Document:

Exhibit 10.24

 

EMAIL
CORRESPONDENCE:

 

From:
Ed Anderson

To:
Ivy Council

Sent:
Wed, 6 Dec 2006 5:46 pm

Subject: offer letter

 

Ivy,

 

On
behalf of Citi Trends, Inc. I am pleased to offer you the position of
Senior Vice President of Human Resources. Your projected start date will be January 1,
2007. The terms of your employment are as follows:

 

Your
starting base pay will be $200,000 annually paid $7,692 bi-weekly. Your next
salary review will be in March 2008.

 

Annual
bonus 35% of base salary. Payment of $35,000 in March 2006 and guarantee
of at least $70,000 for 2007 bonus to be paid in March 2008.

 

2,000
stock options (4 yr vesting, 10 yr life) will be granted when you come to work;
additionally, in March 2007 $60,000 of restricted stock (4 yr vesting)
will be granted to you. After 2007, stock will be granted to you commensurate
with your position with the company.

 

Vacation
3 weeks.

 

Relocation:
The company will pay the cost of moving household goods to Savannah. The
company will provide temporary living for up to 6 months. Additionally, the company
will reimburse you the selling commission on the sale of your California
residence at a maximum of 6% of the selling cost with a cap of $100,000. This reimbursement
of selling commission is good for up to 36 months from date of hire. Note that
the company will not gross-up any of these relocation costs that may be taxable
to you.

 

You
will be eligible in accordance with company policy to participate in all
benefit programs including vacation and holiday time, medical, dental,
disability, life and 401k plans. The company reserves the right to terminate benefit
programs at its sole discretion.

 

You
will be an employee at will, meaning you or Citi Trends can terminate your
employment with or without cause. This offer of employment is contingent on
your passing a drug test and criminal background check.

 

We
look forward to having you on the Citi Trends team. It is an exciting time for
our company and you have the skills to help us achieve our potential. 

Sincerely,

Ed Anderson 

Chairman and CEO 

Please email your acceptance back to me.Exhibit 10.25

 

 

CREDIT AGREEMENT

 

Dated as of March 26,
2008

 

among

 

CITI TRENDS, INC.,

as the Borrower,

 

THE SUBSIDIARIES OF THE
BORROWER IDENTIFIED HEREIN,

as the Guarantors

 

and

 

BANK OF AMERICA, N.A.,

as Lender

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I   DEFINITIONS AND ACCOUNTING TERMS

  	
  1

  
	
  1.01

  	
   

  	
  Defined Terms

  	
  1

  
	
  1.02

  	
   

  	
  Other Interpretive Provisions

  	
  15

  
	
  1.03

  	
   

  	
  Accounting Terms

  	
  15

  
	
  1.04

  	
   

  	
  Rounding

  	
  16

  
	
  1.05

  	
   

  	
  Times of Day

  	
  16

  
	
  1.06

  	
   

  	
  Letter of Credit Amounts

  	
  16

  
	
  ARTICLE II

  	
   

  	
  THE COMMITMENT AND CREDIT EXTENSIONS

  	
  16

  
	
  2.01

  	
   

  	
  Revolving Loans

  	
  16

  
	
  2.02

  	
   

  	
  Borrowings and Conversions

  	
  16

  
	
  2.03

  	
   

  	
  Letters of Credit

  	
  17

  
	
  2.04

  	
   

  	
  Prepayments

  	
  21

  
	
  2.05

  	
   

  	
  Termination or Reduction of Revolving Commitment

  	
  22

  
	
  2.06

  	
   

  	
  Repayment of Loans

  	
  22

  
	
  2.07

  	
   

  	
  Interest

  	
  22

  
	
  2.08

  	
   

  	
  Commitment Fee

  	
  22

  
	
  2.9

  	
   

  	
  Computation of Interest and Fees; Retroactive Adjustments of Applicable
  Rate

  	
  23

  
	
  2.10

  	
   

  	
  Evidence of Debt

  	
  23

  
	
  2.11

  	
   

  	
  Payments Generally

  	
  23

  
	
  ARTICLE III

  	
  TAXES, YIELD PROTECTION AND ILLEGALITY

  	
  24

  
	
  3.01

  	
   

  	
  Taxes

  	
  24

  
	
  3.02

  	
   

  	
  Illegality

  	
  25

  
	
  3.03

  	
   

  	
  Inability to Determine Rates

  	
  25

  
	
  3.04

  	
   

  	
  Survival

  	
  25

  
	
  ARTICLE IV

  	
  GUARANTY

  	
  26

  
	
  4.01

  	
   

  	
  The Guaranty

  	
  26

  
	
  4.02

  	
   

  	
  Obligations Unconditional

  	
  26

  
	
  4.03

  	
   

  	
  Reinstatement

  	
  27

  
	
  4.04

  	
   

  	
  Certain Additional Waivers

  	
  27

  
	
  4.05

  	
   

  	
  Remedies

  	
  27

  
	
  4.06

  	
   

  	
  Rights of Contribution

  	
  27

  
	
  4.07

  	
   

  	
  Guarantee of Payment; Continuing Guarantee

  	
  28

  
	
  ARTICLE V

  	
  CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

  	
  28

  
	
  5.01

  	
   

  	
  Conditions of Effectiveness

  	
  28

  
	
  5.02

  	
   

  	
  Conditions to all Credit Extensions

  	
  29

  
	
  ARTICLE VI

  	
  REPRESENTATIONS AND WARRANTIES

  	
  29

  
	
  6.01

  	
   

  	
  Existence, Qualification and Power

  	
  29

  
	
  6.02

  	
   

  	
  Authorization; No Contravention

  	
  29

  
	
  6.03

  	
   

  	
  Governmental Authorization; Other Consents

  	
  30

  
	
  6.04

  	
   

  	
  Binding Effect

  	
  30

  
	
  6.05

  	
   

  	
  Financial Statements; No Material Adverse Effect

  	
  30

  
	
  6.06

  	
   

  	
  Litigation

  	
  30

  
	
  6.07

  	
   

  	
  No Default

  	
  31

  
	
  6.08

  	
   

  	
  Ownership of Property; Liens

  	
  31

  
	
  6.09

  	
   

  	
  Environmental Compliance

  	
  31

  

 

 

	
  6.10

  	
   

  	
  Insurance

  	
  31

  
	
  6.11

  	
   

  	
  Taxes

  	
  32

  
	
  6.12

  	
   

  	
  ERISA Compliance

  	
  32

  
	
  6.13

  	
   

  	
  Subsidiaries

  	
  32

  
	
  6.14

  	
   

  	
  Margin Regulations; Investment Company Act

  	
  32

  
	
  6.15

  	
   

  	
  Disclosure

  	
  33

  
	
  6.16

  	
   

  	
  Compliance with Laws

  	
  33

  
	
  6.17

  	
   

  	
  Intellectual Property; Licenses, Etc.

  	
  33

  
	
  6.18

  	
   

  	
  Solvency

  	
  33

  
	
  6.19

  	
   

  	
  Labor Matters

  	
  33

  
	
  ARTICLE
  VII   AFFIRMATIVE COVENANTS

  	
  33

  
	
  7.01

  	
   

  	
  Financial Statements

  	
  33

  
	
  7.02

  	
   

  	
  Certificates; Other Information

  	
  34

  
	
  7.03

  	
   

  	
  Notices

  	
  35

  
	
  7.04

  	
   

  	
  Payment of Taxes

  	
  35

  
	
  7.05

  	
   

  	
  Preservation of Existence, Etc.

