by the time indicated in the second
preceding sentence may conclusively presume that its offer or offers were not
accepted.

 

(g)  Preparation
of Drafts and Creation and Discount of the Bid Banker’s Acceptance.  The Company shall supply each Bank, upon
execution of this Agreement and thereafter forthwith upon request by any such
Bank, with a sufficient number of signed blank drafts, in the form of Exhibit A
hereto or such other form as such Bank may customarily use in the creation of
bankers’ acceptances and as may be acceptable to the Company, as any such Bank
may 

 

41

 

reasonably request.  Each Bank shall hold such drafts supplied to
it in safekeeping to be filled in and completed by such Bank as Bid Banker’s
Acceptances from information provided by the Administrative Agent in accordance
with subsection 2.19(f)(3) hereof. 
In case any authorized signatory of the Company whose signature shall
appear on any draft shall cease to have such authority before the creation of a
Bid Banker’s Acceptance with respect to such draft, such signature shall
nevertheless be valid and sufficient for all purposes as if such authority had
remained in force at the time of such creation. 
The Company hereby authorizes each Bank that is to create and discount a
Bid Banker’s Acceptance as part of a Bid Banker’s Acceptance Financing to, and
each such Bank will, before 12:00 noon (Minneapolis, Minnesota time) on the
proposed Bid Banker’s Acceptance Creation Date specified in the notice received
from the Administrative Agent pursuant to subsection 2.19(f)(3) hereof, (i) complete
a presigned draft supplied to such Bank pursuant to this subsection 2.19(g) in
accordance with the information contained in the said notice received from the
Administrative Agent pursuant to subsection 2.19(f)(3) hereof which draft
shall be dated the applicable Bid Banker’s Acceptance Creation Date and mature
on the date specified in the applicable Bid Banker’s Acceptance Tender Request
Notice, (ii) subject to the satisfaction of the applicable conditions set
forth in subsections 4.5 through 4.9 hereof, duly accept and discount such
draft at a price equal to the face amount thereof less the discount rate with
respect thereto specified in the applicable notice from the Administrative Agent
provided in accordance with subsection 2.19(f)(iii) hereof for the period
from the date thereof to the date of its maturity, (iii) give the
Administrative Agent telephonic notice of the creation of such Bid Banker’s
Acceptance or Acceptances specifying the date, face amount, maturity and
discount thereof and of the amount paid to the Administrative Agent pursuant to
clause (iv) below, and (iv) pay to the Administrative Agent the net
proceeds of its discount of such Bid Banker’s Acceptance by 2:00 p.m.
(Minneapolis, Minnesota time) on the applicable Bid Banker’s Acceptance
Creation Date.  Promptly after receipt by
the Administrative Agent of such funds and in any event not later than 3:00 p.m.
(Minneapolis, Minnesota time) on such date the Administrative Agent will make
any such proceeds received by the Administrative Agent available to the
Company.  Notwithstanding the foregoing,
no Bank shall be obligated to create or discount Bid Banker’s Acceptances
hereunder if such Bid Banker’s Acceptances would not be eligible for discount
at a Federal Reserve Bank under applicable rules or regulations, would not
meet the requirements of paragraph 7 of Section 13 of the Federal Reserve
Act, as amended, or if any liability of such Bank that would arise from the
creation of such Bid Banker’s Acceptance would constitute a deposit for which
such Bank would be required to maintain reserves under Regulation D of the
Board as from time to time in effect. 
The Companies acknowledge that a Bank’s decision to accept and discount
any draft offered for acceptance and discount under Section 2.19 hereof
will be made in reliance upon the truth of the representations made by the
Companies in the related Bid Banker’s Acceptance Certificate establishing the
eligibility for discount of any such Bid Banker’s Acceptance.  The Companies will indemnify and save each
Bank harmless from any loss or liability incurred by such Bank if any Bid
Banker’s Acceptances created and discounted by such Bank are determined to be
ineligible for discount or subject to reserves by reason of any
misrepresentation made by the Company.

 

(h)  Repayment
Obligation of the Companies; Prepayments. 
The Companies hereby unconditionally agree to pay to each Bank that has
created and discounted a Bid Banker’s Acceptance the face amount of each draft
as to which a Bid Banker’s Acceptance was created and discounted by such Bank
not later than 12:00 noon (Minneapolis, Minnesota time) on the maturity date
thereof or such earlier date as may be required pursuant to any other provision
of

 

42

 

this Agreement.  In the absence of instructions from such Bank
to the contrary, such payments shall be made by wire transfer of immediately
available funds in accordance with the payment instructions set forth in Exhibit R
hereto as such instructions may from time to time be changed by written notice
from a Bank to the Administrative Agent and the Company.  Bid Banker’s Acceptances may not be prepaid.

 

(i)  Notice of
Payment Default.  Each Bank that has
created and discounted a Bid Banker’s Acceptance pursuant to this subsection
2.19 shall notify the Administrative Agent and the Company as soon as
practicable, and in no event later than 9:00 a.m. (Minneapolis, Minnesota
time) on the Business Day immediately following the date payment is due with
respect to such Bid Banker’s Acceptance pursuant to clause (h) of this
subsection 2.19, of any failure by the Companies to remit the amounts payable
pursuant to clause (h) of this subsection 2.19, and provided, however,
that failure by any Bank to give notice as required by this sentence shall not
release the Companies from, nor have any other effect on, such obligation to
remit.

 

(j)  Effect on
Commitments.  Although each Bid
Banker’s Acceptance shall reduce the amount available to the Company in the
form of other Extensions of Credit by the face amount of such Bid Banker’s
Acceptance during the period in which said Bid Banker’s Acceptance is
outstanding, each Bank’s obligation to make its Pro Rata Share portion of any
subsequently requested Revolving Loans under Section 2.02 hereof, or to
purchase its Pro Rata Share participation in existing or subsequently created
Acceptances under subsection 2.18 hereof, shall not in any way be affected by
that Bank’s creation of Bid Banker’s Acceptances.

 

(k)  No Pro Rata
Sharing.  NO BANK SHALL BE OBLIGATED
OR ENTITLED TO PARTICIPATE IN ANY WAY IN ANY BID BANKER’S ACCEPTANCE CREATED
AND DISCOUNTED BY ANY OTHER BANK.

 

(l)  Obligations
Absolute.  The obligation of the
Companies to reimburse each Bank for the face amount of drafts as to which a
Bid Banker’s Acceptance was created by that Bank shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:

 

(1) 
any lack of validity or enforceability of any Bid Banker’s Acceptance, draft or
related documents;

 

(2) 
the existence of any claim, setoff, defense or other right which any Company
may have at any time against a holder or any transferee of any Bid Banker’s
Acceptance (or any persons or entities for whom any such transferee may be
acting), that Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between the Company or one of its
Subsidiaries and the holder of the Bid Banker’s Acceptance or a buyer or seller
of goods from or to the Companies);

 

(3) 
any draft, demand, certificate or any other document presented with respect to
any Bid Banker’s Acceptance proving to be forged, 

 

43

 

fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;

 

(4) 
payment by that Bank under any Bid Banker’s Acceptance against presentation of
a demand, draft or certificate or other document which does not comply with the
terms of such Bid Banker’s Acceptance; provided that such payment does
not constitute gross negligence or willful misconduct of that Bank;

 

(5) 
any adverse change in the condition (financial or otherwise) of the Companies;

 

(6) 
any breach of this Agreement by the Companies or any Bank;

 

(7) 
any termination or reduction of the Commitments;

 

(8) 
any other circumstance or happening whatsoever, which is similar to any of the
foregoing; or

 

(9) 
the fact that a Default or Event of Default shall have occurred and be
continuing.

 

(m)  Additional
Payments.  If by reason of (a) any
change in, or adoption of, any applicable law, regulation, rule, decree or
regulatory requirement or any change in the interpretation or application by
any judicial or regulatory authority of any law, regulation, rule, decree or
regulatory requirement or (b) compliance by the Bank creating a Bid Banker’s
Acceptance with any direction, request or requirement (whether or not having
the force of law) of any Governmental Authority or monetary authority
including, without limitation, Regulation D of the Board:

 

(1) 
that Bank shall be subject to any tax, levy, charge or withholding of any
nature or to any variation thereof or to any penalty with respect to the
maintenance or fulfillment of its obligations under this subsection 2.19;

 

(2) 
any reserve, deposit, or (with respect to the face amount of drafts as to which
an unmatured Bid Banker’s Acceptance was created only) capital adequacy or
similar requirement is or shall be applicable, imposed or modified in respect
of any Bid Banker’s Acceptance created by that Bank; or

 

(3) 
there shall be imposed on that Bank any other condition regarding this
subsection 2.19, or any Bid Banker’s Acceptance;

 

and the result of the foregoing is directly or
indirectly to increase the cost to that Bank of issuing, making or maintaining
any Bid Banker’s Acceptance, or to reduce the amount receivable in respect
thereof by that Bank, or in the case of capital adequacy requirements, the
result is to increase the amount of capital required to be maintained by that
Bank with respect to the face 

 

44

 

amount
of drafts as to which an unmatured Bid Banker’s Acceptance was created above
the amount of capital which would otherwise be required to be maintained by
that Bank with respect thereto (taking into account such Bank’s internal
policies and practices with respect to capital maintenance as of the date
hereof), then and in any such case such Bank may, at any time within a
reasonable period after the additional cost is incurred or additional capital
is required or the amount received is reduced, notify the Company, and the
Companies shall pay on demand such amounts as such Bank may specify to be
necessary to compensate such Bank for such additional cost or additional
capital or reduced receipt, together with interest on such amount from the date
demanded until payment in full thereof at a rate equal at all times to the
Floating Rate plus the Applicable Margin per annum.  The determination by any Bank of any amount
due pursuant to this subsection 2.19(m) as set forth in a certificate
setting forth the calculation thereof in reasonable detail, shall, in the
absence of manifest error, be final and conclusive and binding on all of the
parties hereto.  Each Bank, upon determining
in good faith that any additional amounts will be payable pursuant to this
subsection, will give prompt written notice thereof to the Company, which
notice shall show the basis for calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish any
of the Companies’ obligations to pay additional amounts pursuant to this
subsection.

 

(n)  Indemnification;
Nature of the Accepting Bank’s Duties. 
In addition to amounts payable as elsewhere provided in this subsection
2.19, the Companies hereby agree to protect, indemnify, pay and save each Bank
that creates a Bid Banker’s Acceptance harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys’ fees and allocated costs of internal counsel)
which that Bank may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of the Bid Banker’s Acceptance, other than
as a result of the gross negligence or willful misconduct of that Bank as
determined by a court of competent jurisdiction or (ii) the failure of
that Bank to honor a draft under a Bid Banker’s Acceptance as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or Governmental Authority.  As between the Company and each Bank, the
Company assumes all risks of the acts and omissions of, or misuse of the Bid
Banker’s Acceptances issued by that Bank by, the respective holders of such Bid
Banker’s Acceptances.  In furtherance and
not in limitation of the foregoing, no Bank shall be responsible:  (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of such Bid Banker’s
Acceptance, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Bid Banker’s Acceptance or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) for failure of
the beneficiary of any such Bid Banker’s Acceptance to comply fully with
conditions required in order to draw upon such Bid Banker’s Acceptance; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (v) for errors in interpretation of technical terms; (vi) for
any loss or delay in the transmission or other handling of any document related
to any such Bid Banker’s Acceptance or of the proceeds thereof; and (vii) for
any consequences arising from causes beyond the control of that Bank.  In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any action taken
or omitted by any Bank under or in 

 

45

 

connection with the Bid
Banker’s Acceptances issued by it or the related certificates, if taken or
omitted in good faith, shall not put that Bank under any resulting liability to
any Company.

 

(o)  Information
to Successful Bidders.  Upon request
by any Bank that has created a Bid Banker’s Acceptance, the Company shall
deliver a Bid Banker’s Acceptance Certificate and a listing of the transactions
being financed by that Bid Banker’s Acceptance, which shall state that no other
financing is outstanding with respect to such transactions.

 

2.20  The Bid Loan Facility.

 

(a)  Establishment
of Bid Loan Facility.  The Banks
agree to make available to the Company a Bid Loan Facility, pursuant to which
the Company may, as provided in this subsection 2.20, request the Banks,
through the Administrative Agent, to make offers to make Bid Loans to the
Company in an aggregate face amount not exceeding the Total Commitments; provided,
however, that a Bank shall not make a Bid Loan if, after giving effect
thereto and any payment of Outstandings made directly by the Administrative
Agent, for the account of the Companies, from the proceeds of such Bid Loan,
the Total Outstandings would exceed the Total Commitments.

 

(b)  Bid Loan
Tender Request Notice.  When the
Company wishes to request offers to make Bid Loans, it shall transmit to the
Administrative Agent a Bid Loan Tender Request Notice so as to be received no
later than 10:00 a.m. (Minneapolis, Minnesota time) on the second Business
Day prior to the Bid Loan Borrowing Date proposed in such Notice, specifying:

 

(1) 
the proposed Bid Loan Borrowing Date, which shall be any Business Day seven
days or more prior to the Termination Date;

 

(2) 
the aggregate principal amount of the proposed Bid Loan Financing which shall
be a minimum amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof;

 

(3) 
the maturity dates (which shall not exceed four) of such Bid Loans to be made
as part of such Bid Loan Financing (each of which maturity dates shall be a
Business Day and may not be earlier than the date occurring seven days after
the proposed Bid Loan Borrowing Date or later than the date occurring the
earlier of the Termination Date or 180 days after the proposed Bid Loan
Borrowing Date); and

 

(4) 
any other terms to be applicable to such Bid Loan Financing.

 

Each Bid Loan Tender
Request Notice shall be given or signed on behalf of the Company by an officer
or employee of the Company previously identified to the Administrative Agent in
a writing satisfactory to the Administrative Agent as authorized to give Bid
Loan Tender Request Notices.

 

(c)  Invitation
to Tender for Bid Loans.  Promptly
upon receipt of each Bid Loan Tender Request Notice and in any event not later
than 3:00 p.m. (Minneapolis, Minnesota time) on the second Business Day
prior to the Bid Loan Borrowing Date specified therein, provided the 

 

46

 

aggregate principal
amount of the proposed Bid Loan Financing does not exceed the limitations set
forth in subsection 2.20(a), the Administrative Agent shall send to the Banks
by telex or telecopier an Invitation to Tender for Bid Loans which shall
constitute an invitation by the Company to each such Bank to submit Bid Loan
Tenders offering to make Bid Loans to which such Bid Loan Tender Request Notice
relates in accordance with subsection 2.20(d) hereof.  Each Bid Loan Tender Request Notice shall be
irrevocable.