  	
  35

  
	
  7.06

  	
   

  	
  Maintenance of Properties

  	
  36

  
	
  7.07

  	
   

  	
  Maintenance of Insurance

  	
  36

  
	
  7.08

  	
   

  	
  Compliance with Laws

  	
  36

  
	
  7.09

  	
   

  	
  Books and Records

  	
  36

  
	
  7.10

  	
   

  	
  Inspection Rights

  	
  36

  
	
  7.11

  	
   

  	
  Use of Proceeds

  	
  37

  
	
  7.12

  	
   

  	
  Additional Domestic Subsidiaries

  	
  37

  
	
  7.13

  	
   

  	
  Maintenace of Primary Depository Accounts with the Lender

  	
  37

  
	
  ARTICLE
  VIII   NEGATIVE COVENANTS

  	
  37

  
	
  8.01

  	
   

  	
  Liens

  	
  37

  
	
  8.02

  	
   

  	
  Investments

  	
  38

  
	
  8.03

  	
   

  	
  Indebtedness

  	
  39

  
	
  8.04

  	
   

  	
  Fundamental Changes

  	
  39

  
	
  8.05

  	
   

  	
  Dispositions

  	
  39

  
	
  8.06

  	
   

  	
  Restricted Payments

  	
  40

  
	
  8.07

  	
   

  	
  Change in Nature of Business

  	
  40

  
	
  8.08

  	
   

  	
  Transactions with Affiliates and Insiders

  	
  40

  
	
  8.09

  	
   

  	
  Burdensome Agreements

  	
  40

  
	
  8.10

  	
   

  	
  Use of Proceeds

  	
  41

  
	
  8.11

  	
   

  	
  Consolidated Leverage Ratio

  	
  41

  
	
  8.12

  	
   

  	
  Organization Documents; Fiscal Year

  	
  41

  
	
  8.13

  	
   

  	
  Ownership of Subsidiaries

  	
  41

  
	
  8.14

  	
   

  	
  Sale Leasebacks

  	
  41

  
	
  ARTICLE IX    EVENTS OF DEFAULT AND REMEDIES

  	
  41

  
	
  9.01

  	
   

  	
  Events of Default

  	
  41

  
	
  9.02

  	
   

  	
  Remedies Upon Event of Default

  	
  43

  
	
  9.03

  	
   

  	
  Application of Funds

  	
  44

  
	
  ARTICLE
  X      MISCELLANEOUS

  	
  44

  
	
  10.01

  	
   

  	
  Amendments, Etc.

  	
  44

  
	
  10.02

  	
   

  	
  Notices; Effectiveness; Electronic Communications

  	
  44

  

 

 

	
  10.03

  	
   

  	
  No Waiver; Cumulative Remedies;
  Enforcement

  	
  45

  
	
  10.04

  	
   

  	
  Expenses; Indemnity; and Damage
  Waiver

  	
  45

  
	
  10.05

  	
   

  	
  Payments Set Aside

  	
  46

  
	
  10.06

  	
   

  	
  Successors and Assigns

  	
  46

  
	
  10.07

  	
   

  	
  Set-off

  	
  47

  
	
  10.08

  	
   

  	
  Interest Rate Limitation

  	
  47

  
	
  10.09

  	
   

  	
  Counterparts; Integration;
  Effectiveness

  	
  47

  
	
  10.10

  	
   

  	
  Survival of Representations and
  Warranties

  	
  48

  
	
  10.11

  	
   

  	
  Severability

  	
  48

  
	
  10.12

  	
   

  	
  Governing Law; Jurisdiction; Etc.

  	
  48

  
	
  10.13

  	
   

  	
  Waiver of Right to Trial by Jury

  	
  49

  
	
  10.14

  	
   

  	
  No Advisory or Fiduciary
  Responsibility

  	
  49

  
	
  10.15

  	
   

  	
  Electronic Execution of Assignments
  and Certain Other Documents

  	
  49

  
	
  10.16

  	
   

  	
  USA PATRIOT Act

  	
  50

  

 

 

CREDIT AGREEMENT

 

This
CREDIT AGREEMENT is entered into as of March 26, 2008 among CITI TRENDS,
INC., a Delaware corporation (the “Borrower”), the Guarantors (defined
herein), and BANK OF AMERICA, N.A. (the “Lender”).

 

The
Borrower has requested that the Lender provide $35 million in credit facilities
for the purposes set forth herein, and the Lender is willing to do so on the
terms and conditions set forth herein.

 

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

 

ARTICLE I

 

DEFINITIONS
AND ACCOUNTING TERMS

 

1.01         Defined Terms.

 

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

 

“Acquisition”, by any Person, means the
acquisition by such Person, in a single transaction or in a series of related
transactions, of either (a) all or any substantial portion of the property
of, or a line of business or division of, another Person or (b) at least a
majority of the Voting Stock of another Person, in each case whether or not
involving a merger or consolidation with such other Person.

 

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

 

“Agreement”
means this Credit Agreement.

 

“Applicable
Period” means the period of the four fiscal quarters most recently ended
for which the Borrower has delivered financial statements pursuant to Section 7.01(a) or
(b).

 

“Applicable
Rate” means the following percentages per annum, based upon the
Consolidated Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Lender pursuant to Section 7.02(b):

 

	
  Pricing

  Tier

  	
   

  	
  Consolidated Leverage

  Ratio

  	
   

  	
  Eurodollar Rate

  Loans

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Commitment

  Fee

  	
   

  
	
  1

  	
   

  	
  <2.25:1.0

  	
   

  	
  1.00

  	
  %

  	
  0.00

  	
  %

  	
  0.15

  	
  %

  
	
  2

  	
   

  	
  >
  2.25:1.0 but < 3.00:1.0

  	
   

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  	
  0.15

  	
  %

  
	
  3

  	
   

  	
  >
  3.00:1.0

  	
   

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  	
  0.15

  	
  %

  

 

Any
increase or decrease in the Applicable Rate resulting from a change in the
Consolidated Leverage Ratio shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant
to Section 7.02(b); provided, however, that if a
Compliance Certificate is not delivered when due in accordance with such
Section, then Pricing Tier 3 shall apply as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered
and shall remain in effect until the date on which such Compliance Certificate
is delivered.  The Applicable Rate in
effect from the Closing Date through the first Business Day immediately
following the 

 

 

date
a Compliance Certificate is required to be delivered pursuant to Section 7.02(b) for
the fiscal quarter ending March 31, 2008 shall be determined based upon
Pricing Tier 3.

 

“Attributable
Indebtedness” means, with respect to any Person on any date, (a) in
respect of any Capital Lease, the capitalized amount thereof that would appear
on a balance sheet of such Person prepared as of such date in accordance with
GAAP, (b) in respect of any Synthetic Lease, the capitalized amount of the
remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP
if such lease were accounted for as a Capital Lease, (c) in respect of any
Securitization Transaction, the outstanding principal amount of such financing,
after taking into account reserve accounts and making appropriate adjustments,
determined by the Lender in its reasonable judgment and (d) in respect of any Sale and Leaseback Transaction, the present
value (discounted in accordance with GAAP at the debt rate implied in the
applicable lease) of the obligations of the lessee for rental payments during
the term of such lease).

 

“Audited
Financial Statements” means the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the fiscal year ended February 3, 2007,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows of the Borrower and its Subsidiaries for such fiscal
year, including the notes thereto.

 

“Availability
Period” means the period from and including the Closing Date to the
earliest of (a) the Maturity Date, (b) the date of termination of the
Revolving Commitment pursuant to Section 2.05 and (c) the date
of termination of the commitment of the Lender to make Loans and L/C Credit
Extensions pursuant to Section 9.02.

 

“Bank of America” means Bank of America, N.A.
and its successors.

 

“Base
Rate” means for any day a fluctuating rate per annum equal to the higher of
(a) the Federal Funds Rate plus 0.50% and (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its “prime rate”.  The “prime rate” is
a rate set by Bank of America based upon various factors including Bank of
America’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. 
Any change in the “prime rate” announced by Bank of America shall take
effect at the opening of business on the day specified in the public
announcement of such change.

 

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

 

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

 

“Borrowing”
means a borrowing consisting of simultaneous Loans of the same Type.