 

(d)  Submission
and Contents of Bid Loan Tenders.

 

(1) 
Each Bank may submit one or more bids (each, a “Bid Loan Tender”)
containing an offer or offers to make Bid Loans in response to any Invitation
to Tender for Bid Loans.  Each Bid Loan
Tender must comply with the requirements of this subsection 2.20(d) and
must be submitted to the Administrative Agent by telephone so as to be received
not later than 8:45 a.m. (Minneapolis, Minnesota time) on the proposed Bid
Loan Borrowing Date; provided, that if the Administrative Agent in its
capacity as a Bank shall, in its sole discretion, elect to submit a Bid Loan
Tender, it shall submit the same to the Company by telephone not later than
8:30 a.m. (Minneapolis, Minnesota time) on the proposed Bid Loan Borrowing
Date.  No Bank shall discuss the proposed
or actual terms of any Bid Loan Tender with any other Bank before 9:00 a.m.
on the proposed Bid Loan Borrowing Date. 
Subject to satisfaction of the applicable conditions set forth in
subsections 4.5 through 4.9 hereof, any Bid Loan Tender shall be irrevocable
prior to 9:30 a.m. (Minneapolis, Minnesota time) on the proposed Bid Loan
Borrowing Date except (x) with the written consent of the Administrative
Agent given on the written instructions of the Company, and (y) except to
the extent specifically set forth below in the event of a Partially Accepted
Bid.

 

(2) 
Each Bid Loan Tender shall specify:

 

(A) 
the applicable Bid Loan Borrowing Date;

 

(B) 
the principal amount of Bid Loans for which each offer is being made for each
maturity date, which face amount shall be $2,000,000 or an integral multiple of
$1,000,000 in excess thereof and may not exceed, in the aggregate as to all
such Bid Loans, the principal amount of Bid Loans for which offers were
requested (although such Bid Loan Tender may include any number of separate
offers to make Bid Loans for the same or different maturity dates at different
interest rates, each of which offers shall be capable of acceptance hereunder
by the Company);

 

(C) 
the per annum (based on actual days elapsed and a year of 360 days) fixed
interest rate (which shall include any facility or other fee) offered on each
such principal amount of Bid Loans (expressed to three decimal places); and

 

47

 

(D) 
the identity of the tendering Bank.

 

(3) 
any Bid Loan Tender shall be disregarded that:

 

(A) 
does not specify all the information required by subsection 2.20(d)(2) hereof;

 

(B) 
contains qualifying, conditional or similar language;

 

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

 

(D) 
is received by the Administrative Agent after the time set forth in subsection
2.20(d)(1) hereof.

 

If any
Bank shall elect not to submit a Bid Loan Tender, such Bank shall notify the
Administrative Agent to such effect before 9:00 a.m. (Minneapolis, Minnesota
time) on the Business Day prior to the Bid Loan Borrowing Date specified in the
applicable Bid Loan Tender Request Notice and such Bank shall not be obligated
to, and shall not, make any Bid Loan (or any part thereof) specified in said
Notice; provided, that the failure of any Bank to give such notice shall
not cause such Bank to be obligated to make any such Bid Loan as part of such
proposed Bid Loan Financing.

 

(e)  Notice to
the Company.  As soon as reasonably
practicable, and in no event later than 9:00 a.m. (Minneapolis, Minnesota
time) on the proposed Bid Loan Borrowing Date, the Administrative Agent shall
notify the Company by telephone of the terms of each Bid Loan Tender submitted
by a Bank that complies with subsection 2.20(d) hereof.

 

(f)  Acceptance
and Rejection of Bid Loan Tenders.

 

(1) 
Acceptance and Notice by the Company. 
As soon as reasonably practicable and in no event later than 9:15 a.m.
(Minneapolis, Minnesota time) on the proposed Bid Loan Borrowing Date, the
Company shall notify the Administrative Agent by telephone of its acceptance or
rejection of the offers contained in the Bid Loan Tenders of which it was
notified pursuant to subsection 2.20(e) hereof.  Such notification from the Company shall
specify the aggregate principal amount of offers at each interest rate for each
maturity date that are accepted.  The
Company may accept any of the Bid Loan Tenders in whole or in part; provided,
that:

 

(A) 
the aggregate principal amount of the Bid Loans in respect of which offers are
accepted may not exceed the aggregate principal amount requested in the related
Bid Loan Tender Request Notice; and

 

48

 

(B) 
acceptances of Bid Loan Tenders made in response to the same Invitation to Tender
for Bid Loans may only be made on the basis of ascending interest rates, provided
that each resulting Bid Loan must be in a principal amount of  $1,000,000 or an integral multiple of
$100,000 in excess thereof.

 

If the
Company rejects all Bid Loan Tenders, the proposed Bid Loan Financing shall be
canceled and the Administrative Agent shall give the Banks prompt notice to
that effect.

 

If (x) the
aggregate principal amount of the Bid Loans offered by the Banks in their Bid
Loan Tenders aggregate less than, or (y) the Company does not accept
offers contained in Bid Loan Tenders in an aggregate face amount equal to, the
aggregate face amount requested in the related Bid Loan Tender Request Notice
(either such event, a “Partially Accepted Bid”), the Banks whose offers
are accepted shall have the right (but not the obligation) to revoke those
offers as hereinafter set forth.  In the
event that a Partially Accepted Bid has occurred, the Company shall notify the
Administrative Agent by telephone prior to 9:15 a.m. (Minneapolis,
Minnesota time) on the proposed Bid Loan Borrowing Date of the occurrence and
of which Bid Loan Tenders the Company accepts. 
By 9:30 a.m. (Minneapolis, Minnesota time), the Administrative
Agent shall notify by telephone those Banks whose offers have been accepted
that a Partially Accepted Bid has occurred, and shall inform those Banks of the
sum of the accepted Bid Loan Tenders and whether that Bank’s offer or offers
have been accepted, and whether in whole or in part, specifying the date, principal
amount and maturity date of each Bid Loan to be made by such Bank as part of
the applicable Bid Loan Financing and the interest rate applicable to each such
Bid Loan to be created by such Bank. 
Each Bank whose offer has been accepted but which wishes to revoke that
offer must do so by informing the Administrative Agent by telephone no later
than 9:45 a.m. (Minneapolis, Minnesota time).  The Administrative Agent shall then notify
the Company by telephone of any bids which have been revoked prior to 10:00 a.m.
(Minneapolis, Minnesota time) and shall subsequently notify by telephone those
Banks whose bids were accepted and have not been revoked (collectively, the “Second
Round Bids”) of the sum of the Second Round Bids prior to 10:15 a.m.
(Minneapolis, Minnesota time).  If any
Bank whose bid was accepted as part of a Partially Accepted Bid revokes its
offer before 9:45 (Minneapolis, Minnesota time), as described in the second
preceding sentence, then each Bank whose bid has not previously been revoked may
revoke its Second Round Bid by notifying the Administrative Agent by telephone
prior to 10:30 a.m. (Minneapolis, Minnesota time).  If any Second Round Bid is revoked by any
Bank, or if the Company fails to notify the Administrative Agent by 9:15 a.m.
(Minneapolis, Minnesota time) that a Partially Accepted Bid occurred, all Bid
Loan Tenders submitted in response to the related Bid Loan Tender 

 

49

 

Request Notice shall be
deemed withdrawn.  If any Second Round
Bid is revoked, the Administrative Agent shall notify the Company by telephone
prior to 10:45 a.m. (Minneapolis, Minnesota time) and shall notify those
Banks whose offers have not previously been revoked by telephone prior to 11:00 a.m.
(Minneapolis, Minnesota time).

 

(2) 
If offers to make Bid Loans are made by two or more of the Banks at the same
interest rate for the same maturity date for a greater aggregate face amount of
Bid Loans than the amount in respect of which offers to make Bid Loans are accepted
at that interest rate for that maturity date, the principal amount of Bid Loans
in respect of which such offers are accepted at such interest rate for such
maturity date shall be allocated by the Company, in its sole discretion,
between or among such Banks, provided  that each resulting Bid
Loan must be in a face amount of  $1,000,000
or an integral multiple of $100,000 in excess thereof.

 

(3) 
Notification of Bid Loans to Banks. 
Prior to 9:30 a.m. (Minneapolis, Minnesota time) on the proposed
Bid Loan Borrowing Date, the Administrative Agent shall notify by telephone
each Bank that has made a Bid Loan Tender whether a Partially Accepted Bid has
occurred and whether that Bank’s offer or offers have been accepted, and
whether in whole or in part, specifying the date, principal amount and maturity
date of each Bid Loan to be made by such Bank as part of the applicable Bid
Loan Financing and the interest rate applicable to each such Bid Loan to be
made by such Bank.  Any Bank not
receiving such notification by the time indicated in the second preceding
sentence may conclusively presume that its offer or offers were not accepted.

 

(g)  Funding of
Bid Loans; Notes to Evidence Bid Loans. 
Upon receipt of the telephonic notification contemplated by subsection 2.20(f)(3) by
a Bank whose offer or offers to make a Bid Loan or Bid Loans have been
accepted, such Bank shall make the aggregate principal amount of such Bid Loan
or Bid Loans available to the Administrative Agent for the account of the
Companies at the office of the Administrative Agent set forth in Section 9.2
hereof prior to 2:00 p.m., Minneapolis, Minnesota time on the applicable
Bid Loan Borrowing Date in funds immediately available to the Administrative
Agent as the Administrative Agent may direct. 
The amounts so made available to the Administrative Agent shall be made
available on such date to the Companies by the Administrative Agent by
crediting the account of the Company on the books of such office of the
Administrative Agent with the aggregate of such amounts in like funds as
received by the Administrative Agent or in such manner as the Company may
request in writing.  Bid Loans made by a
Bank shall be evidenced by a master promissory note of the Companies in form of
Exhibit G-3-1 hereto (individually, a “Bid Loan Note,” and collectively as
to all the Banks, the “Bid Loan Notes”) payable to the order of such Bank.  Promptly after giving the telephonic
notifications to the Banks contemplated by subsection 2.20(f)(3), the
Administrative Agent shall complete and transmit by telecopier to each Bank
whose offer or offers have been accepted one or more Bid Loan Schedules,
substantially in the form thereof as attached to Exhibit G-3-1, showing
for each such Bid Loan the name of such Bank, the amount of such Bid Loan, the
applicable Borrowing Date and maturity date therefor and the interest rate

 

50

 

applicable thereto.  Each such Bid Loan Schedule shall be attached
by such Bank to its applicable Bid Loan Note and shall constitute a part of
such Bid Loan Note.  Each Bank is hereby
authorized to record the date and amount of each payment and prepayment of a
Bid Loan in its books and records and/or on the applicable Bid Loan Schedule
attached to its Bid Loan Note; provided however, that any failure by a Bank to
make any such entry or error in making such entry shall not otherwise affect
the obligation of the Companies hereunder and on that Bank’s Bid Loan
Note.  Interest on each Bid Loan shall be
computed on the basis of actual days elapsed and a year of 360 days and shall
be payable on the last Business Day of each March, June, September and December following
the Borrowing Date for such Bid Loan and on the date of repayment in full
thereof.  Principal of each Bid Loan
shall be payable on the maturity date therefor as specified in the applicable
Bid Loan Schedule.

 

(h)  Repayment
Obligation of the Companies; Prepayments. 
The Companies hereby unconditionally agree to pay to each Bank that has
made a Bid Loan the principal amount of such Bid Loan (in the currency in which
borrowed) not later than 12:00 noon (Minneapolis, Minnesota time) on the
maturity date thereof or such earlier date as may be required pursuant to any
other provision of this Agreement.  In
the absence of instructions from such Bank to the contrary, such payments shall
be made by wire transfer of immediately available funds in accordance with the
payment instructions set forth in Exhibit R hereto as such instructions
may from time to time be changed by written notice from a Bank to the
Administrative Agent and the Company. 
Subject to subsection 2.20(n) hereof, the Companies may, at their
option, prepay any Bid Loan in whole or in part upon at least three Business
Days’ irrevocable notice to the Administrative Agent.  Upon receipt of such notice, the
Administrative Agent shall promptly notify the Bank which made such Bid
Loan.  If such notice is given, the
Companies shall make such prepayment, and the prepayment amount specified in
such notice shall be due and payable on the date specified therein, together
with accrued interest to such date on the amount prepaid and any amounts due
under subsection 2.20(n) hereof.

 

(i)  Notice of
Payment Default.  Each Bank that has
made a Bid Loan pursuant to this subsection 2.20 shall notify the
Administrative Agent and the Company as soon as practicable, and in no event
later than 9:00 a.m. (Minneapolis, Minnesota time) on the Business Day
immediately following the date payment is due with respect to such Bid Loan
pursuant to paragraph (h) of this subsection 2.20, of any failure by the
Companies to remit the amounts payable pursuant to subparagraph (h) of this
subsection 2.20, and provided, however, that failure by any Bank
to give notice as required by this sentence shall not release the Companies
from, nor have any other effect on, such obligation to remit.

 

(j)  Effect on
Commitments.  Although each Bid Loan
shall reduce the amount available to the Company in the form of other
Extensions of Credit by the principal amount of such Bid Loan during the period
in which said Bid Loan is outstanding, each Bank’s obligation to make its Pro
Rata Share portion of any subsequently requested Revolving Loans under
subsection 2.2 hereof, or to purchase its Pro Rata Share participation in
existing or subsequently created Acceptances under subsection 2.18 hereof,
shall not in any way be affected by that Bank’s making of Bid Loans.

 

(k)  No Pro Rata
Sharing.  NO BANK SHALL BE OBLIGATED
OR ENTITLED TO PARTICIPATE IN ANY WAY IN ANY BID LOAN MADE BY ANY OTHER BANK.

 

51

 

(l)  Additional
Payments.  If by reason of (a) any
change in, or adoption of, any applicable law, regulation, rule, decree or
regulatory requirement or any change in the interpretation or application by
any judicial or regulatory authority of any law, regulation, rule, decree or
regulatory requirement or (b) compliance by the Bank making a Bid Loan
with any direction, request or requirement (whether or not having the force of
law) of any Governmental Authority or monetary authority including, without
limitation, Regulation D of the Board:

 

(1) 
that Bank shall be subject to any tax, levy, charge or withholding of any
nature or to any variation thereof or to any penalty with respect to the
maintenance or fulfillment of its obligations under this subsection 2.20;

 

(2) 
any reserve, deposit, or capital adequacy or similar requirement is or shall be
applicable, imposed or modified in respect of any Bid Loan made by that Bank;
or

 

(3) 
there shall be imposed on that Bank any other condition regarding this
subsection 2.20, or any Bid Loan;

 

and the result of the foregoing is directly or
indirectly to increase the cost to that Bank of making or maintaining any Bid
Loan, or to reduce the amount receivable in respect thereof by that Bank, or in
the case of capital adequacy requirements, the result is to increase the amount
of capital required to be maintained by that Bank with respect to any Bid Loan
above the amount of capital which would otherwise be required to be maintained
by that Bank with respect thereto (taking into account such Bank’s internal
policies and practices with respect to capital maintenance as of the date
hereof), then and in any such case such Bank may, at any time within a
reasonable period after the additional cost is incurred or additional capital
is required or the amount received is reduced, notify the Company, and the
Companies shall pay on demand such amounts as such Bank may specify to be
necessary to compensate such Bank for such additional cost or additional
capital or reduced receipt, together with interest on such amount from the date
demanded until payment in full thereof at a rate equal at all times to the
Floating Rate plus the Applicable Margin per annum.  The determination by any Bank of any amount
due pursuant to this subsection 2.20(l) as set forth in a certificate
setting forth the calculation thereof in reasonable detail, shall, in the
absence of manifest error, be final and conclusive and binding on all of the
parties hereto.  Each Bank, upon
determining in good faith that any additional amounts will be payable pursuant
to this subsection, will give prompt written notice thereof to the Company,
which notice shall show the basis for calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish any
of the Companies’ obligations to pay additional amounts pursuant to this
subsection.

 

(m)  Indemnification;
Nature of the Bid Loan Bank’s Duties. 
In addition to amounts payable as elsewhere provided in this subsection
2.20, the Companies hereby agree to protect, indemnify, pay and save each Bank
that makes a Bid Loan harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys’ fees and allocated costs of internal counsel) which that Bank may
incur or be subject to as a consequence, direct or indirect, of the making of
the Bid Loan, other than as a result of the gross negligence or willful
misconduct of that Bank as determined by a court of competent 

 

52

 

jurisdiction.  In furtherance and not in limitation of the
foregoing, no Bank shall be responsible: 
(i) for the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for and making of any such Bid Loan, even if it should in fact
prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Bid Loan or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (iv) for errors in interpretation of technical terms; (v) for
any loss or delay in the transmission or other handling of any document related
to any such Bid Loan or of the proceeds thereof; and (vi) for any
consequences arising from causes beyond the control of that Bank.  In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, any action taken
or omitted by any Bank under or in connection with the Bid Loans made by it or
the related documents, if taken or omitted in good faith, shall not put that
Bank under any resulting liability to any Company.

 

(n)  The Companies
agree to indemnify each Bank and to hold each Bank harmless from any loss or
expense which such Bank may sustain or incur as a consequence of a default by
any of the Companies in borrowing a Bid Loan after the Company has given notice
of its acceptance of a Bid Loan Tender as provided in the last paragraph of
subsection 2.20(f)(1) or in prepaying a Bid Loan after having given notice
of such prepayment in accordance with the last sentence of subsection 2.20(h),
or in the event of any prepayment of a Bid Loan on a day which is not a
maturity date therefor, including, but not limited to, any such loss or expense
arising from interest or fees payable by such Bank to lenders of funds obtained
by it in order to maintain its Bid Loans hereunder and any loss or expense
incurred in liquidating or redeploying deposits from which such funds were
obtained.  This covenant shall survive
termination of this Agreement and payment of the outstanding Notes.

 

2.21.  Payments; Remission of Funds.  Each payment (including any prepayment) to be
made hereunder by the Companies to the Administrative Agent, for its own
account or for the account of any Bank, shall be made, in the absence of
instructions from the Administrative Agent to the contrary, to the
Administrative Agent by wire transfer of immediately available funds to U.S.
Bank National Association, Minneapolis, Minnesota, Attn:  Commercial Loan Operations, Ref:  Quad/Graphics not later than 12:00 noon
(Minneapolis, Minnesota time) on the due date of such payment; provided,
that any such payment shall be deemed to have been received by the
Administrative Agent by 12:00 noon (Minneapolis, Minnesota time) on such due
date if (x) the Company shall have instructed the Administrative Agent to
apply the proceeds of new Extensions of Credit scheduled to be made on such due
date to such payment or payments and (y) such proceeds, together with
other funds the Company has directed the Agent to apply, are sufficient, or
would be sufficient but for the failure of a Bank to fund such new Extensions
of Credit on such date, to make such payment or payments in full.  Funds not received or not deemed to have been
received by such hour shall be deemed to have been received by the
Administrative Agent on the next Business Day. 
The Company hereby irrevocably authorizes the Administrative Agent to
charge the Company’s account maintained with the Administrative Agent on the
due date of any such payment in an amount equal to such payment, and the
Administrative Agent will promptly give the Company advice of such charges by
telephone, 

 

53

 

confirmed as soon as
practicable in writing.  On the same
Business Day on which the Administrative Agent has received or is deemed to
have received any such payment (in the case of a payment not received or not
deemed to have been received by 12:00 noon (Minneapolis, Minnesota time)), the
Administrative Agent shall remit to each Bank entitled to receive such payment
such Bank’s ratable share thereof in accordance with the payment instructions
set forth in Exhibit R hereto, as such instructions may from time to time
be changed by written notice from a Bank to the Administrative Agent.  Each remission of funds to be made by the
Administrative Agent or any Bank hereunder to the Company shall be made, in the
absence of instructions from the Company to the contrary, to the Company in
immediately available funds, in the case of the Administrative Agent, by
depositing such funds in Account Number 1-602-3345-4059 maintained by the
Company with the Administrative Agent and, in the case of each Bank, by wire
transfer to U.S. Bank National Association, Minneapolis, Minnesota, Attn:  Commercial Loan Operations, Ref:  Quad/Graphics (for further credit to
Quad/Graphics, Inc.’s Account Number 1-602-3345-4059).  Each payment to be made by the Companies to
any Bank hereunder shall be made, in the absence of instructions from such Bank
to the contrary, by wire transfer of immediately available funds in accordance
with the payment instructions set forth in Exhibit R hereto as such
instructions may from time to time be changed by written notice from a Bank to
the Administrative Agent and the Company.

 

2.22.        Taxes.

 

(i)            All payments by the Companies to or
for the account of any Bank or the Administrative Agent hereunder or under any
Note hereunder (whether in respect of principal, interest, fees or otherwise
and including pursuant to an Foreign Currency Addendum) shall be made free and
clear of and without deduction for any and all Taxes.  If the Companies, or any of them, shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Bank or the Administrative Agent, (a) 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 2.22)
such Bank or the Administrative Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (b) such
Company shall make such deductions, (c) such Company shall pay the full amount
deducted to the relevant authority in accordance with applicable law and (d) such
Company shall furnish to the Administrative Agent the original copy of a
receipt evidencing payment thereof within 30 days after such payment is made.

 

(ii)           In addition, each of the Companies
hereby agrees to pay any present or future stamp or documentary taxes and any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or from the execution or delivery of,
or otherwise with respect to, this Agreement or any Note or any other Loan
Document (“Other Taxes”).

 

(iii)          Each of the Companies hereby agrees to
indemnify the Administrative Agent and each Bank for the full amount of Taxes
or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed
on amounts payable under this Section 2.22) paid by the Administrative
Agent or such Bank as a result of its Revolving Loan Commitment, including its
Foreign Currency Loans or commitment to make the same, if any, any Loans made
by it hereunder, or otherwise in connection with its participation in this
Agreement and any liability (including 

 

54

 

penalties, interest and
expenses) arising therefrom or with respect thereto.  Payments due under this indemnification shall
be made within 30 days of the date the Administrative Agent or such Bank makes
demand therefor.  This indemnification
obligation shall survive any termination of this Agreement.

 

(iv)          Each Bank that is not incorporated
under the laws of the United States of America or a state thereof (each a “Non-U.S.
Lender”) agrees that it will, not more than ten Business Days after the date on
which it becomes party to this Agreement (but in any event before a payment is
due hereunder), (i) deliver to the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form W-8BEN or W-8ECI,
certifying in either case that such Lender is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes, and (ii) deliver to the Administrative Agent a
United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax.  Each Non-U.S. Lender
further undertakes to deliver to each of the Company and the Administrative
Agent (x) renewals or additional copies of such form (or any successor
form) on or before the date that such form expires or becomes obsolete and (y) after
the occurrence of any event requiring a change in the most recent forms so
delivered by it, such additional forms or amendments thereto as may be
reasonably requested by the Company or the Administrative Agent.  All forms or amendments described in the
preceding sentence shall certify that such Bank is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes, unless an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing and delivering any such
form or amendment with respect to it and such Bank advises the Company and the
Administrative Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.

 

(v)           For any period during which a
Non-U.S. Lender has failed to provide the Company with an appropriate form
pursuant to clause (iv), above (unless such failure is due to a change in
treaty, law or regulation, or any change in the interpretation or
administration thereof by any governmental authority, occurring subsequent to
the date on which a form originally was required to be provided), such Non-U.S.
Lender shall not be entitled to indemnification under this Section 2.22
with respect to Taxes imposed by the United States; provided, that, should a
Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of
withholding tax become subject to Taxes because of its failure to deliver a
form required under clause (iv), above, the Company shall take such steps as
such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to
recover such Taxes.

 

(vi)          Any Bank that is entitled to an
exemption from or reduction of withholding tax with respect to payments under
this Agreement or any Note pursuant to the law of any relevant jurisdiction or any
treaty 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 as will permit such
payments to be made without withholding or at a reduced rate.

 

55

 

(vii)         If the U.S. Internal Revenue Service or
any other governmental authority of the United States or any other country or
any political subdivision thereof asserts a claim that the Administrative Agent
did not properly withhold tax from amounts paid to or for the account of any
Bank (because the appropriate form was not delivered or properly completed,
because such Bank failed to notify the Administrative Agent of a change in
circumstances which rendered its exemption from withholding ineffective, or for
any other reason), such Bank shall indemnify the Administrative Agent fully for
all amounts paid, directly or indirectly, by the Administrative Agent as tax,
withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the
Administrative Agent under this subsection, together with all costs and
expenses related thereto (including attorneys fees and time charges of
attorneys for the Administrative Agent, which attorneys may be employees of the
Administrative Agent).  The obligations
of the Banks under this Section 2.22(vii) shall survive the payment
of the Obligations and termination of this Agreement.

 

SECTION 3.  REPRESENTATIONS AND WARRANTIES

 

In order to induce the
Banks to enter into this Agreement and to make the Extensions of Credit herein
provided for, and in recognition of the fact that the Banks are acting in
reliance thereupon, the Companies hereby covenant, represent and warrant to
each Bank that:

 

3.1.  Financial Condition.  The consolidated balance sheets of the
Company and its Restricted Subsidiaries as at December 31, 2002, December 31,
2003 and December 31, 2004, and the related consolidated statements of
operations, stockholders’ investment and cash flows for the fiscal years, or
the portion thereof, ended on such dates, certified, in the case of the December 31,
2002, December 31, 2003 and December 31, 2004 financial statements,
by the Company’s auditors, copies of which have heretofore been furnished to
each Bank, are complete and correct and present fairly the consolidated
financial condition of the Company and its Restricted Subsidiaries as at such
dates, and the consolidated results of their operations and changes in cash
position for the fiscal years, or the portion thereof, then ended.  All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by
such accountants and as disclosed therein). 
As of the respective dates thereof, neither the Company nor any of its
Restricted Subsidiaries has any material Indebtedness, Contingent Obligation,
contingent liability or liability for taxes, long-term leases or unusual
forward or long-term commitment, which is not reflected in any of the foregoing
statements or in the notes thereto.

 

3.2.  No Change.  Since December 31, 2004, there has been
no material adverse change in the business, operations, assets, Property,
prospects or financial condition of the Company and its Restricted Subsidiaries
taken as a whole (except to the extent that the litigation set forth in Exhibit K
hereto is considered a material adverse change), and there has been no fire,
explosion, labor dispute, storm, act of God, accident or other casualty which
has had a material adverse effect upon the business, operations, assets,
Property, prospects or financial condition of the Company and its Restricted
Subsidiaries taken as a whole.

 

3.3.  Corporate Existence; Compliance with Law.  Each of the Companies is duly organized,
validly existing and in good standing (or equivalent) under the laws of the
jurisdiction 

 

56

 

of its incorporation, and
has the corporate power and authority and the legal right to own and operate
its Property, to lease the Property it operates and to conduct the business in
which it is currently engaged.  The
Companies’ corporate names are as set forth herein.  Each of the Companies is duly qualified as a
foreign corporation and in good standing (or equivalent) under the laws of each
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such qualification, and is in compliance with all
Requirements of Law, except to the extent that the failure so to qualify or
comply does not, in the aggregate, have a material adverse effect upon the
business, operations, assets, Property, prospects or financial condition of the
Companies taken as a whole, or a material adverse effect upon the ability of
the Companies to perform their Obligations under all Loan Documents including,
but not limited to, this Agreement and the Notes.

 

3.4.  Corporate Power; Enforceable Obligations.  The Companies each have the corporate power
and the authority to enter into, deliver, issue and perform all of their
obligations under all Loan Documents including, but not limited to, this
Agreement and the Notes.  The Companies
have the corporate power and the authority to borrow under this Agreement.  The Loan Documents, including, but not
limited to, this Agreement and the Notes, when duly executed and delivered on
behalf of the Companies, will constitute legal, valid and binding obligations
of the Companies enforceable against the Companies in accordance with their
terms.

 

3.5.  No Legal Bar.  No consent or authorization of, filing with,
or other act by or in respect of any Governmental Authority, is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents, including, but
not limited to, this Agreement and the Notes. 
The execution, delivery and performance of the Loan Documents,
including, but not limited to, this Agreement and the Notes, prospective
borrowings hereunder and the use of the proceeds thereof, (i) have been
duly authorized by all necessary corporate action, (ii) will not require
any consent or approval of the Companies’ stockholders, (iii) will not
violate any Requirement of Law or any Contractual Obligation of the Companies
and (iv) will not result in, or require the creation or imposition of, any
Lien on any of the Companies’ respective Properties or revenues pursuant to any
Requirement of Law or Contractual Obligation.

 

3.6.  No Material Litigation.  Except as set forth in Exhibit K hereto,
no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Companies,
threatened by or against any of the Companies or against any of their
respective Properties or revenues (a) with respect to the Loan Documents,
including, but not limited to, this Agreement or the Notes, or any of the
transactions contemplated hereby or thereby, or (b) which, if adversely
determined, could have a material adverse effect upon the business, operations,
assets, Property, prospects or financial condition of the Companies taken as a
whole.