 

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

 

“Capital
Lease” means, as applied to any Person,
any lease of any property by that Person as lessee which, in accordance with
GAAP, is required to be accounted for as a capital lease on the balance sheet
of that Person.

 

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

 

2

 

“Cash Equivalents” means, as at any date, (a) securities issued or directly and fully guaranteed or insured
by the United States or any agency or instrumentality thereof (provided that
the full faith and credit of the United States is pledged in support thereof)
having maturities of not more than twelve months from the date of acquisition, (b) Dollar
denominated time deposits and certificates of deposit of (i) the Lender, (ii) any
domestic commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 or (iii) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Moody’s
is at least P-1 or the equivalent thereof (any such bank being an “Approved
Bank”), in each case with maturities of not more than 270 days from the
date of acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof)
or better by Moody’s and maturing or having an auction date within six months
of the date of acquisition, (d) repurchase agreements entered into by any
Person with a bank or trust company (including the Lender) or recognized
securities dealer having capital and surplus in excess of $500,000,000 for
direct obligations issued by or fully guaranteed by the United States in which such
Person shall have a perfected first priority security interest (subject to no
other Liens) and having, on the date of purchase thereof, a fair market value
of at least 100% of the amount of the repurchase obligations and (e) investments,
classified in accordance with GAAP as current assets, in money market
investment programs registered under the Investment Company Act of 1940 which
are administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).

 

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

 

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

 

(a)           any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934, except that a person or group shall be deemed to have “beneficial
ownership” of all Equity Interests that such person or group has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time (such right, an “option right”)), directly or indirectly, of
twenty five percent (25%) or more of the Equity Interests of the Borrower
entitled to vote for members of the board of directors or equivalent governing
body of the Borrower on a fully diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to any
option right);

 

(b)           during any period of 24 consecutive months, a
majority of the members of the board of directors or other equivalent governing
body of the Borrower cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of such
period, (ii) whose election or nomination to that board or equivalent
governing body was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at
the time of such election or nomination at least a majority of that board or
equivalent governing body (excluding, in the case of both clause

 

3

 

(ii) and clause
(iii), any individual whose initial nomination for, or assumption of office as,
a member of that board or equivalent governing body occurs as a result of an
actual or threatened solicitation of proxies or consents for the election or
removal of one or more directors by any person or group other than a
solicitation for the election of one or more directors by or on behalf of the
board of directors); or

 

(c)           any Person or two or more Persons acting in
concert shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation thereof, will result in
its or their acquisition of the power to exercise, directly or indirectly, a
controlling influence over the management or policies of the Borrower, or
control over the Voting Stock of the Borrower on a fully-diluted basis (and
taking into account all such Voting Stock that such Person or group has the
right to acquire pursuant to any option right) representing twenty five percent
(25%) or more of the combined voting power of such Voting Stock.

 

“Closing
Date” means the date hereof.

 

“Compliance Certificate” means a certificate
substantially in the form of Exhibit 7.02.

 

“Consolidated
EBITDA” means, for any period, for the Borrower and its Subsidiaries on a
consolidated basis, an amount equal to Consolidated Net Income for such period plus
the following to the extent deducted in calculating such Consolidated Net
Income: (a) Consolidated Interest Charges for such period, (b) the
provision for federal, state, local and foreign income taxes payable for such
period, (c) the amount of depreciation and amortization expense for such
period and (d) rent and lease expense for such period.

 

“Consolidated
Funded Indebtedness” means Funded Indebtedness of the Borrower and its
Subsidiaries on a consolidated basis.

 

“Consolidated
Interest Charges” means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (i) all
interest, premium payments, debt discount, fees, charges and related expenses
in connection with borrowed money (including capitalized interest) or in
connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, plus (ii) the
portion of rent expense with respect to such period under Capital Leases that
is treated as interest in accordance with GAAP plus (iii) the
implied interest component of Synthetic Leases with respect to such period.

 

“Consolidated
Leverage Ratio” means, as of any date of determination, the ratio of (a) the
sum of (i) Consolidated Funded Indebtedness as of such date plus (ii) eight
(8) times the rent and lease expense for the Applicable Period to  (b) Consolidated EBITDA for the Applicable Period.

 

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

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto. 
Without limiting the generality of the foregoing, a Person shall be
deemed to be Controlled by another Person if such other Person possesses,
directly or indirectly, power to vote 5% or more of the securities having
ordinary voting power for the election of directors, managing general partners
or the equivalent.

 

4

 

“Credit
Extension” means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.

 

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

 

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

 

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

 

“Disposition”
or “Dispose” means the sale, transfer, license, lease or other
disposition of any property by the Borrower or any Subsidiary, including any
Sale and Leaseback Transaction and any sale, assignment, transfer or other
disposal, with or without recourse, of any notes or accounts receivable or any
rights and claims associated therewith, but excluding (a) the disposition
of inventory in the ordinary course of business; (b) the disposition of
machinery and equipment no longer used or useful in the conduct of business of
the Borrower and its Subsidiaries in the ordinary course of business; (c) the
disposition of property to the Borrower or any Subsidiary; provided,
that if the transferor of such property is a Loan Party then the transferee
thereof must be a Loan Party; (d) the disposition of accounts receivable
in connection with the collection or compromise thereof; (e) licenses,
sublicenses, leases or subleases granted to others not interfering in any
material respect with the business of the Borrower and its Subsidiaries; (f) the
sale or disposition of Cash Equivalents for fair market value; and (g) any
Involuntary Disposition.

 

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

 

“Domestic
Subsidiary” means any Subsidiary that is organized under the laws of any
state of the United States or the District of Columbia.

 

“Environmental
Laws” means any and all federal, state, local, foreign and other applicable
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

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

 

5

 

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

 

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

 

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

 

“ERISA
Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which
constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or Multiemployer
Plan; or (f) the imposition of any liability under Title IV of ERISA,
other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.

 

“Eurodollar
Daily Floating Base Rate” means, for any day with respect to a Eurodollar
Rate Loan, the rate per annum equal to the British Bankers Association LIBOR
Rate (“BBA LIBOR”), as published by Reuters (or other commercially
available source providing quotations of BBA LIBOR as designated by the Lender
from time to time) at approximately 11:00 a.m., London time, two Business
Days prior to such day for Dollar deposits (for delivery on such day) with a
term equivalent to one month.  If such
rate is not available at such time for any reason, then the “Eurodollar Daily
Floating Base Rate” for such day shall be the rate per annum determined by the
Lender to be the rate at which deposits in Dollars for delivery on such day in
same day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted by Bank of America and with a term equivalent to
one month would be offered by Bank of America’s London Branch to major banks in
the London interbank eurodollar market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to such day.

 

“Eurodollar
Rate” means a rate per annum equal to the Eurodollar Daily Floating Base
Rate as adjusted from time to time in the Lender’s sole discretion for reserve
requirements, deposit insurance assessment rates and other regulatory costs.

 

“Eurodollar
Rate Loan” means a Loan that bears interest at a rate based on the
Eurodollar Rate.

 

“Event
of Default” has the meaning specified in Section 9.01.

 

6

 

“Excluded Taxes” means, with respect to the
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) taxes imposed on or measured by
its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the Laws of which such recipient is organized or in
which its principal office is located or, in the case of the Lender, in which
the Lender’s Office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Borrower is located, and (c) any backup withholding tax that is
required by the Internal Revenue Code to be withheld from amounts payable to
the Lender if the Lender has failed to comply with clause (A) of Section 3.01(e)(ii).

 

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

 

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

 

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

 

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

 

(a)           all
obligations for borrowed money, whether current or long-term (including the
Obligations) and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;

 

(b)           all
purchase money indebtedness;

 

(c)           the
principal portion of all obligations under conditional sale or other title
retention agreements relating to property purchased by such Person (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business);

 

(d)           the
maximum amount available to be drawn under letters of credit (including standby
and commercial), bankers’ acceptances, bank guaranties, surety bonds and
similar instruments;

 

(e)           all
obligations in respect of the deferred purchase price of property or services
(other than trade accounts payable in the ordinary course of business and, in
each case, not past due for more than 60 days after the date on which such
trade account payable was created);

 

(f)            the
Attributable Indebtedness of Capital Leases, Sale and Leaseback Transactions,
Synthetic Leases and Securitization Transactions;

 

(g)           all
obligations to purchase, redeem, retire, defease or otherwise make any payment
prior to the Maturity Date in respect of any Equity Interests, valued, in the
case of a 

 

7

 

redeemable
preferred interest, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends;

 

(h)           all Funded Indebtedness of others secured by (or
for which the holder of such Funded Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed;

 

(i)            all
Guarantees with respect to Funded Indebtedness of the types specified in
clauses (a) through (h) above of another Person; and

 

(j)            all
Funded Indebtedness of the types referred to in clauses (a) through (i) above
of any partnership or joint venture (other than a joint venture that is itself
a corporation or limited liability company) in which such Person is a general
partner or joint venturer, except to the extent that Funded Indebtedness is
expressly made non-recourse to such Person.

 

“GAAP”
means generally accepted accounting principles in the United States set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, consistently
applied and as in effect from time to time.

 

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

 

“Guarantee”
means, as to any Person, (a) any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or
services for the purpose of assuring the obligee in respect of such
Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity or level
of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into
for the purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is
assumed by such Person (or any right, contingent or otherwise, of any holder of
such Indebtedness to obtain any such Lien). 
The amount of any Guarantee shall be deemed to be an amount equal to the
stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a
corresponding meaning.

 

“Guarantors”
means each Domestic Subsidiary identified
as a “Guarantor” on the signature pages hereto and each other Person that
joins as a Guarantor pursuant to Section 7.12 or otherwise,
together with their successors and permitted assigns.

 

8

 

“Hazardous
Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum
or petroleum distillates, asbestos or asbestos-containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all
other substances or wastes of any nature regulated pursuant to any
Environmental Law.

 

“Honor
Date” has the meaning set forth in Section 2.03(c).

 

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

 

(a)           all
Funded Indebtedness;

 

(b)           the
Swap Termination Value of any Swap Contract;

 

(c)           all
Guarantees with respect to outstanding Indebtedness of the types specified in
clauses (a) and (b) above of any other Person; and

 

(d)           all
Indebtedness of the types referred to in clauses (a) through (c) above
of any partnership or joint venture (other than a joint venture that is itself
a corporation or limited liability company) in which such Person is a general
partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person.

 

“Indemnified Taxes” means Taxes other than
Excluded Taxes.

 

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

 

“Interim
Financial Statements” means the unaudited consolidated and consolidating
financial statements of the Borrower and its Subsidiaries for the fiscal
quarter ending September 30, 2007, including balance sheets and statements
of income or operations, shareholders’ equity and cash flows.

 

“Internal Revenue Code” means the Internal
Revenue Code of 1986.

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
Equity Interests of another Person, (b) a loan, advance or capital
contribution to, Guarantee or assumption of debt of, or purchase or other
acquisition of any other debt or equity participation or interest in, another
Person, or (c) an Acquisition.  For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or decreases
in the value of such Investment, less the amount of any return of capital of
such Investment.

 

“Involuntary Disposition” means any loss of,
damage to or destruction
of, or any condemnation or other taking for public use of, any property of the Borrower or any Subsidiary.

 

“IRS” means the United States Internal
Revenue Service.

 

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

 

9

 

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

 

“Joinder
Agreement” means a joinder agreement
substantially in the form of Exhibit 7.12 executed and delivered by
a Domestic Subsidiary in accordance with the provisions of Section 7.12.

 

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

 

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

 

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

 

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

 

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

 

“Lender’s
Office” means the Lender’s address and, as appropriate, account as set
forth on Schedule 11.02 or such other address or account as the Lender
may from time to time notify the Borrower.

 

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

 

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

 

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

 

“Letter
of Credit Sublimit” means an amount equal to the lesser of (a) the
Revolving Commitment and (b) $5 million. 
The Letter of Credit Sublimit is part of, and not in addition to, the
Revolving Commitment.

 

“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or
other security interest or preferential arrangement in the nature of a security
interest of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any easement, right of way or other
encumbrance 

 

10

 

on
title to real property, and any financing lease having substantially the same
economic effect as any of the foregoing).

 

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

 

“Loan
Documents” means this Agreement, each Note, each Issuer Document and each
Joinder Agreement.

 

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

 

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

 

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

 

“Material
Domestic Subsidiary” means any Domestic Subsidiary that owns any property
or engages in any business.

 

 “Material Indebtedness” means any
Indebtedness (other than Indebtedness arising under the Loan Documents and
Indebtedness arising under Swap Contracts) having an aggregate principal amount
(including undrawn committed or available amounts and including amounts owing
to all creditors under any combined or syndicated credit arrangement) of more
than the Threshold Amount.

 

“Maturity Date” means March 25, 2009; provided, however, that, in
each case, if such date is not a Business Day, the Maturity Date shall be the
next preceding Business Day.

 

“Moody’s”
means Moody’s Investors Service, Inc. and any successor thereto.

 

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

 

“Note”
has the meaning specified in Section 2.10.

 

“Obligations”
means all advances to, and debts, liabilities, obligations, covenants and
duties of, any Loan Party arising under any Loan Document or otherwise with
respect to any Loan or Letter of Credit, whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due,
now existing or hereafter arising and including interest and fees that accrue
after the commencement by or against any Loan Party or any Affiliate thereof of
any proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed
claims in such proceeding. The foregoing shall also include (a) all
obligations under any Swap Contract between the Borrower or any Subsidiary and
the Lender or Affiliate of the Lender and

 

11

 

(b) all
obligations under any Treasury Management Agreement between the Borrower or any
Subsidiary and the Lender or Affiliate of the Lender.

 

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

 

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

 

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

 

“PBGC” means the Pension Benefit Guaranty
Corporation or any successor thereto.

 

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

 

“Permitted Liens” means, at any time, Liens in
respect of property of the Borrower or any Subsidiary permitted to exist at
such time pursuant to the terms of Section 8.01.

 

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

 

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

 

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

 

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

 

“Request
for Credit Extension” means (a) with respect to a Borrowing,
conversion or continuation of Loans, a Loan Notice, and (b) with respect
to an L/C Credit Extension, a Letter of Credit Application.

 

“Responsible
Officer” means the chief executive officer or chief financial officer of a
Loan Party.  Any document delivered
hereunder that is signed by a Responsible Officer of a Loan Party shall be 

 

12

 

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

 

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

 

“Revolving
Commitment” means the obligation of the Lender to make Revolving Loans to
the Borrower pursuant to Section 2.01 and L/C Credit Extensions for
the account of the Borrower pursuant to Section 2.02 in an
aggregate principal amount at any one time outstanding not to exceed the
Revolving Commitment Amount.

 

“Revolving
Commitment Amount” means the amount of the Revolving Commitment in effect
from time to time.  The amount of the
Revolving Commitment in effect on the Closing Date is $35 million.

 

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

 

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

 

“Sale
and Leaseback Transaction” means, with respect to the Borrower or any
Subsidiary, any arrangement, directly or indirectly, with any Person whereby
the Borrower or such Subsidiary shall sell or transfer any property used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property that it intends to use for
substantially the same purpose or purposes as the property being sold or
transferred.

 

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

 

“Securitization
Transaction” means, with respect to any Person, any financing transaction
or series of financing transactions (including factoring arrangements) pursuant
to which such Person or any Subsidiary of such Person may sell, convey or
otherwise transfer, or grant a security interest in, accounts, payments,
receivables, rights to future lease payments or residuals or similar rights to
payment to a special purpose subsidiary or affiliate of such Person.