 

3.7.  No Default.  Neither the Company nor any of its Restricted
Subsidiaries is in default under the Existing Loan Agreement nor has there been
an event of default relating thereto.  In
addition, no “event of default” exists under any Contractual Obligation of any
of the Companies in any respect which could be materially adverse to the
business, operations, assets, Property, prospects or financial condition of the
Companies taken as a whole, or which could have a material adverse effect upon
the ability of the Companies to perform their obligations under the 

 

57

 

Loan Documents,
including, but not limited to, this Agreement or the Notes.  No Default or Event of Default has occurred
and is continuing.

 

3.8.  Liens. 
None of the Restricted Property of the Companies is subject to any Lien,
except as permitted in subsection 6.1.

 

3.9.  No Burdensome Restrictions.  No Contractual Obligation of any of the
Companies and no Requirement of Law has a material adverse effect upon, or
insofar as the Companies may reasonably foresee may have such an effect upon,
the business, operations, assets, Property, prospects or financial condition of
the Companies taken as a whole.

 

3.10.  Taxes. 
The Companies have filed all tax returns required to be filed and paid
all taxes shown thereon to be due, including interest and penalties, or
provided adequate reserves for payment thereof. 
The Companies have each paid, or provided adequate reserves for, all
taxes, including interest and penalties, shown to be due on any assessments
made against it or any of its Property and all other taxes, fees and other
charges imposed on it or its Property by any Governmental Authority.  Except as expressly disclosed in the
financial statements referred to in subsection 3.1, the Companies have no
outstanding unpaid tax liabilities (except for taxes which are currently
accruing from their current operations and ownership of Property, which are not
delinquent) and no tax deficiencies have been proposed or assessed against
them, except for liabilities and deficiencies the amount or validity of which
is currently being contested in good faith by appropriate proceedings with
adequate reserves being maintained therefor.

 

3.11.  Board Regulations.  Neither the Company nor any of its Subsidiaries
is engaged, principally or as one of its important activities, in the business
of extending credit for the purpose of “purchasing” or “carrying” any “margin
stock” within the respective meanings of each of the quoted terms under
Regulation U of the Board as now and from time to time hereafter in effect.

 

3.12.  ERISA. 
Neither the Company nor any Commonly Controlled Entity has been, since July 1,
1974, an “Employer,” as defined in Section 3(5) of ERISA, in respect
of any defined benefit plan, except to the extent specified on Exhibit S
attached hereto.

 

3.13.  Investment Company Act.  The Company and its Subsidiaries are not “investment
companies” or companies “controlled” by an “investment company,” within the
meaning of the Investment Company Act of 1940, as amended.

 

3.14.  Subsidiaries and Affiliates.  The Company has no Subsidiaries except those
set forth on Exhibit L, as the same may be supplemented by the Company
from time to time, and any Unrestricted Subsidiary having an Adjusted Net Worth
of less than $50,000 as of its organization (for the purposes of this
subsection, a “Low Net Worth Subsidiary”).  All of the outstanding stock, membership
interests or partnership interests, as the case may be, of each Restricted
Subsidiary has been validly issued, is fully paid and nonassessable (except as
provided by Wis. Stat. Sec. 180.0622), and is wholly owned by the Company
and/or a Restricted Subsidiary free and clear of any Liens.  The Company does not own shares of the voting
stock, membership interests or partnership interests, as the case may be, of
any Person other than those set forth on Exhibit L, as the same may be
supplemented by the Company from time to time, and any Low Net Worth
Subsidiary.

 

58

 

3.15.  No Misstatements.  No information, exhibit or report furnished
by the Companies to the Banks in connection with the negotiation of, or
pursuant to, this Agreement contains any material misstatement of fact or omits
to state a material fact or any fact necessary to make the statements contained
therein not misleading.

 

3.16.  Ownership of Property.  Each of the Companies has good and marketable
title to its real properties and good and sufficient title to its other
properties, including all properties and assets referred to as owned by the
Companies in the most recent financial statement referred to in Section 3.1,
without knowledge of any defect in title, which defect could reasonably be
expected to have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise) of the Companies taken
as a whole.

 

3.17.  Securities Laws.  To the best of the Companies’ knowledge, (i) no
Company has issued any unregistered securities in violation of the registration
requirements of Section 5 of the Securities Act of 1933, as amended, or
any other law, and (ii) no Company is violating any rule, regulation or
requirement under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, in any material respect.

 

3.18.  Intellectual Property.  Each of the Companies possesses or has the
right to use all of the patents, trademarks, tradenames, service marks and
copyrights, and applications therefore, and all technology, knowhow, processes,
methods and designs used in or necessary for the conduct of its business,
without known conflict with the rights of others, which conflict could
reasonably be expected to have a material adverse effect on the business,
operations, properties, assets or condition (financial or otherwise) of the
Companies taken as a whole.

 

3.19.  Environmental, Health and Safety Laws.  There does not exist any violation by any of
the Companies of any applicable Requirement of Law relating to environmental,
pollution, health or safety matters which will or threatens to impose a
material liability on any of the Companies or which would require material
expenditure by any of the Companies to cure. 
None of the Companies has received any notice to the effect that any of
its operations or properties are not in material compliance with any such
Requirement of Law or notice that it or its property is the subject of any
governmental investigation evaluating whether any remedial action is needed to
respond to any release of any toxic or hazardous waste or substance to the
environment, which noncompliance or remedial action could reasonably be
expected to have a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise) of the Companies taken
as a whole.

 

SECTION 4.  CONDITIONS PRECEDENT

 

This Agreement shall
become effective upon satisfaction of the conditions set forth in subsections
4.1 through 4.4, and the Banks shall not be required to make any Extensions of
Credit hereunder unless those conditions have been satisfied, and unless each
of the conditions set forth in subsections 4.6 through 4.9 is satisfied as of
the date requested for the Extension of Credit, provided, that, the condition
set forth in subsection 4.2(c) may, at the option of the Company, be
satisfied subsequent to the Effective Date provided that it is satisfied by the
earlier of February 15, 2006 or the date on which the Company completes
its placement of senior secured notes that is anticipated to close in January,
2006:

 

59

 

4.1.  Credit Agreement; Existing Revolving
Credit Agreement.

 

(a)  Credit
Agreement.  The Companies shall have
delivered this Agreement, executed by a Responsible Officer, to each Bank.

 

(b)  Existing
Credit Agreements.  To the extent of
any amounts outstanding under the Existing Credit Agreement, if any, the
Company shall have requested Revolving Loans and/or Swing-Line Loans in the
aggregate amount necessary to pay to the lenders all outstanding principal and
all interest, fees and other charges accrued through the Effective Date under
the Existing Credit Agreement, and shall have delivered all documents required
by subsection 2.4 to request Revolving Loans and/or Swing-Line Loans, each duly
executed by a Responsible Officer, to the Administrative Agent, and the
Administrative Agent shall have received proof satisfactory to the
Administrative Agent that the Existing Credit Agreement has been terminated,
and all amounts owed thereunder have been paid.

 

4.2.  Notes and Documents Relating to Liens.

 

(a)  Notes.  The Administrative Agent shall have received
for the account of the Banks Notes, payable to the order of each Bank,
conforming to the requirements hereof and duly executed by a Responsible
Officer.

 

(b)  Drafts.   If requested by the Administrative Agent and
each Bank, each of the Administrative Agent and each Bank shall have received
drafts drawn on it, conforming to the requirements of subsections 2.18(c) and
2.19(g) hereof and duly executed by a Responsible Officer.

 

(c)  UCC Searches.  The Administrative Agent shall have received
copies of the UCC searches with respect to the Company made in the offices of
the Wisconsin and New York Secretaries of State, the Register of Deeds for
Washington, Dodge, Milwaukee and Waukesha Counties, Wisconsin, the Register of
Deeds (or Clerk of Superior Court) for Upson County, Georgia, the Register of
Deeds (or County Clerk) for Saratoga County, New York, the County Clerk of the
County Commission, Berkley County, West Virginia, the Secretary of State of
West Virginia and the Wisconsin Department of Financial Institutions, all with
a “search-through” date of no earlier than October 1, 2005, together with
an updated search from the Wisconsin Department of Financial Institutions
requested no earlier than October 25, 2005, all showing no Liens affecting
the Restricted Property of the Company other than Liens permitted under
subsection 6.1 and Liens securing the Existing Loan Agreement.

 

4.3.  Legal Opinion.  The Administrative Agent shall have received,
for the account of each Bank, an opinion of in-house counsel to the Companies,
dated as of the Effective Date, addressed to the Banks, substantially in the
form of Exhibit M hereto and covering such other matters as the Banks may
reasonably require.

 

4.4.  Corporate Documents and Certificates.

 

(a)  Corporate
Proceedings of the Companies.  The
Administrative Agent shall have received, with a counterpart for each Bank, a
copy of the resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of each of the

 

60

 

Companies authorizing (i) the
execution, delivery and performance of this Agreement, the Notes and the other
Loan Documents to which it is a party, and (ii) the Extensions of Credit
contemplated hereunder, certified by the Secretary or an Assistant Secretary of
each of the Companies as of the Effective Date, which certificate shall state
that the resolutions thereby certified have not been amended, modified, revoked
or rescinded as of the date of such certificate.

 

(b)  Incumbency
Certificates of the Companies.  The
Administrative Agent shall have received, with a counterpart for each Bank, a
certificate of each of the Companies, dated the Effective Date, as to the
incumbency and signature of the officers of each of the Companies executing any
Loan Document, satisfactory in form and substance to the Administrative Agent
and its counsel, executed by the Secretary or any Assistant Secretary of each
of the Companies.

 

(c)  Corporate
Documents.  The Administrative Agent
shall have received, with a counterpart for each Bank, true and complete copies
of the certificate of incorporation and by-laws of each of the Companies,
certified as of the Effective Date as true, complete and correct copies thereof
by the Secretary or an Assistant Secretary of each of the Companies.

 

(d)  Good
Standing Certificates.  The
Administrative Agent shall have received, with a counterpart for each Bank,
copies of certificates dated as of a recent date from the Secretary of State or
other appropriate authority of such jurisdiction, evidencing the good standing
(or comparable status) of the Companies in its jurisdiction of organization and
each State where the ownership, lease or operation of property or the conduct
of business requires it to qualify as a foreign corporation, except where the
failure so to qualify would not have a material adverse effect on the business,
operations, condition (financial or otherwise) or prospects of the Companies
taken as a whole.

 

4.5.  Documentation; Initial Extension of Credit.  Upon determining that all conditions set
forth in subsections 4.1 through 4.4 above have been satisfied, and receiving
each Bank’s Pro Rata Share of any Revolving Loans to be made, the
Administrative Agent shall make the proceeds of the Acceptances and Revolving
Loans described in subsection 4.1(b) available to the Companies by
applying said proceeds to satisfy all obligations of the Companies under the
Existing Credit Agreement.  Each of the
Banks acknowledges that, upon such application, the Companies will have
satisfied all obligations under the Existing Credit Agreement other than
obligations that survive the repayment of the notes under, and termination of,
the Existing Credit Agreement.  Each of
the Companies acknowledges that from and after the Effective Date, the
Companies shall have no right to obtain Extensions of Credit under the Existing
Credit Agreement.  The Acceptances and
Revolving Loans described in subsection 4.1(b) shall be treated as
Acceptances under subsection 2.18 hereof and Revolving Loans under subsections
2.2 through 2.16 hereof, and the Obligations of the Companies and the Banks
with respect to those Acceptances and Revolving Loans shall be as described in
subsections 2.18 and 2.2 through 2.16, respectively, notwithstanding the
creation of those Acceptances and Revolving Loans without compliance with the
notice requirements or any other provision described in subsections 2.18 and
2.2 through 2.16, respectively.  Except
as described in the preceding portion of this subsection 4.5, the Banks shall
have no obligation to make any Extension of Credit unless the Companies shall
have delivered to the Administrative Agent, in a timely fashion, all written or
oral notices or requests, or other documents, required by the provisions of
this Agreement to be 

 

61

 

executed and delivered to
the Administrative Agent on or before the Bid Banker’s Acceptance Creation
Date, Borrowing Date or Drawing Date, as appropriate, and the matters certified
in any such request shall be true and correct on the date thereof and shall be
true and correct on the date of the Loan requested therein or confirmed thereby
or the Effective Date, as the case may be.

 

4.6.  Maximum Extensions of Credit.  The requested Extension of Credit does not
and would not cause the Total Outstandings to exceed the Total Commitments.

 

4.7.  Representations and Warranties.  The representations and warranties made by
the Companies herein, in any Loan Document, or in any certificate, document,
financial statement or other statement delivered hereunder shall be true as of
the Bid Banker’s Acceptance Creation Date, Borrowing Date or Drawing Date, as
the case may be, to the same extent as if made on and as of such date and shall
be true after giving effect to each such transaction.

 

4.8.  No Default or Event of Default.  No Default or Event of Default has occurred
and remains uncured as of the Bid Banker’s Acceptance Creation Date, Borrowing
Date or Drawing Date, as the case may be and no Default or Event of Default
shall have occurred after giving effect to each such transaction.

 

4.9.  Additional Matters.  All other documents and legal matters in
connection with the transactions contemplated by this Agreement are, as of the
Bid Banker’s Acceptance Creation Date, Borrowing Date or Drawing Date, as the
case may be, satisfactory in form and substance to the Banks and counsel for
the Banks.

 

SECTION 5.  AFFIRMATIVE COVENANTS

 

The Companies hereby
agree that, so long as the Commitments remain in effect, any Note remains
outstanding and unpaid, any Draft or Bid Banker’s Acceptance is outstanding or
any amount is owed to any of the Banks hereunder, the Company shall, and in the
case of the agreements set forth in subsections 5.3 through 5.9, all of the
Companies shall:

 

5.1.  Financial Statements.  Furnish to each Bank:

 

(a)  as soon
as available, but in no event more than ninety days after the end of each
fiscal year of the Company, a copy of the consolidated balance sheet of the
Company and its Restricted Subsidiaries as at the end of such year and the
related consolidated statements of operations, stockholders’ investment and
cash flows for such year, setting forth in each case in comparative form the
figures for the previous year, certified, without a “going concern” or like
qualification or exception or any qualification arising out of the scope of the
audit, by independent certified public accountants of nationally recognized
standing acceptable to the Administrative Agent; and

 

(b)  as soon
as available, but in no event more than forty-five days after the end of each
of the first three quarterly periods of each fiscal year of the Company, the
unaudited consolidated balance sheet of the Company and its Restricted
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of operations and cash flows of the Company and its
Restricted Subsidiaries for such quarterly period and the portion of the fiscal
year through such date, setting forth in each case in comparative 

 

62

 

form the figures for the
same period during the previous year, certified by a Responsible Officer
(subject to normal year-end audit adjustments).

 

All such financial statements shall be complete and
correct in all material respects and be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein (except that financial statements described in subsection 5.1(b) may
be presented without footnotes and except as otherwise approved by such
accountants or Responsible Officer, as the case may be, and disclosed therein).

 

5.2.  Certificates; other Information.  Furnish to each Bank:

 

(a) 
concurrently with the delivery of the financial statements referred to in
subsection 5.1(a), above, a certificate from the independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;

 

(b) 
Reserved;

 

(c) 
concurrently with the delivery of the financial statements referred to in
subsection 5.1(a) and (b) above, a certificate in the form attached
hereto as Exhibit N from a Responsible Officer (i) stating that, to
the best of such officer’s knowledge, the Companies have, during the applicable
period, observed or performed all of their covenants and other agreements and
satisfied every condition contained in this Agreement and the Notes, and (ii) showing
in detail the calculations supporting such statement in respect of subsections
6.7, 6.8, 6.9 and 6.10;

 

(d) 
concurrently with the financial statements referred to in subsections 5.1(a) and
5.1(b), above, and as of the date of such financial statements, a schedule in
the form of Exhibit O hereto listing all letters of credit outstanding for
the account of any of the Companies, setting forth a summary of invoices and
paper purchases by state, aggregate shipments by state with respect to all
transactions relied on as the basis for eligibility of Acceptances and Bid
Banker’s Acceptances, and a summary of trade receivable aging statistics and
valuing on a FIFO basis all inventory belonging to any of the Companies and
which the Companies have on hand (excluding, however, inventory that is not
new, unused, unencumbered, in good condition and readily usable or salable in
the ordinary course of business), setting forth a summary of all transactions
eligible for financing by an Acceptance and listing all outstanding Interest
Rate Agreements, Foreign Exchange Agreements and deposits or prepayments
described in subsection 6.12;

 

(e) 
promptly, such additional financial and other information as the Banks may from
time to time reasonably request;

 

(f)  as soon
as available, a copy of registration statements, reports on Form 10-K and
10-Q, proxy statements and such other statements and reports as may be filed
with the Securities and Exchange Commission under the Securities Act of 1933,
or filed with the Commission or sent to shareholders after the Company has
registered securities under Section 12 of the Securities Exchange Act of
1934; and

 

63

 

(g)  promptly
upon preparation thereof, all prospectuses, offering circulars, offering
memoranda, or similar materials relating to any public or private offering of
securities of the Companies.

 

5.3.  Payment of Taxes and Other Obligations.  Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all taxes,
assessments, and other governmental charges or levies imposed upon it, its
income or its Properties, and all other items of Indebtedness (but only to the
extent that failure to pay such Indebtedness would constitute an Event of
Default under the provisions of subsection 7.1(e) hereof) and other
obligations of whatever nature, unless the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Company or its Subsidiaries, as the case may be.  For purposes of this subsection 5.3, accounts
payable shall be considered delinquent only if more than 90 days past due.

 

5.4.  Conduct of Business and Maintenance of
Existence.  Continue to engage in
business of the same general type as now conducted by it, and preserve, renew
and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of its business; and comply with all
Contractual Obligations and Requirements of Law except to the extent that the
failure to comply therewith could not have a material adverse effect upon the
business, operations, assets, Property, prospects or financial condition of the
Company and its Subsidiaries taken as a whole.

 

5.5.  Maintenance of Property, Insurance.  Keep all Property useful and necessary in its
business in good working order and condition; maintain with financially sound and
reputable insurance companies insurance on all of 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 engaged in the same or a similar business; and
furnish to each of the Banks, upon written request, full information as to the
insurance carried.

 

5.6.  Inspection of Property; Books and Records;
Discussions.  (i) Keep proper
books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; (ii) permit
representatives of each Bank to visit and inspect any of its Properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired; and (iii) permit
representatives of each Bank to discuss the business, operations, assets,
Properties, prospects and financial condition of the Companies with officers of
the Companies and with their independent certified public accountants.

 

5.7.  Notices.  Promptly give notice to each Bank:

 

(a)  of the
occurrence of any Default or Event of Default;

 

(b)  of any
material default known to a Responsible Officer of the Company or event of
default under any Contractual Obligation of the Companies;

 

(c)  of any
litigation, investigation or proceeding which may exist at any time between the
Companies and any Governmental Authority, and which, if adversely 

 

64

 

determined, could have a
material adverse effect upon the business, operations, assets, Property,
prospects or financial condition of the Companies taken as a whole;

 

(d)  of any
litigation or proceeding affecting the Companies, their Property, in which the
amount involved is $3,000,000 or more and which is not covered by insurance or
in which injunctive or similar relief is sought;

 

(e)  of the
following events, as soon as possible and in any event within 30 days after the
Company knows or has reason to know thereof: 
(i) the occurrence or expected occurrence of any Reportable Event
with respect to any Plan with respect to which any of the Companies is an
employer; (ii) the institution of proceedings or the taking or expected
taking of any other action by PBGC or the Companies or any Commonly Controlled
Entity to terminate, withdraw or partially withdraw from any such Plan and with
respect to a Multiemployer Plan, the reorganization or insolvency of such a
Plan, and in addition to such notice, deliver to the Banks whichever of the
following may be applicable:  (A) a
certificate of the chief financial officer of the Company setting forth details
as to such Reportable Event and the action that the Company or Commonly
Controlled Entity proposes to take with respect thereto, together with a copy
of any notice of such Reportable Event that may be required to be filed with
the PBGC, or (B) any notice delivered by the PBGC evidencing its intent to
institute such proceedings or any notice to the PBGC that such Plan is to be
terminated, as the case may be; or (iii) of any meeting of the
shareholders of any of the Companies;

 

(f)  of any
material adverse change in the business, operations, assets, Property,
prospects or financial condition of the Company or any of its Restricted
Subsidiaries;

 

(g) 
immediately of any Change in Control, and immediately of any Change in Control
anticipated by the Company to occur in or within thirty (30) days (including
with such notice in each case, without limitation, the identity of any possible
acquiring Person, and the price to be paid from each share of voting stock
outstanding, whether in cash, stock, indebtedness or other instrument or
property).

 

5.8.  Environmental Matters; Reporting.  The Companies will observe and comply with,
and the Company will cause each of its Subsidiaries to observe and comply with,
all Requirements of Law relating to health, safety, pollution, hazardous
materials or other environmental matters to the extent non-compliance could
result in a material liability or otherwise have a material adverse effect on
the Companies taken as a whole.  The
Company will give the Administrative Agent prompt written notice of any
violation as to any environmental matter by the Company or any Subsidiary and
of the commencement of any judicial or administrative proceeding related to
health, safety or environmental matters (i) in which an adverse
determination or result could result in the revocation of or have a material
adverse effect on any operating permits, air emission permits, water discharge
permits, hazardous waste permits or other permits held by the Company or any
Subsidiary which are material to the operations of the Company or such
Subsidiary, or (ii) which will or threatens to impose a material liability
on the Company or such Subsidiary to any Person or which will require a
material expenditure by the Company or such Subsidiary to cure any alleged
problem or violation.

 

65

 

5.9.  Performance by the Companies.  Promptly pay each of the Obligations when due
and promptly make any payment required under this Agreement or any of the other
Loan Documents, and faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Agreement and in
any and every Loan Document executed and delivered hereunder.

 

5.10.  Reserved.

 

Each notice pursuant to
this section 5 shall be accompanied by a statement of the chief executive
officer or chief financial officer of the Company setting forth details of the
occurrence referred to therein and stating what action the Company proposes to
take with respect thereto.  For all
purposes of subsection 5.7(e), the Company shall be deemed to have all
knowledge or knowledge of all facts attributable to the administrator of any
such Plan.

 

SECTION 6.  NEGATIVE COVENANTS

 

The Companies hereby
agree that, so long as the Commitments of the Banks remain in effect, any Note
remains outstanding and unpaid, any Draft or Bid Banker’s Acceptance is
outstanding or any amount is owed to any of the Banks hereunder, the Companies
shall not directly or indirectly:

 

6.1.  Limitation on Liens.  Create, incur, assume or suffer to exist, any
Lien upon any of the Companies’ Restricted Property, except:

 

(a)  Liens
for taxes, assessments or governmental charges which are not yet due or
delinquent or which are being contested in good faith by appropriate
proceedings and provided adequate reserves with respect thereto are maintained
on the books of the Companies, as the case may be, in accordance with GAAP;

 

(b)  carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising by operation of law in the ordinary course of business, provided the
obligations giving rise to such Liens are not yet due or delinquent or are
being contested in good faith by appropriate proceedings and provided adequate
reserves with respect thereto are maintained on the books of the Companies, as
the case may be, in accordance with GAAP;

 

(c)  pledges
or deposits made in connection with workmen’s compensation laws, unemployment
insurance laws, social security laws or other similar legislation;

 

(d)  deposits
made to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

 

(e)  Liens in
favor of the United States of America for amounts paid to the Companies as
progress payments under government contracts; and

 

(f)  Liens in
favor of the Banks and securing the Obligations on a pro rata basis.

 

66

 

6.2.  Prohibition of Fundamental Changes.  Enter into any transaction of merger,
consolidation or amalgamation; liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution); convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or a
substantial part of its business or assets; or make any material change in the
nature of its present business or its method of conducting its present
business, except that, if no Default or Event of Default exists or would exist
following consummation of the transaction:

 

(a)  any
Subsidiary may be merged or consolidated with or into the Company or a
Restricted Subsidiary (provided, that the Company or such Restricted
Subsidiary shall be the continuing or surviving corporation);

 

(b)  any
Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Company or another
Restricted Subsidiary;

 

(c)  the
Company or any Restricted Subsidiary may sell, lease, transfer or otherwise
dispose of all of the business, assets, stock, partnership interests or other
evidence of beneficial ownership of any Unrestricted Subsidiary;

 

(d)  the
Company or any Restricted Subsidiary may sell assets (other than Restricted
Property) to the issuer of Phantom Bonds contemporaneously with such issuance,
if and only if the Company or the Restricted Subsidiary simultaneously
purchases all of such issue of Phantom bonds and leases such assets;

 

(e)  the
Company may merge or consolidate with any other Person so long as the Company
shall be the continuing or surviving corporation; and

 

(f)  a
Restricted Subsidiary may merge or consolidate with any other Person (other
than as provided above in this Section 6.2) so long as such Restricted
Subsidiary shall be the continuing or surviving corporation or entity.

 

6.3.  Prohibition Against Change in Control.  Permit any Change in Control to occur.

 

6.4.  Reserved.

 

6.5.  Investments in Unrestricted Subsidiaries;
Loans to Employees.  Make, or commit
to make, any advance, loan, extension of credit to any employee of the
Companies or purchase any stock or ownership interest in any Unrestricted
Subsidiary except:

 

(a)  loans to
employees for the purpose of purchasing the Company’s common stock so long as
the aggregate outstanding amount thereof does exceed $3,000,000 at any time;

 

(b) 
purchases or acquisitions of the stock or ownership interests in Unrestricted
Subsidiaries, such that the sum of (1) the net book value of all capital
stock (including common and preferred stock) of all Unrestricted Subsidiaries
held by the Company and its Restricted Subsidiaries, plus (2) the
face amount of all Indebtedness, Contingent Obligations and other Liabilities
of all Unrestricted Subsidiaries to or guaranteed by the 

 

67

 

Company and its
Restricted Subsidiaries (other than Unrestricted Subsidiary Trade Payables),
does not exceed thirty percent (30%) of the sum of the face amount of the
capital stock of the Company plus (or minus in the case of a deficit) all
additional paid-in capital, surplus and retained earnings of the Company and
its Subsidiaries, minus the sum of the cost of shares of capital stock
(including common and preferred stock) of the Company held by the Company as
treasury stock or held by a Restricted Subsidiary, all as determined in
accordance with GAAP consistently applied on a consolidated basis.

 

6.6.  Compliance with ERISA.  (a) Terminate any Plan if such
termination results in any material liability to the PBGC, (b) engage in
any “prohibited transaction” (as defined in ERISA and the Code) if such
transaction involves a Plan and could result in a material liability for an
excise tax or civil penalty in connection therewith, or (c) incur or
suffer to exist any material “accumulated funding deficiency” (as defined in
ERISA), whether or not waived, involving any condition which creates a material
risk that any of the Companies will incur a material liability to the PBGC by
reason of any termination of any such Plan.

 

6.7  Maintenance of Adjusted Consolidated Net
Worth.  The Company shall not permit
Adjusted Consolidated Net Worth to be at any time less than the applicable
Minimum Adjusted Consolidated Net Worth.

 

6.8.  Maintenance of Consolidated Total
Liabilities-to-Consolidated Net Worth Ratio.  Permit the ratio of Consolidated Total
Liabilities to Consolidated Net Worth to exceed: (i) 3.0 to 1.0 at any
time from June 30 through December 30 each year; and (ii) 2.5 to
1.0 at any other time.

..

 

6.9.  Minimum Interest Coverage Ratio.  Permit the Minimum Interest Coverage Ratio as
of the close of each fiscal quarter of the Company to occur after the Effective
Date to be less than 2.25 to 1.0 for the period of four fiscal quarters ending
on such date.

 

6.10.  Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage Ratio as of
the close of each fiscal quarter of the Company to occur after the Effective
Date to be less than 1.65 to 1.0 for the period of four fiscal quarters ending
on such date.

 

6.11.  Margin Stock.  Use the proceeds of any Loan to purchase or
carry any margin stock (within the meaning of Regulation U of the Board), to
extend credit to others for the purpose of purchasing or carrying margin stock,
or to undertake any other activity inconsistent with the Board’s
Regulations.  If requested by the
Administrative Agent, the Company shall furnish to the Administrative Agent a
statement in conformity with the requirements of Federal Reserve Form U-1
referred to in Regulation U.

 

6.12.  Equipment Deposits.  Make, or agree to make, any deposit with or
prepayment to any manufacturer or other vendor of equipment (as defined in the
UCC) in amounts that exceed the amounts that would be deposited or prepaid by a
reasonably prudent, similarly situated company engaged in the same or a similar
business.

 

68

 

6.13.  Hedging Agreements.  Enter into Hedging Agreements except in the
ordinary course of its business and in order to manage risk related to interest
rates, commodity prices, foreign exchange rates, or other risks described in
the definition of Hedging Agreement.

 

6.14.  Negative Pledge Agreements.  Create, incur, assume or suffer to exist any
agreement, other than this Agreement, which places any restrictions upon the
right of the Companies or any Restricted Subsidiary to sell, pledge or
otherwise dispose of any of its Restricted Property now owned or hereafter
acquired.