 

“Subsidiary”
of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of Voting
Stock is at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. 
Unless otherwise specified, all references herein to a “Subsidiary” or
to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

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

 

13

 

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

 

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

 

“Synthetic
Lease” means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing arrangement
whereby the arrangement is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease or does not otherwise appear
on a balance sheet under GAAP.

 

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

 

“Threshold Amount” means $5 million.

 

“Treasury
Management Agreement” means any agreement governing the provision of
treasury or cash management services, including deposit accounts, overnight
draft, credit or debit cards, funds transfer, automated clearinghouse, zero
balance accounts, returned check concentration, controlled disbursement,
lockbox, account reconciliation and reporting and trade finance services and
other cash management services.

 

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

 

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

 

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

 

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

 

“Voting Stock” means,
with respect to any Person, Equity Interests issued by such Person the holders
of which are ordinarily, in the absence of contingencies, entitled to vote for
the election of directors 

 

14

 

(or persons performing similar functions) of such
Person, even though the right so to vote has been suspended by the happening of
such a contingency.

 

“Wholly Owned Subsidiary”
means any Person 100% of whose Equity Interests are at the time owned by the
Borrower directly or indirectly through other Persons 100% of whose Equity
Interests are at the time owned, directly or indirectly, by the Borrower.

 

1.02         Other Interpretive
Provisions.

 

With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

 

(a)           The
definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include,”
“includes” and “including” shall be deemed to be followed by the
phrase “without limitation.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document
(including any Organization Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person’s successors and assigns, (iii) the words “herein,”
“hereof” and “hereunder,” and words of similar import when used
in any Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references
in a Loan Document to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
the Loan Document in which such references appear, (v) any reference to
any law shall include all statutory and regulatory provisions consolidating,
amending, replacing or interpreting such law and any reference to any law or
regulation shall, unless otherwise specified, refer to such law or regulation
as amended, modified or supplemented from time to time, and (vi) the words
“asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

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

 

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

 

1.03         Accounting Terms.

 

(a)           Generally. 
Except as otherwise specifically prescribed herein, all accounting terms
not specifically or completely defined herein shall be construed in conformity
with, and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP.

 

15

 

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

 

1.04         Rounding.

 

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

 

1.05         Times of Day.

 

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

 

1.06         Letter of Credit Amounts.

 

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

 

ARTICLE II

 

THE COMMITMENT
AND CREDIT EXTENSIONS

 

2.01         Revolving Loans.

 

Subject
to the terms and conditions set forth herein, the Lender agrees to make loans
(each such loan, a “Revolving Loan”) to the Borrower in Dollars from
time to time on any Business Day during the Availability Period; provided,
however, that after giving effect to any Borrowing of Revolving Loans,
the aggregate outstanding principal amount of all Revolving Loans and all L/C
Obligations shall not exceed the Revolving Commitment Amount.  Subject to the other terms and conditions
hereof, the Borrower may borrow under this Section 2.01, prepay
under Section 2.04, and reborrow under this Section 2.01.  Revolving Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.

 

2.02         Borrowings and Conversions.

 

Each
Borrowing and each conversion of Loans from one Type to the other shall be made
upon the Borrower’s irrevocable notice to the Lender, which may be given by
telephone.  Each such notice must be
received by the Lender not later than 11:00 a.m. on the requested date of
such Borrowing or conversion, as applicable. 
Each telephonic notice by the Borrower pursuant to this Section 2.02
must be confirmed 

 

16

 

promptly
by delivery to the Lender of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of the Borrower.  Each Borrowing and each conversion shall be
in a principal amount of $100,000 or a whole multiple of $100,000 in excess
thereof.  Each Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrower is
requesting a Borrowing or a conversion of Loans from one Type to the other, (ii) the
requested date of the Borrowing or conversion, as the case may be (which shall
be a Business Day), (iii) the principal amount of Loans to be borrowed or
converted, and (iv) the Type of Loans to be borrowed or to which existing
Loans are to be converted.  If the
Borrower fails to specify a Type of a Loan in a Loan Notice, then the
applicable Loans shall be made as, or converted to, Eurodollar Rate Loans.  Upon satisfaction of the applicable
conditions set forth in Section 5.02 (and, if such Borrowing is the
initial Credit Extension, Section 5.01), the Lender shall make the
requested Loan available to the Borrower either by (i) crediting the
account of the Borrower on the books of Bank of America with the amount of such
funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Lender by the
Borrower; provided, however, that if, on the date of a Borrowing
of Revolving Loans, there are L/C Borrowings outstanding, then the proceeds of
such Borrowing, first, shall be applied to the payment in full of any such L/C
Borrowings and second, shall be made available to the Borrower as
provided above.

 

2.03         Letters of Credit.

 

(a)           The Letter of Credit Commitment.

 

(i)            Subject
to the terms and conditions set forth herein, the Lender agrees (A) from
time to time on any Business Day during the period from the Closing Date until
the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for
the account of the Borrower or any Subsidiary, and to amend or extend Letters
of Credit previously issued by it, in accordance with subsection (b) below,
and (B) to honor drawings under the Letters of Credit; provided
that after giving effect to any L/C Credit Extension with respect to any Letter
of Credit, (x) the aggregate outstanding principal amount of all Revolving
Loans and all L/C Obligations shall not exceed the Revolving Commitment Amount
and (y) the outstanding principal amount of the L/C Obligations shall not
exceed the Letter of Credit Sublimit. 
Each request by the Borrower for the issuance or amendment of a Letter
of Credit shall be deemed to be a representation by the Borrower that the L/C
Credit Extension so requested complies with the conditions set forth in the
proviso to the preceding sentence. 
Within the foregoing limits, and subject to the terms and conditions
hereof, the Borrower’s ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Borrower may, during the foregoing period,
obtain Letters of Credit to replace Letters of Credit that have expired or that
have been drawn upon and reimbursed.

 

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

 

(A)          subject to Section 2.03(b)(iii), the expiry date of such
requested Letter of Credit would occur more than twelve months after the date
of issuance or last extension;

 

(B)           the expiry date of such requested Letter of
Credit would occur after the Maturity Date;

 

(C)           any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Lender from
issuing such Letter of Credit, or any Law applicable to the Lender or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Lender shall prohibit, or
request that the Lender refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the
Lender 

 

17

 

with
respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the Lender is not otherwise compensated hereunder) not
in effect on the Closing Date, or shall impose upon the Lender any unreimbursed
loss, cost or expense which was not applicable on the Closing Date and which
the Lender in good faith deems material to it;

 

(D)          the issuance of such Letter of Credit would violate one or more
policies of the Lender; and

 

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

 

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

 

(b)           Procedures for Issuance and Amendment of
Letters of Credit; Auto-Extension Letters of Credit.

 

(i)            Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to the Lender in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer
of the Borrower.  Such Letter of Credit
Application must be received by the Lender not later than 11:00 a.m. at
least five (5) Business Days (or such later date and time as the Lender
may agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall specify
in form and detail satisfactory to the Lender: (A) the proposed issuance
date of the requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address
of the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; (G) the purpose and nature of the requested Letter of Credit;
and (H) such other matters as the Lender may require.  In the case of a request for an amendment of
any outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the Lender (A) the Letter of
Credit to be amended; (B) the proposed date of amendment thereof (which
shall be a Business Day); (C) the nature of the proposed amendment; and (D) such
other matters as the Lender may require. 
Additionally, the Borrower shall furnish to the Lender such other
documents and information pertaining to such requested Letter of Credit
issuance or amendment, including any Issuer Documents, as the Lender may
require.