 

SECTION 7.  EVENTS OF DEFAULT

 

7.1.  Events of Default.  An Event of Default shall be deemed to have
occurred if:

 

(a)           the Company shall fail to pay any
principal on any Note when due in accordance with the terms thereof, or to pay
any interest on any Note, or to pay any Acceptance or Bid Banker’s Acceptance
on its maturity date, or to pay any fees or any other amount payable hereunder
within one Business Day after notice given by any Bank or the Administrative
Agent of nonpayment of any such amount when due in accordance with the terms
thereof or hereof; or

 

(b)           any representation or warranty made
or deemed made by any of the Companies in the Loan Documents including, but not
limited to, this Agreement or any certificate, document, financial statement or
other statement furnished at any time under or in connection with the Loan
Documents, including but not limited to, this Agreement, proves to have been
incorrect in any material respect on or as of the date made or, except for any
matter which does not constitute an Event of Default under paragraph 7.1(e) hereof,
on or as of the date deemed made; provided, however, that an
incorrect representation and warranty to the effect that no Default has
occurred and remains uncured made in connection with a borrowing request under
this Agreement shall not constitute an Event of Default under this subsection
7.1(b) if (i) when making such representation and warranty the Company
had no knowledge or reason to know of the existence of such Default and (ii) promptly
after acquiring such knowledge or reason to know thereof the Company shall have
remedied the state of facts creating such Default such that such Default is
cured; or

 

 

(c)           the Company or any Subsidiary fails
to perform or observe any covenant set forth in Section 6 hereof; or

 

(d)           the Company or any Restricted
Subsidiary fails to perform or observe any other term, covenant or agreement
contained herein or in the Notes or other Loan Documents and such failure
continues unremedied for thirty days following notice of such Default; or

 

(e)           (i) any of the Companies fails
to make when due and fails to cure within any applicable grace period, any
payment which is due pursuant to any Contingent Obligation or Indebtedness
(other than any Indebtedness owing under the Notes or hereunder) or operating
lease involving or having a current principal amount in excess of 

 

69

 

$5,000,000; (ii) any
of the Companies fail to make when due, and within any applicable grace period
if less than 31 days, any payment which is due pursuant to any Contingent
Obligation (other than a Contingent Obligation described in clause (i) of
this paragraph) or Indebtedness (other than any Indebtedness arising under the
Notes or hereunder or described in clause (i) of this paragraph) or
operating lease (other than any operating lease described in clause (i) of
this paragraph), (iii) any of the Companies in any other way defaults in
connection with any Contingent Obligation or operating lease and such default
enables others to declare such Contingent Obligation or operating lease to be
due or terminated, demand payment or accelerate maturity, (iv) any of the
Companies in any other way defaults in connection with any Indebtedness and
such default enables others to accelerate such Indebtedness or (v) any
event occurs under any Interest Rate Agreement permitting the party or parties
thereto other than the Companies to terminate such agreement or demand payment
of a termination fee thereunder or (vi) any foreclosure action is
instituted with respect to a mortgage securing any Indebtedness of the
Companies; provided, that in the case of a default under clauses (ii), (iii), (iv) and
(v) of this paragraph, the amount of the payment past-due, the Contingent
Obligation permitted to be accelerated, the Indebtedness permitted to be
accelerated or the termination fee payable, when aggregated with all then
existing such past-due payments, Contingent Obligations permitted to be
accelerated, Indebtedness permitted to be accelerated, and termination fees
payable, exceeds $5,000,000; or

 

(f)            the aggregate face amount of
commercial paper notes under which any of the Banks acts as agent exceeds at
any time the sum of the Total Available Commitments; or

 

(g)           the Company or any Restricted
Subsidiary:  (i) becomes unable to
pay its debts when due whether or not said debts are subject to a bona  fide
dispute, otherwise becomes insolvent, or admits in writing that it is
insolvent; (ii) makes a general assignment for the benefit of creditors; (iii) makes
a general assignment to an agent authorized to liquidate any substantial amount
of its Property; (iv) files, or consents to the filing of, any proceeding,
petition or case under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors which constitutes the commencement of a case and/or constitutes an
order for relief or which seeks:  (a) an
adjudication that it is bankrupt or insolvent, (b) a reorganization,
arrangement, winding up, liquidation, dissolution, composition or other relief
with respect to its debts, or (c) the appointment of a receiver, trustee,
custodian or other similar official for it or any substantial portion of its
assets; (v) has filed against it such a proceeding, petition or case if
such proceeding, petition or case remains undischarged, undismissed or unbonded
for 60 days or results in such an adjudication, the entry of an order for such
relief or such an appointment; or (vi) has filed against it any proceeding
or action which seeks the issuance of a warrant of attachment, execution,
distraint or similar process against any substantial part of its assets if such
proceeding or action results in the issuance of such process and such process
is not vacated, discharged, stayed or fully bonded within 60 days of entry
thereof; or

 

(h)           (i) any Person engages in a “Prohibited
Transaction” (as defined in ERISA and the Code) which involves a Plan as to
which any of the Companies is an employer;

 

70

 

 

(ii) any “Accumulated
Funding Deficiency” (as defined in ERISA) arises with respect to any such Plan;
(iii) a Reportable Event occurs which in the opinion of counsel for the
Banks is likely to result in the termination of such a Plan for the purposes of
Title IV of ERISA and such Reportable Event remains unremedied for more than
ten days after notice thereof pursuant to Section 4043(a), (c) or (d) of
ERISA; (iv) proceedings are commenced to have a trustee appointed to
administer or terminate such a Plan and such proceedings are not dismissed
within ten days and are in the opinion of counsel for the Banks likely to
result in the termination of the Plan for the purposes of Title IV of ERISA; (v) a
trustee is appointed to administer or terminate such a Plan for purposes of
Title IV of ERISA; (vi) such a Plan is terminated for purposes of Title IV
of ERISA; or (vii) any other event or condition occurs or exists, provided
such “Prohibited Transaction”, “Accumulated Funding Deficiency”, Reportable
Event, proceedings, appointment, termination, event or condition, together with
all other such “Prohibited Transactions”, “Accumulated Funding Deficiencies”,
Reportable Events, proceedings, appointments, terminations, events or
conditions, if any, could subject the Company or any of its Restricted
Subsidiaries to any tax, penalty or other liability in the aggregate material
in relation to the business, operations, property, prospects or financial
condition of the Company and its Restricted Subsidiaries taken as a whole; or

 

(i)            a judgment, decree, warrant, writ,
attachment, execution or similar process which is not within sixty days of the
entry thereof satisfied, released, vacated, discharged, stayed or fully bonded
pending appeal, is entered, issued or levied against the Company or a
Restricted Subsidiary and together with other such processes, if any,
represents an aggregate liability (not paid or covered by insurance) of
$2,000,000 or more.

 

7.2.  Rights Upon Event of Default.  If an Event of Default specified in subparagraphs
7.1(f), 7.1(g)(i), 7.1(g)(ii), 7.1(g)(iii), 7.1(g)(iv) or 7.1(g)(v) shall
occur, the Banks’ obligations to make Extensions of Credit hereunder shall
immediately terminate and any Loan or Loans (with accrued interest thereon) and
all other amounts owing under this Agreement, all Drafts, all drafts accepted
in connection with a Bid Banker’s Acceptance and the Notes shall immediately
become due and payable.  If any other
Event of Default shall occur, upon receiving written direction to such effect
from the Required Banks, the Administrative Agent  shall (i) by notice of default to the
Company, declare the Banks’ obligations hereunder terminated forthwith,
whereupon such obligations shall terminate, and/or (ii) by notice of
default to the Company, declare any Loan or Loans, all Drafts, all drafts
accepted in connection with a Bid Banker’s Acceptance and all amounts owing
hereunder and under the Notes to be due and payable forthwith, whereupon the
same shall become immediately due and payable. 
Except as expressly provided above in this subsection, presentment,
demand, protest and all other notices of any kind, notwithstanding anything
herein or in the Notes contained, are hereby expressly waived.  Whenever the maturity of the Loan Documents
shall have been accelerated or declared accelerated pursuant to the provisions
of this subsection 7.2, the Companies will promptly deposit with the
Administrative Agent funds in an amount equal to the aggregate face amount of
all Acceptances and Bid Banker’s Acceptances in accordance with subsection 2.7
hereof.

 

If the Banks’ obligations
to make Extensions or Credit shall have been terminated or the obligations of
the Companies under this Agreement and all of the Loan Documents shall have
been declared due and payable pursuant to the provisions of this subsection
7.2, the Banks agree, 

 

71

 

by and among themselves,
that any funds received after such termination from or on behalf of the
Companies by the Administrative Agent, the Agent or any of the Banks (except
funds received by any Bank as a result of a purchase pursuant to the provisions
of subsection 9.13 hereof) shall be remitted to the Administrative Agent if
received by any Bank and applied by the Administrative Agent in the following
manner and order:

 

(a)  first,
to reimburse the Administrative Agent and the Banks for any expenses due from
the Companies pursuant to the provisions of subsection 9.6 hereof;

 

(b)  second,
to the payment to the Administrative Agent, of the outstanding principal
balance of, and accrued but unpaid interest on, any outstanding Swing-Line
Loans;

 

(c)  third,
to make the deposit of funds required by the last sentence of the first
paragraph of this subsection 7.2, in accordance with subsection 2.7 hereof, and
to the payment of and all outstanding matured Drafts not paid from funds
deposited under subsection 2.7;

 

(d)  fourth,
to the payment to each Bank of accrued and unpaid interest on the outstanding
Loans, facility fees, Bid Banker’s Acceptance fees and Bid Loan fees, ratably
in the proportion which the aggregate accrued and unpaid interest on the
outstanding Loans, facility fees, Bid Banker’s Acceptance fees and Bid Loan
fees payable to such Bank bears to the aggregate accrued and unpaid interest on
all outstanding Loans, facility fees, Bid Banker’s Acceptance fees and Bid Loan
fees payable to any and all of the Banks;

 

(e)  fifth,
to the payment to each Bank of the outstanding unpaid principal balance of the
Loans and, without duplication, the face amount of any outstanding Bid Banker’s
Acceptances and any outstanding unpaid principal balance of the amounts payable
with respect to Bid Banker’s Acceptances, ratably in accordance with the
proportion which the Outstandings payable to each Bank have to the Total
Outstandings, in such order as the Administrative Agent in its sole discretion
may determine; and

 

(f)  sixth,
to the payment to each Bank and the Administrative Agent of any other amount
owing under this Agreement or any of the Loan Documents.

 

If the Obligations of the
Companies under all of the Loan Documents shall have become, or been declared
to be, due and payable pursuant to the provisions of this subsection 7.2, the
Administrative Agent may, and, upon (a) the direction of the Required
Banks and (b) the providing by all of the Banks to the Administrative
Agent of an indemnity in form and substance satisfactory to the Administrative
Agent against all expenses and liabilities, shall, proceed to enforce the
rights of the holders of the Loan Documents, the amounts payable with respect
to Acceptances and Bid Banker’s Acceptances by suit in equity, action at law
and/or other appropriate proceedings, whether for payment or the specific
performance of any covenant or agreement contained in this Agreement or the
Loan Documents.  The Administrative Agent
shall be justified in failing or refusing to take any action hereunder unless
it shall be indemnified to its 

 

72

 

satisfaction by each of
the Banks in its respective Pro Rata Share against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.

 

SECTION 8.  AGENCY RELATIONSHIP

 

8.1.  Agency.  The Banks hereby appoint U.S. Bank as their Administrative
Agent under this Agreement and the other Loan Documents and irrevocably
authorize the Administrative Agent to take such action on their behalf and to
exercise such powers and to perform such duties hereunder and thereunder as are
delegated to the Administrative Agent by the terms hereof and thereof and as
are necessary to fulfill their responsibilities pursuant hereto and thereto,
together with such powers as are reasonably incidental thereto.  Nothing contained herein shall be deemed to
create a fiduciary relationship between the Administrative Agent and the Banks
or the Companies.  The Documentation
Agent has no duties except as a Lender.

 

8.2.  Reimbursement.  The Companies shall pay or reimburse the
Administrative Agent for actual out-of-pocket expenses reasonably incurred by
it hereunder, including specifically the reasonable fees of counsel for the
Administrative Agent, incurred in connection with the development, preparation,
execution, administration or enforcement of or the preservation of any rights
under this Agreement and any other of the Loan Documents.

 

8.3.  No Representations or Warranties.  The Administrative Agent make no warranty or
representation to the Banks and shall not be responsible to the Banks for any
statements, warranties or representations made herein or in connection
herewith.  The Administrative Agent shall
not be responsible in any manner to the Banks for the effectiveness,
genuineness, due execution, validity or enforceability of the Loan Documents or
any certificate, report or other document used under or in connection with this
Agreement.  Neither the Administrative
Agent nor any of its directors, officers, employees, agents, attorneys-in-fact
or affiliates shall be required to make any inquiries concerning the performance
or observance by the Companies of the Loan Documents.  Neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken
by it or such Person under or in connection with the Loan Documents (except for
its or such Person’s own gross negligence or willful misconduct), or (ii) responsible
in any manner to any of the Banks for any recitals, statements, representations
or warranties made by the Companies or any officer thereof contained in the
Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under
or in connection with, the Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of the Loan Documents
or for any failure of the Companies to perform their obligations
hereunder.  The Administrative Agent
shall not be under any obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, the Loan Documents, or to inspect the properties, books or
records of the Companies.

 

8.4.  Credit Decision.  Each Bank acknowledges that it has
independently and without reliance upon the Administrative Agent and based upon
the financial statements of the Companies and such other documents and
information as they have deemed appropriate, made their own credit analyses and
decisions to enter into this Agreement. 
The Banks also acknowledge that they will, independently and without
reliance upon the Administrative Agent, 

 

73

 

and based on such
documents and information as they shall deem appropriate at the time, continue
to make their own credit decisions in taking or not taking action under this
Agreement.

 

8.5.  Discretion.  Except where otherwise specifically provided
in this Agreement, each of the Administrative Agent may act in its sole
discretion when exercising any rights, powers or privileges granted to it
hereunder.

 

8.6.  Counsel.  Each of the Administrative Agent may consult
with legal counsel selected by it, and any action taken or suffered in good
faith by it in accordance with the written opinion of such counsel shall be
full justification for protection to it.

 

8.7.  No Duty.  The Administrative Agent shall not be
required to take any action hereunder, nor shall any provision hereof be deemed
to impose a duty upon the Administrative Agent to take any action, if the
Administrative Agent shall determine, or shall have been advised by counsel,
that such action may result in personal liability or is contrary to the terms
of this Agreement.

 

8.8.  No Liability.  Neither the Administrative Agent nor any of
its directors, officers, employees or agents shall be liable for any action
lawfully taken or omitted to be taken by it or any of them under this Agreement
or in connection herewith, except for their own gross negligence or willful
misconduct.