 

                (ii)           Unless one or more applicable conditions contained in Article V
shall not be satisfied on the requested date of issuance or amendment of the
applicable Letter of Credit, then, subject to the terms and conditions hereof,
the Lender shall, on the requested date, issue a Letter of Credit for the
account of the Borrower or the applicable Subsidiary or enter into the applicable
amendment, as the case may be, in each case in accordance with the Lender’s
usual and customary business practices.

 

                (iii)          If the Borrower so requests in any applicable Letter of Credit
Application, the Lender may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension
Letter of Credit”); provided that any such

 

18

 

Auto-Extension
Letter of Credit must permit the Lender to prevent any such extension at least
once in each twelve-month period (commencing with the date of issuance of such
Letter of Credit) by giving prior notice to the beneficiary thereof not later
than a day (the “Non-Extension Notice Date”) in each such twelve-month
period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the Lender, the
Borrower shall not be required to make a specific request to the Lender for any
such extension.  The Lender shall not be
under any obligation to permit the extension of such Letter of Credit if (A) the
Lender has determined that it would have no obligation at such time to issue
such Letter of Credit in its revised form (as extended) under the terms hereof
(by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) one or more of the applicable conditions specified in Section 5.02
is not then satisfied.

 

(iv)          If
the Borrower so requests in any applicable Letter of Credit Application, the
Lender may, in its sole and absolute discretion, agree to issue a Letter of
Credit that permits the automatic reinstatement of all or a portion of the
stated amount thereof after any drawing thereunder (each, an “Auto-Reinstatement
Letter of Credit”).  Unless otherwise
directed by the Lender, the Borrower shall not be required to make a specific
request to the Lender to permit such reinstatement.  If such Auto-Reinstatement Letter of Credit
permits the Lender to decline to reinstate all or any portion of the stated
amount thereof after a drawing thereunder by giving notice of such
non-reinstatement within a specified number of days after such drawing (the “Non-Reinstatement
Deadline”), the Lender shall not be under any obligation to permit such
reinstatement if one or more of the applicable conditions specified in Section 5.02
is not then satisfied (treating such reinstatement as an L/C Credit Extension
for purposes of this clause).

 

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

 

(c)           Drawings and Reimbursements.  Upon
receipt from the beneficiary of any Letter of Credit of any notice of drawing
under such Letter of Credit, the Lender shall notify the Borrower thereof. Not
later than 11:00 a.m. on the date of any payment by the Lender under a
Letter of Credit (each such date, an “Honor Date”), the Borrower shall
reimburse the Lender in an amount equal to the amount of such drawing. If the
Borrower fails to so reimburse the Lender by such time, the Borrower shall be
deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the
Honor Date in an amount equal to the amount of the unreimbursed drawing (the “Unreimbursed
Amount”), without regard to the minimum and multiples specified in Section 2.02
for the principal amount of Base Rate Loans, but subject to the conditions set
forth in Section 5.02 (other than the delivery of a Loan Notice)
and provided that, after giving effect to such Borrowing, the aggregate
outstanding principal amount of all Revolving Loans and all L/C Obligations
shall not exceed the Revolving Commitment Amount. Any notice given by the
Lender pursuant to this Section 2.03(c) may be given by telephone
if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.  With respect to any
Unreimbursed Amount that is not fully refinanced by a Borrowing of Base Rate
Loans because the conditions set forth in Section 5.02 cannot be
satisfied or for any other reason, the Borrower shall be deemed to have
incurred from the Lender an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the Default Rate.

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

The
Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the Lender. 
The Borrower shall be conclusively deemed to have waived any such claim
against the Lender and its correspondents unless such notice is given as
aforesaid.

 

(e)           Role
of Lender.  The Borrower agrees that, in paying any
drawing under a Letter of Credit, the Lender shall not have any responsibility
to obtain any document (other than any sight draft, certificates and documents
expressly required by such Letter of Credit) or to ascertain or inquire as to
the validity or accuracy of any such document or the authority of the Person
executing or delivering any such document. 
The Borrower hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall not,
preclude the Borrower’s pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement.  None of the Lender, any of its Related
Parties nor any correspondent, participant or assignee of the Lender shall be
liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.03(d); provided, however, that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against the Lender, and the Lender may be liable to the Borrower, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the Lender’s willful misconduct or gross negligence or the Lender’s
willful failure to pay under any Letter of Credit after the presentation to it
by the beneficiary of a sight draft and certificate(s) strictly complying
with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the
foregoing, the Lender may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the 

 

20

 

Lender
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason.

 

(f)            Cash
Collateral.  If, as of the Maturity Date, any L/C
Obligation for any reason remains outstanding, the Borrower shall, in each
case, immediately Cash Collateralize the then outstanding principal amount of
all L/C Obligations.  Section 9.02(c) sets
forth certain additional requirements to deliver Cash Collateral hereunder.  For purposes of this Section 2.03
and Section 9.02(c), “Cash Collateralize” means to pledge
and deposit with or deliver to the Lender, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to documentation in form
and substance satisfactory to the Lender. 
Derivatives of such term have corresponding meanings.  The Borrower hereby grants to the Lender a
security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing.  Cash
Collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Bank of America.

 

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

 

(h)           Letter
of Credit Fees; Documentary and Processing Charges.  The
Borrower shall pay to the Lender a Letter of Credit fee (the “Letter of
Credit Fee”) for each Letter of Credit equal to the Applicable Rate for
Eurodollar Rate Loans times the daily amount available to be drawn under
such Letter of Credit.  For purposes of
computing the daily amount available to be drawn under any Letter of Credit,
the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  Letter of Credit Fees shall be (i) due
and payable on the first Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit and on the Maturity Date and (ii) computed on a
quarterly basis in arrears.  If there is
any change in the Applicable Rate during any quarter, the daily amount
available to be drawn under each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect.  Notwithstanding anything to the contrary
contained herein, while any Event of Default exists, all Letter of Credit Fees
shall accrue at the Default Rate.  In
addition, the Borrower shall pay directly to the Lender the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the Lender relating to letters of credit as from time to time in
effect.  Such customary fees and standard
costs and charges are due and payable on demand and are nonrefundable.

 

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

 

(j)            Letters
of Credit Issued for Subsidiaries.  Notwithstanding that a Letter
of Credit issued or outstanding hereunder is in support of any obligations of,
or is for the account of, a Subsidiary, the Borrower shall be obligated to
reimburse the Lender hereunder for any and all drawings under such Letter of
Credit.  The Borrower hereby acknowledges
that the issuance of Letters of Credit for the account of Subsidiaries inures
to the benefit of the Borrower, and that the Borrower’s business derives
substantial benefits from the businesses of such Subsidiaries.

 

2.04         Prepayments.

 

(a)           Voluntary
Prepayments of Loans.  The Borrower may, upon notice from the
Borrower to the Lender, at any time or from time to time voluntarily prepay
Revolving Loans in whole or in part without premium or penalty; provided
that (A) such notice must be received by the Lender not later than 11:00 a.m.
on the date of prepayment; and (B) any such prepayment shall be in a
principal amount of 

 

21

 

$100,000
or a whole multiple of $100,000 in excess thereof (or, if less, the entire
principal amount thereof then outstanding). 
Each such notice shall specify the date and amount of such prepayment
and the Type(s) of Loans to be prepaid. 
If such notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.

 

(b)           Mandatory
Prepayments of Loans.  If for any reason the aggregate outstanding
principal amount of all Revolving Loans and all L/C Obligations at any time
exceeds the Revolving Commitment then in effect, the Borrower shall immediately
prepay Revolving Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess.

 

2.05         Termination or Reduction
of Revolving Commitment.

 

The
Borrower may, upon notice to the Lender, terminate the Revolving Commitment, or
from time to time permanently reduce the Revolving Commitment to an amount not
less than the outstanding principal amount of Revolving Loans and L/C
Obligations; provided that (i) any such notice shall be received by
the Lender not later than 12:00 noon five (5) Business Days prior to the
date of termination or reduction and (ii) any such partial reduction shall
be in an aggregate amount of $5,000,000 or any whole multiple of $1,000,000 in
excess thereof.  All fees accrued with
respect thereto until the effective date of any termination of the Revolving
Commitment shall be paid on the effective date of such termination.