 

8.9.  Rights as a Bank.  With respect to any Loan made by it and any
Note issued to it or draft accepted in connection with a Bid Banker’s
Acceptance or participation in an Acceptance under this Agreement, the
Administrative Agent shall have the same rights and powers hereunder as the
other Banks and may exercise the same as though it were not the Administrative
Agent, and the term “Bank” or “Banks” shall, unless the context
otherwise requires, include the Administrative Agent in its individual
capacity.  The Administrative Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking or trust business with the Company or any of its Subsidiaries as if it
were not the Administrative Agent.

 

8.10.  Indemnification.  The other Banks shall indemnify the
Administrative Agent (to the extent not reimbursed by the Companies) based on
their Pro Rata Shares, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed upon,
incurred by or asserted against the Administrative Agent for any action or
omission in any way relating to or omitted by the Administrative Agent, in its
agency capacity, under the Loan Documents; provided, that no Bank shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent’s gross negligence or willful
misconduct.  The agreements in this
subsection shall survive the payment of the Notes and all other amounts payable
hereunder.

 

8.11.  Resignation.  The Administrative Agent may resign at any
time as such by giving notice to all of the Banks and the Company of its
intention to resign.  Such resignation
shall take effect upon the appointment of a successor Administrative
Agent.  A successor Administrative Agent
shall be appointed by the Required Banks. 
If no successor Administrative Agent shall have been so appointed in a
timely manner, then the retiring Administrative Agent may, on 

 

74

 

behalf of the Required
Banks, appoint a successor Administrative Agent, which shall be a commercial
bank organized under the laws of the United States of America or any state
thereof and shall have combined capital and surplus of at least
$100,000,000.  The provisions of this Section 8
shall inure to the benefit to any successor Administrative Agent.

 

8.12.  Delegation of Duties.  The Administrative Agent may execute any of
its duties hereunder by or through agents or employees.

 

8.13.  Reliance.  The Administrative Agent shall be entitled to
rely and shall be fully protected in relying on any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telex or
teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper person
or persons.  The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
hereof unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent.  The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder unless it shall
first receive such advice or concurrence of the Required Banks as it deems
appropriate and be indemnified to its satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.  The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from action, hereunder in accordance with written instructions
signed by the Required Banks, as the case may be, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on the
Administrative Agent and any of the Banks, as the case may be, and on all
holders of the Notes.

 

8.14.  Notice of Default.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless it has actual knowledge of such facts or has received
notice from a Bank or the Company referring to the Loan Documents, describing
such Default or Event of Default and stating that such notice is a “notice
of default”.  In the event that the
Administrative Agent receives such a notice, it shall give notice thereof to
the Banks.  The Administrative Agent
shall take such action with respect to such Default or Event of Default
commensurate with its duties and responsibilities as set forth herein as shall
be reasonably directed by the Required Banks; provided, that unless and
until the Administrative Agent shall have received such directions, it may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Banks.

 

SECTION 9.  MISCELLANEOUS

 

9.1.  Amendments and Waivers.  With the written consent of the Required
Banks, the Administrative Agent and the Company or any Subsidiary, as the case
may be, may, from time to time, enter into written amendments, supplements or modifications
hereto for the purpose of adding provisions to any Loan Document or for the
purpose of changing in any manner the rights of the Banks or of the Company or
any Subsidiary, as the case may be, thereunder, and with the consent of the
Required Banks, the Administrative Agent on the behalf of the Banks may execute
and deliver to the Company or any Subsidiary, as the case may be, a written
instrument waiving, on such terms and conditions as the Administrative Agent
may specify in such instrument, any of the requirements of any Loan Document or
any Default or Event of Default and its 

 

75

 

consequences; provided,
however, that no such waiver and no such amendment, supplement or
modification shall (a) extend the scheduled or final maturity of any Note
or Draft, or reduce the rate or extend the time of payment of interest or
Commission thereon, or reduce the principal amount thereof, or change the
amount or terms of any Bank’s Commitment or amend, modify or waive any
provision of this subsection or reduce the percentage specified in the
definition of Required Banks, or consent to the assignment or transfer by the
Companies of any of their rights and obligations under this Agreement, or
amend, modify, or waive any provision of subsections 2.18(f), 2.19, 7.2
(subject to the rights of the Required Banks as stated therein), 9.1 or 9.15
hereof without the written consent of all the Banks or (b) amend, modify
or waive any provision of subsection 2.18 or Section 8 hereof without the
written consent of the then Administrative Agent, and there shall be no waiver
of a Default or Event of Default as described in subparagraphs 7.1(f) or (g) hereof
without the written consent of all of the Banks.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Banks and shall
be binding upon the Companies, the Banks, the Administrative Agent and all
future holders of the Notes.  In the case
of any waiver, the Companies and the Banks shall be restored to their former
position and rights under the Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing.  However, no waiver of a Default or Event of
Default shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

 

9.2.  Notices.  Unless otherwise specified, all notices,
requests and demands to or upon the respective parties hereto shall be deemed
to be effective only if in writing or if given by telegraph or telex and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made, in the case of a delivered notice, when delivered by hand, or,
in the case of a mailed notice, when deposited in the mail, air postage prepaid,
or, in the case of telegraphic notice, when delivered to the telegraph company,
or, in the case of telex notice, when sent, answer back received, addressed as
follows or to such other address as may be hereafter specified by the
respective parties hereto and any future holders of the Notes:

 

	
  The Company or any Restricted
  Subsidiary:

  	
   

  	
  N63 W23075 Highway 74

  
	
   

  	
   

  	
  Sussex, Wisconsin 53089

  
	
   

  	
   

  	
  Attention:
  Mr. John C. Fowler

  
	
   

  	
   

  	
  Vice President of
  Finance and Chief Financial Officer 

  
	
   

  	
   

  	
   

  
	
  U.S. Bank (as Lead Arranger,
  Administrative Agent and as a Bank):

  	
   

  	
  U.S. Bank National
  Association

  U.S. Bancorp Center

  
	
   

  	
   

  	
  800 Nicollet Mall

  
	
   

  	
   

  	
  Minneapolis, Minnesota
  55402

  
	
   

  	
   

  	
  Attention: Karen E.
  Weathers

  
	
   

  	
   

  	
   

  
	
  M & I (as a
  Syndication Agent and as a Bank):

  	
   

  	
  M & I
  Marshall & Ilsley Bank

  
	
   

  	
   

  	
  770 North Water Street

  
	
   

  	
   

  	
  Milwaukee, Wisconsin
  53202

  
	
   

  	
   

  	
  Attention: Donald
  Robinson-Gay

  

 

76

 

	
  Wachovia (as a
  Syndication Agent and as a Bank):

  	
   

  	
  Wachovia Bank, N.A.

  
	
   

  	
   

  	
  301 South College

  
	
   

  	
   

  	
  Wachovia Center

  
	
   

  	
   

  	
  Charlotte, NC 28288

  
	
   

  	
   

  	
  Attention: Douglas
  Sleeper

  
	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank (as
  the Documentation Agent and as a Bank):

  	
   

  	
  JPMorgan Chase Bank,
  N.A.

  111 East Wisconsin Ave.

  
	
   

  	
   

  	
  Milwaukee, WI 53202

  
	
   

  	
   

  	
  Attention: Brian
  Grossman

  
	
   

  	
   

  	
   

  
	
  Mizuho:

  	
   

  	
  Mizuho Corporate Bank,
  Ltd.

  
	
   

  	
   

  	
  311 South Wacker Drive

  
	
   

  	
   

  	
  Suite 2020

  
	
   

  	
   

  	
  Chicago, IL 60606

  
	
   

  	
   

  	
  Attention: Richard
  Dunning

  
	
   

  	
   

  	
   

  
	
  SunTrust:

  	
   

  	
  SunTrust Bank

  
	
   

  	
   

  	
  303 Peachtree Street,
  N.E., 10th Floor

  
	
   

  	
   

  	
  Atlanta, GA 30308

  
	
   

  	
   

  	
  Attention: Steven Deily

  
	
   

  	
   

  	
   

  
	
  Northern Trust:

  	
   

  	
  The Northern Trust
  Company

  
	
   

  	
   

  	
  50 South LaSalle Street

  
	
   

  	
   

  	
  Chicago, Illinois 60603

  
	
   

  	
   

  	
  Attention: Roger
  McDougal

  

 

provided, that any notice request or demand to or upon the
Banks pursuant to subsections 2.4, 2.6, 2.7 and 2.8 shall not be effective
until received.  A copy of any notice
sent to any of the Companies shall be sent to Andrew Schiesl, General Counsel
and Secretary, Quad/Graphics, Inc., W224 N3322 Duplainville Road,
Pewaukee, Wisconsin 53072.  Any
telephonic, telecopied or telexed instructions or notices to any party shall be
given by calling the telephone number or numbers, or by transmission to the
telecopy or telex numbers, indicated for such party on Exhibit R.

 

9.3.  Satisfaction of 4.7 and 4.8.  Each borrowing hereunder by the Companies
shall constitute a representation and warranty by the Companies that, as of the
date of such borrowing, the conditions set forth in subsections 4.7 and 4.8
have been and remain satisfied.

 

9.4.  No Waiver; Cumulative Remedies.  If the Banks fail to exercise, or delay before
exercising, any right, remedy, power or privilege hereunder, such failure or
delay shall not operate as a waiver thereof. 
The single or partial exercise of any right, remedy, power or privilege
hereunder shall not preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein 

 

77

 

provided are cumulative
and not exclusive of any rights, remedies, powers and privileges otherwise
provided by law.

 

9.5.  Survival of Representations and Warranties.  All representations and warranties made
hereunder and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the Notes.

 

9.6.  Indemnification.  The Companies shall (a) pay or reimburse
the Administrative Agent for all of its reasonable out-of-pocket costs and
expenses incurred in connection with the negotiation, consideration,
development, preparation and/or execution of, and any amendment, supplement or
modification to, the Loan Documents including, but not limited to, this
Agreement, the Notes or any other documents prepared in connection herewith
(whether or not any such amendment, supplement, or modification is effected or
consummated), and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the fees and disbursements of counsel
to the Administrative Agent, (b) pay or reimburse the Banks for all of
their costs and expenses including, but not limited to, litigation costs
incurred in connection with the enforcement or preservation of any rights or
questions arising under or interpretations of the Loan Documents including but
not limited to, this Agreement, the Notes or any such other documents,
including, without limitation, fees and disbursements of counsel to the Banks, (c) pay,
indemnify, and hold the Banks harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay
in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of
the Loan Documents, including but not limited to, this Agreement, the Notes or
any such other documents, and (d) pay, indemnify, and hold the Banks
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of the Loan Documents, including
but not limited to, this Agreement, the Notes or any such other documents (all
the foregoing, collectively, the “indemnified liabilities”), provided,
that the Companies shall have no obligation hereunder with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Banks or (ii) legal proceedings commenced against the
Banks by any security holder or creditor thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its capacity as
such.  The obligations in this subsection
shall survive repayment of the Notes and all other amounts payable hereunder.

 

9.7.  Reserved.

 

9.8.  Reemployment Indemnification.  Without duplication of the amounts due under
subsections 2.15 and 2.20(n), the Companies shall indemnify and hold each Bank
harmless from and against any loss which such Bank may sustain or incur if, as
a consequence of a Default or Event of Default, such Bank liquidates or
reemploys deposits acquired from third parties to make Eurodollar Loans or Bid
Loans.  A certificate from such Bank
setting forth amounts due pursuant to the preceding shall be conclusive absent
manifest error.  The obligations in this
subsection shall survive repayment of the Notes and all other amounts payable
hereunder.

 

78

 

9.9  Successors and Assigns; Participations;
Purchasing Banks.

 

(a)           This Agreement shall be binding upon
and inure to the benefit of the Companies, the Banks, the Administrative Agent,
all future holders of the Notes, and their respective successors and assigns,
except that the Companies may not assign or transfer any of their rights or
obligations under this Agreement without the prior written consent of each
Bank.

 

(b)           Any Bank may, in the ordinary course
of its commercial banking business and in accordance with applicable law, at
any time sell to one or more banks or other entities (“Participants”)
participating interests in any Loan or other Outstandings owing to such Bank,
the Notes held by such Bank, the Commitment or Available Commitment of such
Bank, any participation interest held by that Bank in any Acceptance or Letter
of Credit, the rights of that Bank with respect to any Bid Banker’s Acceptances
created by that Bank and any Bid Loans made by that Bank, or any other interest
of such Bank hereunder.  In the event of
any such sale by a Bank of participating interests to a Participant, such Bank’s
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement and the Company and the Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank’s rights and obligations under this Agreement.  The Companies agree that if amounts
outstanding under this Agreement, the Notes and the Loan Documents are due and
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to
have, to the extent permitted by applicable law, the right of setoff in respect
of its participating interest in amounts owing under this Agreement and any
Note or other Loan Document to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this Agreement
or any Note or other Loan Document; provided, that such right of setoff
shall be subject to the obligation of such Participant to share with the Banks,
and the Banks agree to share with such Participant, as provided in subsection
9.13.  The Company also agrees that each
Participant shall be entitled to the benefits of subsections 2.14, 2.15, 9.6,
9.7 and 9.8 with respect to its participation in the Commitments and the Loans
and other Extensions of Credit outstanding from time to time; provided,
that no Participant shall be entitled to receive any greater amount pursuant to
such subsections than the transferor Bank would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Bank to such Participant had no such transfer occurred.