 

2.06         Repayment of Loans.

 

The
Borrower shall repay to the Lender on the Maturity Date the aggregate principal
amount of all Revolving Loans outstanding on such date.

 

2.07         Interest.

 

(a)           Subject
to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the sum of the
Eurodollar Rate plus the Applicable Rate; and (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus
the Applicable Rate.

 

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

 

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

 

2.08         Commitment Fee.

 

The
Borrower shall pay to the Lender a commitment fee equal to the product of (i) the
Applicable Rate times (ii) the actual daily amount by which the
Revolving Commitment exceeds the outstanding principal amount of Revolving
Loans and L/C Obligations. The commitment fee shall accrue at all times during
the Availability Period, including at any time during which one or more of the
conditions in Article V is not met, and shall be due and payable
quarterly in arrears on the last Business Day of each calendar quarter. The
commitment fee shall be calculated quarterly in arrears.

 

22

 

2.9           Computation of Interest
and Fees; Retroactive Adjustments of Applicable Rate.

 

(a)           All
computations of interest for Base Rate Loans when the Base Rate is determined
by Bank of America’s “prime rate” shall be made on the basis of a year of 365
or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more fees or interest, as applicable, being paid than if computed on
the basis of a 365-day year).  Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid, provided that any Loan that is repaid on the same day
on which it is made shall, subject to Section 2.11(a), bear
interest for one day.  Each determination
by the Lender of an interest rate or fee hereunder shall be conclusive and
binding for all purposes, absent manifest error.

 

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

 

2.10         Evidence of Debt.

 

The Credit Extensions shall be evidenced by one or
more accounts or records maintained by the Lender in the ordinary course of
business.  The accounts or records
maintained by the Lender shall be conclusive absent manifest error of the
amount of the Credit Extensions and the interest and payments thereon.  Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the
Obligations.  Upon the request of the
Lender, the Borrower shall execute and deliver to the Lender a promissory note,
which shall evidence the Loans in addition to such accounts or records.  Such promissory note shall be in the form of Exhibit 2.10
(a “Note”).  The Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable),
amount and maturity of its Loans and payments with respect thereto.

 

2.11         Payments Generally.

 

(a)           General.  All
payments to be made by the Borrower shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided
herein, all payments by the Borrower hereunder shall be made to the Lender at
the Lender’s Office in Dollars and in immediately available funds not later
than 2:00 p.m. on the date specified herein.  All payments received by the Lender after
2:00 p.m. shall be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected on
computing interest or fees, as the case may be.

 

23

 

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

 

ARTICLE III

 

TAXES,
YIELD PROTECTION AND ILLEGALITY

 

3.01         Taxes.

 

(a)           Payments
Free of Taxes – Obligation to Withhold: Payments on Account of Taxes.  Any
and all payments by or on account of any obligation of the Loan Parties hereunder
or under any other Loan Document shall to the extent permitted by applicable
Laws be made free and clear of and without reduction or withholding for any
Taxes. If, however, applicable Laws require the Loan Parties to withhold or
deduct any Tax, such Tax shall be withheld or deducted in accordance with such
Laws as determined by the Loan Parties upon the basis of the information and
documentation to be delivered pursuant to subsection (e) below and, to the
extent that the withholding or deduction is made on account of Indemnified
Taxes or Other Taxes, the sum payable by the Loan Parties shall be increased as
necessary so that after any required withholding or the making of all required
deductions (including deductions applicable to additional sums payable under
this Section) the Lender receives an amount equal to the sum it would have
received had no such withholding or deduction been made.

 

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

 

(c)           Tax
Indemnifications.  Without limiting the provisions of subsection
(a) or (b) above, the Loan Parties shall, and does hereby, indemnify
the Lender, and shall make payment in respect thereof within 10 days after
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) withheld or deducted by the
Loan Parties or paid by the Lender and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. 
A certificate as to the amount of any such payment or liability
delivered to the Borrower by the Lender shall be conclusive absent manifest
error.

 

(d)           Evidence
of Payments.  Upon request by the Lender, after any payment
of Taxes by any Loan Party to a Governmental Authority, as provided in this Section 3.01,
the Borrower shall deliver to the Lender the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of any return required by Law to report such payment or other evidence of such
payment reasonably satisfactory to the Lender.

 

(e)           Status
of Lender: Tax Documentation.

 

(i)            The
Lender shall deliver to the Borrower, at the time or times prescribed by applicable
Laws or when reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable Laws or by the taxing
authorities of any jurisdiction and such other reasonably requested information
as will permit the Borrower to determine (A) whether or not payments made
hereunder or under any other Loan Document are subject to Taxes, (B) if
applicable, the required rate of withholding or deduction, and (C) the
Lender’s entitlement to any available exemption from, or reduction of,
applicable Taxes in 

 

24

 

respect
of all payments to be made to the Lender by the Borrower pursuant to this
Agreement or otherwise to establish the Lender’s status for withholding tax
purposes in the applicable jurisdiction.

 

(ii)           Without
limiting the generality of the foregoing, if the Borrower is a resident for tax
purposes in the United States, the Lender, if it is a “United States person”
within the meaning of Section 7701(a)(30) of the Internal Revenue Code,
shall deliver to the Borrower executed originals of Internal Revenue Service Form W-9
or such other documentation or information prescribed by applicable Laws or
reasonably requested by the Borrower as will enable the Borrower to determine
whether or not the Lender is subject to backup withholding or information
reporting requirements; and

 

(iii)          The
Lender shall promptly (A) notify the Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction, and (B) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of the Lender, and as may be
reasonably necessary (including the re-designation of the Lender’s Office) to
avoid any requirement of applicable Laws of any jurisdiction that the Borrower
make any withholding or deduction for taxes from amounts payable to the Lender.

 

3.02         Illegality.

 

If
the Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for the Lender or the
Lender’s Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, or any
Governmental Authority has imposed material restrictions on the authority of
the Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by the Lender to the Borrower, any
obligation of the Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until the
Lender notifies the Borrower that the circumstances giving rise to such
determination no longer exist.  Upon
receipt of such notice, the Borrower shall, upon demand from the Lender, prepay
or, if applicable, convert all Eurodollar Rate Loans to Base Rate Loans.  Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.

 

3.03         Inability to Determine
Rates.

 

If
the Lender determines that for any reason in connection with any request for a
Borrowing of, or conversion to, a Eurodollar Rate Loan that (a) Dollar
deposits are not being offered to banks in the London interbank eurodollar
market for the applicable amount of such Loan and for a one month interest
period, (b) adequate and reasonable means do not exist for determining the
Eurodollar Daily Floating Base Rate or (c) the Eurodollar Rate does not
adequately and fairly reflect the cost to the Lender of funding such Loan, the
Lender will promptly notify the Borrower. 
Thereafter, the obligation of the Lender to make or maintain Eurodollar
Rate Loans shall be suspended until the Lender revokes such notice.  Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of or conversion to Eurodollar Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans in the amount specified therein.

 

3.04         Survival.

 

All
of the Loan Parties’s obligations under this Article III shall
survive termination of the Revolving Commitment and repayment of all other
Obligations hereunder.

 

25

 

ARTICLE IV

 

GUARANTY

 

4.01         The Guaranty.

 

Each of the Guarantors hereby jointly and severally
guarantees to the Lender and each other holder of the Obligations as
hereinafter provided, as primary obligor and not as surety, the prompt payment
of the Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof.  The Guarantors hereby further agree that if
any of the Obligations are not paid in full when due (whether at stated
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension
or renewal.