 

(c)           Each Bank may, from time to time,
with the consent of the Company and the Administrative Agent (which shall not
be unreasonably withheld and which consent shall not be required after Default
or for assignments from a Bank to another Bank or an affiliate of a Bank),
assign to other lenders (“Assignees”) part of the Indebtedness evidenced
by the Notes then held by that Bank, together with an equivalent proportion of
its Commitment and Available Commitment and its obligation to purchase a
participation interest in any Acceptance, pursuant to written agreements
executed by such assigning Bank, such Assignee(s), the Company and the
Administrative Agent in substantially the form of Exhibit T, which
agreements shall specify in each instance the portion of the Indebtedness evidenced
by the Notes which is to be assigned to each Assignee and the portion of the
Commitments, Available Commitments and obligations to purchase participation
interests in any Acceptance of such Bank to be assumed by each Assignee (each,
an “Assignment Agreement”); provided, however, that (i) each
such assignment shall be a 

 

79

 

constant, and not a
varying, percentage of the assigning Bank’s rights and obligations under this
Agreement and the assignment shall cover the same percentage of such Bank’s
Commitment, Available Commitment, obligations to purchase participation
interests in any Acceptances, Loans and Notes, (ii) unless the
Administrative Agent otherwise consents, the amount of the Commitment of the
assigning Bank being assigned pursuant to each such assignment, and the amount
of the Commitment (if any) retained by the assigning Bank (determined in each
case as of the effective date of the relevant Assignment Agreement), shall each
in no event be less than $5,000,000, (iii) the amount of Commitment
assigned to each Assignee (determined in each case as of the effective date of
the relevant Assignment Agreement) shall be an integral multiple of  $1,000,000 and (iv) the assigning
Bank must pay to the Administrative Agent a processing and recordation fee of
$3,500 and any out-of-pocket attorney’s fees or other expenses incurred by the
Administrative Agent in connection with such Assignment Agreement.  Upon the execution of each Assignment
Agreement by the assigning Bank, the relevant Assignee, the Company and the
Administrative Agent, payment to the assigning Bank by such Assignee of the
purchase price for the portion of the indebtedness of the Borrowers being
acquired by it and receipt by the Company of a copy of the relevant Assignment
Agreement, (x) such Assignee lender shall thereupon become a “Bank” for
all purposes of this Agreement with a Commitment and an Available Commitment in
the amount set forth in such Assignment Agreement and obligation to purchase
participation interests in any Acceptance in the amount set forth in such
Assignment Agreement and with all the rights, powers and obligations afforded a
Bank under this Agreement, (ii) such assigning Bank shall have no further
liability for funding the portion of its Commitment assumed by such Assignee
and (iii) the address for notices to such Assignee shall be as specified
in the Assignment Agreement executed by it. 
Concurrently with the execution and delivery of each Assignment
Agreement, each of the Companies shall execute and deliver a Revolving Note to
the Assignee in the amount of its respective Commitment and a Bid Loan Note to
the Assignee in an amount equal to the Total Commitments, and a new Revolving
Note to the assigning Bank in the amount of its Commitment after giving effect
to the reduction occasioned by such assignment, all such Notes to constitute “Notes”
for all purposes of this Agreement and of the other Loan Documents.

 

(d)           The Companies shall not be liable for
any costs incurred by the Banks in effecting any participation or assignment
under subparagraphs (b) or (c) of this subsection.

 

(e)           If any interest in any Loan Document
is transferred to any Assignee which is not organized under the laws of the
United States or any State thereof, the transferor Bank shall cause such
Assignee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 2.22(iv).

 

(f)            Each Bank may disclose to any
Assignee or Participant and (with the prior consent of the Company, which will
not be unreasonably withheld) to any prospective Assignee or Participant any
and all financial information in such Bank’s possession concerning the Company
or any of its Subsidiaries which has been delivered to such Bank by or on
behalf of the Company or any of its Subsidiaries pursuant to this Agreement or
which has been delivered to such Bank by or on behalf of the Company or any of
its Subsidiaries in connection with such Bank’s credit evaluation of the
Company or any of its Subsidiaries prior to entering into this Agreement.

 

80

 

 

9.10.  Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.

 

9.11.  GOVERNING LAW.  THE LOAN DOCUMENTS, INCLUDING, BUT NOT
LIMITED TO, THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES THERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO
CONFLICTS OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE
UNITED STATES APPLICABLE TO NATIONAL BANKS.

 

9.12.  Setoff.  In addition to any rights or remedies
provided by law, or any other rights or remedies provided for in the Loan
Documents, upon the occurrence of any Event of Default, the Banks are hereby
irrevocably authorized, at any time and from time to time without prior notice
to any of the Companies, any such notice being expressly waived by the
Companies, to set off, appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct
or indirect or contingent or matured or unmatured, at any time held or owing by
the Banks to or for the credit or the account of any of the Companies, or any
part thereof, in such amounts as the Bank may elect, against and on account of
the obligations and liabilities of any of the Companies to the Banks hereunder
or under the Notes or with respect to any Acceptances or Bid Banker’s
Acceptances and claims of every nature and description of the Banks against any
of the Companies, whether arising hereunder, under any Note or with respect to
any Acceptances or Bid Banker’s Acceptances or otherwise, as the Banks may
elect, whether or not the Banks have made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured.  Any amount realized by a Bank upon the
exercise of a right of setoff, whether hereunder or otherwise, against the
Companies, shall be shared with the other Banks as provided in subsection 9.13.

 

9.13.  Adjustments; Setoff.  If any Bank (a “benefitted Bank”)
shall at any time receive any payment of all or part of its Outstandings, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, pursuant to events or proceedings of
the nature referred to in paragraph (g) of subsection 7.1 hereof, or
otherwise) in a greater proportion than any such payment to and collateral
received by any other Bank, if any, in respect of such other Bank’s
Outstandings, or interest thereon, such benefitted Bank shall purchase for cash
from the other Banks such portion of each such other Bank’s Outstandings, or
shall provide such other Banks with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such benefitted Bank to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Banks; provided, however, that if all or any portion of
such excess payment or benefits is thereafter recovered from such benefitted
Bank, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery but without interest.  The Companies agree that each Bank so
purchasing a portion of another Bank’s Outstandings may exercise all rights of
payment (including, without limitation, rights of setoff) with respect to such
portion as fully as if such Bank were the direct holder of such portion.

 

81

 

9.14.  Limitation on Liability of Subsidiaries.

 

(a)  Each of the
Banks and the Administrative Agent hereby unconditionally and irrevocably
agrees that, anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum aggregate liability of each Restricted Subsidiary
of the Company hereunder and under the other Loan Documents, shall in no event
exceed such Restricted Subsidiary’s Maximum Liability Amount.

 

(b)  Each Restricted
Subsidiary of the Company agrees that the Obligations may at any time and from
time to time exceed the Maximum Liability Amount of such Restricted Subsidiary
or of all of the Restricted Subsidiaries without impairing any Loan Document or
affecting the rights and remedies of the Administrative Agent and the Banks
thereunder.

 

(c)  No payment or
payments made by the Company, any of the Subsidiaries of the Company, any
guarantor or any other Person or received or collected by the Administrative
Agent or any Bank from the Company, any of the Subsidiaries of the Company, any
guarantor or any other Person by virtue of any action or proceeding or any
setoff or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Restricted Subsidiary
of the Company under any Loan Document which shall, notwithstanding any such
payment or payments other than payments made to the Administrative Agent by
such Restricted Subsidiary or payments received or collected by the
Administrative Agent or any Bank from such Restricted Subsidiary, remain liable
for the Obligations up to its Maximum Liability Amount until the Obligations
are paid in full.

 

(d)  The provisions
of this subsection 9.14 shall survive repayment of the Notes and termination of
this Agreement.

 

(e)  Obligations may
be created without notice to the Restricted Subsidiaries, which shall be
jointly and severally liable therefor regardless of their failure to receive
notice thereof.  Each of the Companies
waives any and all defenses, claims and discharges of the Company and the other
Restricted Subsidiaries or any other obligor under this Agreement pertaining to
the Obligations, except the defense of discharge by payment in full.  Without limiting the generality of the
foregoing, none of the Companies will assert, plead or enforce against the
Banks any defense of waiver, release, discharge in bankruptcy, statute of
limitations, res judicata,
statute of frauds, anti-deficiency statute, fraud, usury, illegality or
unenforceability which may be available to any of the other Companies or any
other Person liable in respect of any of the Obligations.  Each of the Companies waives any defense,
claim, act or thing which, but for this provision, may be deemed a legal or
equitable discharge of a surety or guarantor with respect to the Obligations.

 

(f)  If a Restricted
Subsidiary is designated an Unrestricted Subsidiary by the Board of the
Company, the designated Subsidiary shall remain jointly and severally liable
for all Obligations until such time as the Company and the designated
Subsidiary shall have established, to the reasonable satisfaction of the
Administrative Agent, that no Default or Event of Default exists and such
designation does not cause a Default or Event of Default and would not have
caused a Default or Event of Default had it occurred as of the end of the most
recent fiscal quarter.  Assuming
compliance with the preceding sentence, and upon request, the 

 

82

 

Administrative Agent
shall deliver to the designated Subsidiary any instrument reasonably requested
to evidence that such Subsidiary is no longer a Restricted Subsidiary, nor
liable for the Obligations.

 

(g)  By signing (i) this
Agreement, in the case of the initial Restricted Subsidiaries, and (ii) a
Restricted Subsidiary Agreement, in the case of all subsequently-designed
Restricted Subsidiaries, each Restricted Subsidiary agrees:  (x) to be bound by all of the terms and
provisions of this Agreement applicable to Restricted Subsidiaries, (y) that
it is liable, jointly and severally, with the Company and all other Restricted
Subsidiaries for the payment when due of all Notes and other Obligations under
this Agreement, and (z) that the Administrative Agent or a Bank can
enforce such Obligations against such Restricted Subsidiary, in each case
subject to the limitation contained in subsection 9.14(a) above and only
until such time as that Restricted Subsidiary has been designated an
Unrestricted Subsidiary and satisfied the conditions described in subsection
9.14(f) above.

 

9.15.  Financial Data.  All financial data submitted pursuant to this
Agreement shall be prepared in accordance with GAAP consistently applied
through all accounting periods (except as approved by the Company’s accountants
and disclosed simultaneously with the submission of such financial data).

 

9.16.  Severability.  Any provision of this Agreement which is
prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof.

 

9.17.  Headings.  Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.

 

9.18.  Banks’ Representations.  Each Bank represents to the Administrative
Agent, the Agent and the Company that Bank is acquiring its Notes,
participation interests in Acceptances and Bid Banker’s Acceptances for its own
account for the purpose of investment and not with a view to selling the same
in connection with any distribution thereof, provided that the disposition of
each Bank’s own property shall at all times be and remain within its control.

 

9.19.        USA Patriot Act.  Each Bank and the Administrative Agent (on
behalf of itself as Administrative Agent and a Bank but not on behalf of the other
Banks) hereby notify the Companies that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law on October 26,
2001)) (the “Act”), it is required to obtain, verify and record information
that identifies each borrower, which information includes the name and address
of each borrower and other information that will allow such Bank or the
Administrative Agent, as applicable, to identify the borrowers in accordance
with the Act.

 

9.20.        Representations and Warranties in
Connection With Extensions of Credit and Conversions of Loans.  Upon requesting any Extension of Credit under
this Agreement, any conversion of a Eurodollar Loan or a Floating Rate to
another interest rate option pursuant to subsection 2.8(a) hereof or the
continuance of a Eurodollar Loan as such pursuant to subsection 

 

83

 

2.8(b) hereof, the
Companies shall thereby be deemed to have represented and warranted to the
Administrative Agent and the Banks that

 

(a)  the
representations and warranties made by the Companies in this Agreement, in any
Loan Document, certificate, financial statement or other statement delivered
hereunder are true as of the date of such request and will remain true upon the
applicable Bid Banker’s Acceptance Creation Date, Borrowing Date, Drawing Date
or conversion date, as the case may be, and after giving effect to such
Extension of Credit or conversion, as the case may be; and

 

84

 

(b)  no
Default or Event of Default exists or will exist as of the date of such
request, the applicable Bid Banker’s Acceptance Date, Borrowing Date, Drawing
Date, or conversion date, as the case may be, or after giving effect to such
Extension of Credit or conversion, as the case may be.

 

[THE REMAINDER OF
THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

85

 

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

 

 

	
   

  	
   

  	
  QUAD/GRAPHICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John C. Fowler

  
	
   

  	
   

  	
  Name:

  	
  John C. Fowler

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President
  of Finance and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  QUAD/TECH, INC.,
  DUPLAINVILLE TRANSPORT, INC., QUAD/CREATIVE, LLC,., QUAD/WEST, INC., THE QUAD
  TECHNOLOGY GROUP, INC., QUAD/MED, LLC, SILVER SPRING REALTY, INC., P-DIRECT,
  LLC, GRAPHIC SERVICES, INC., CHILD DAY CARE AND LEARNING SERVICES, INC.,
  QUAD/TECH EAST, INC., IMAGING TECHNOLOGY GROUP, INC., GRAPHIC IMAGING
  TECHNOLOGY, LLC, QUAD/AIR, LLC, QUAD GREENFIELD, LLC, QUADSYSTEMS, INC.,
  QUAD/MED MISSOURI, INC., QUAD TRANSPORTATION SERVICES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John C. Fowler

  
	
   

  	
   

  	
  Name:

  	
  John C. Fowler

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  

 

86

 

	
   

  	
   

  	
  CHEMICAL
  RESEARCH/TECHNOLOGY CO.

  
	
   

  	
   

  	
  By:

  	
  Quad/Graphics, Inc.

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John C. Fowler

  
	
   

  	
   

  	
  Name:

  	
  John C. Fowler

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President
  of Finance and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Quad/Creative, LLC

  
	
   

  	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John C. Fowler 

  
	
   

  	
   

  	
  Name:

  	
  John C. Fowler

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Quad/Tech, Inc.

  
	
   

  	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John C. Fowler

  
	
   

  	
   

  	
  Name:

  	
  John C. Fowler

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRAPHIC PREPRESS AND
  IMAGING TECHNOLOGY, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Imaging Technology
  Group, Inc.

  
	
   

  	
   

  	
  Its:

  	
  General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John C. Fowler

  
	
   

  	
   

  	
  Name:

  	
  John C. Fowler

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  

 

87

 

	
   

  	
   

  	
  U.S. BANK NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
  (as Administrative
  Agent and as a Bank)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Karen E. Weathers

  
	
   

  	
   

  	
  Name:

  	
  Karen E. Weathers

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

88

 

	
   

  	
   

  	
  MIZUHO CORPORATE BANK,
  LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert Gallagher

  
	
   

  	
   

  	
  Name:

  	
  Robert Gallagher

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/Kirsten Carver

  
	
   

  	
   

  	
  Name:

  	
  Kirsten Carver

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  M&I
  MARSHALL & ILSLEY BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Donald J.
  Robinson-Gay

  
	
   

  	
   

  	
  Name:

  	
  Donald J. Robinson-Gay

  
	
   

  	
   

  	
  Title:

  	
  Assistant Vice
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James R. Miller

  
	
   

  	
   

  	
  Name:

  	
  James R. Miller

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  JPMORGAN CHASE BANK,
  N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Sabir A. Hashmy

  
	
   

  	
   

  	
  Name:

  	
  Sabir A. Hashmy

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SUNTRUST BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert Bugbee

  
	
   

  	
   

  	
  Name:

  	
  Robert Bugbee

  
	
   

  	
   

  	
  Title:

  	
  Director

  

 

89

 

	
   

  	
   

  	
  THE NORTHERN TRUST
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Roger McDougal

  
	
   

  	
   

  	
  Name:

  	
  Roger McDougal

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

90

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