 

Notwithstanding any provision to the contrary contained
herein or in any other of the Loan Documents or any other document relating to
the Obligations, the
obligations of each Guarantor under this
Agreement and the other Loan Documents shall not exceed an aggregate
amount equal to the largest amount that would not render such obligations
subject to avoidance under applicable Debtor Relief Laws.

 

4.02         Obligations Unconditional.

 

The obligations of the Guarantors under Section 4.01
are joint and several, absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Loan
Documents or other documents relating to the Obligations, or any substitution,
release, impairment or exchange of any other guarantee of or security for any
of the Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 4.02 that the obligations of
the Guarantors hereunder shall be absolute and unconditional under any and all
circumstances.  Each Guarantor agrees
that such Guarantor shall have no right of subrogation, indemnity, reimbursement
or contribution against the Borrower or any other Guarantor for amounts paid
under this Article IV until such time as the Obligations have been
paid in full and the Revolving Commitment has expired or terminated.  Without limiting the generality of the foregoing,
it is agreed that, to the fullest extent permitted by Law, the occurrence of
any one or more of the following shall not alter or impair the liability of any
Guarantor hereunder, which shall remain absolute and unconditional as described
above:

 

(a)           at any time or from
time to time, without notice to any Guarantor, the time for any performance of
or compliance with any of the Obligations shall be extended, or such
performance or compliance shall be waived;

 

(b)           any of the acts
mentioned in any of the provisions of any of the Loan Documents, or any other
document relating to the Obligations shall be done or omitted;

 

(c)           the maturity of any of
the Obligations shall be accelerated, or any of the Obligations shall be
modified, supplemented or amended in any respect, or any right under any of the
Loan Documents, or any other document relating to the Obligations shall be
waived or any other guarantee of any of the Obligations or any security
therefor shall be released, impaired or exchanged in whole or in part or
otherwise dealt with;

 

26

 

(d)           any Lien granted to, or
in favor of, the Lender or any other holder of the Obligations as security for
any of the Obligations shall fail to attach or be perfected; or

 

(e)           any of the Obligations
shall be determined to be void or voidable (including, without limitation, for
the benefit of any creditor of any Guarantor) or shall be subordinated to the
claims of any Person (including, without limitation, any creditor of any Guarantor).

 

With respect to its obligations hereunder, each
Guarantor hereby expressly waives diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Lender or any
other holder of the Obligations exhaust any right, power or remedy or proceed
against any Person under any of the Loan Documents, or any other document
relating to the Obligations, or against any other Person under any other
guarantee of, or security for, any of the Obligations.

 

4.03         Reinstatement.

 

The obligations of each Guarantor under this Article IV
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Obligations is
rescinded or must be otherwise restored by any holder of any of the
Obligations, whether as a result of any Debtor Relief Law or otherwise, and
each Guarantor agrees that it will indemnify the Lender and each other holder
of the Obligations on demand for all reasonable costs and expenses (including,
without limitation, the
fees, charges and disbursements of counsel)
incurred by the Lender or such holder of the Obligations in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any Debtor Relief Law.

 

4.04         Certain Additional Waivers.

 

Each Guarantor agrees that such Guarantor shall have no
right of recourse to security for the Obligations, except through the exercise
of rights of subrogation pursuant to Section 4.02 and through the
exercise of rights of contribution pursuant to Section 4.06.

 

4.05         Remedies.

 

                The Guarantors agree
that, to the fullest extent permitted by law, as between the Guarantors, on the
one hand, and the Lender and the other holders of the Obligations, on the other
hand, the Obligations may be declared to be forthwith due and payable as
specified in Section 9.02 (and shall be deemed to have become
automatically due and payable in the circumstances specified in Section 9.02)
for purposes of Section 4.01 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or preventing the Obligations
from becoming automatically due and payable) as against any other Person and
that, in the event of such declaration (or the Obligations being deemed to have
become automatically due and payable), the Obligations (whether or not due and
payable by any other Person) shall forthwith become due and payable by the
Guarantors for purposes of Section 4.01.

 

4.06         Rights of Contribution.

 

The Guarantors agree among themselves that, in
connection with payments made hereunder, each Guarantor shall have contribution
rights against the other Guarantors as permitted under applicable law.  Such contribution rights shall be subordinate
and subject in right of payment to the obligations of such Guarantors under the
Loan Documents and no Guarantor shall exercise such rights of contribution
until all Obligations have been paid in full and the Revolving Commitment has
terminated.

 

27

 

4.07         Guarantee of Payment;
Continuing Guarantee.

 

The guarantee in this Article IV is a
guaranty of payment and not of collection, is a continuing guarantee, and shall
apply to all Obligations whenever arising.

 

ARTICLE V

 

CONDITIONS
PRECEDENT TO CREDIT EXTENSIONS

 

5.01         Conditions of
Effectiveness.

 

This
Agreement shall be effective upon satisfaction of the following conditions
precedent:

 

(a)           Loan
Documents.  Receipt by the Lender of executed
counterparts of this Agreement and the other Loan Documents, each properly
executed by a Responsible Officer of the signing Loan Party.

 

(b)           Opinions
of Counsel. Receipt by the
Lender of favorable opinions of legal counsel to the Loan Parties, addressed to
the Lender, dated as of the Closing Date, and in form and substance
satisfactory to the Lender.

 

(c)           Organization
Documents, Resolutions, Etc.  Receipt by the Lender of the following, in
form and substance satisfactory to the Lender:

 

(i)            copies of the Organization Documents of each
Loan Party which shall be (A) in the case of the articles or certificate
of incorporation or formation, certified to
be true and complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its incorporation or
organization, and (B) in all cases, certified by a secretary or assistant
secretary of such Loan Party to be true and correct as of the Closing Date;

 

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

 

(iii)          such documents and certifications as the Lender may reasonably require
to evidence that each Loan Party is duly organized or formed, and is validly
existing, in good standing and qualified to engage in business in its state of
organization or formation and the state of its principal place of business.

 

(d)           Upfront
Fee.  Payment by the Borrower to the Lender of an
upfront fee of $15,000.

 

(e)           Termination
of Existing Revolving Credit Facility.  The Borrower shall have
terminated and repaid in full its existing revolving credit facility with Bank
of America.

 

28

 

5.02         Conditions to all Credit
Extensions.

 

The
obligation of the Lender to honor any Request for Credit Extension is subject
to the following conditions precedent:

 

(a)           The
representations and warranties of each Loan Party contained in Article VI
or any other Loan Document, or which are contained in any document furnished at
any time under or in connection herewith or therewith, shall be true and
correct in all material respects on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date.

 

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

 

(c)           The
Lender shall have received a Request for Credit Extension in accordance with
the requirements hereof.

 

                Each Request for Credit Extension submitted
by the Borrower shall be deemed to be a representation and warranty that the
conditions specified in Sections 5.02(a) and (b) have
been satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

The Loan Parties represent and warrant to the Lender
that:

 

6.01         Existence, Qualification
and Power.

 

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

 

6.02         Authorization; No
Contravention.

 

The
execution, delivery and performance by each Loan Party of each Loan Document to
which such Person is party have been duly authorized by all necessary corporate
or other organizational action, and do not (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under, or require
any payment to be made under (i) any contract, agreement or other
instrument to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or  (ii) any order, injunction, writ or decree
of any Governmental Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law.

 

29

 

6.03         Governmental
Authorization; Other Consents.

 

No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document other than those that have already been obtained and are in full force
and effect.

 

6.04         Binding Effect.

 

Each
Loan Document has been duly executed and delivered by each Loan Party that is
party thereto.  Each Loan Document
constitutes a legal, valid and binding obligation of each Loan Party that is
party thereto, enforceable against each such Loan Party in accordance with its
terms.

 

6.05         Financial Statements; No
Material Adverse Effect.

 

(a)           The
Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results
of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein.

 

(b)           The
Interim Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present the financial condition of
the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby, subject, in the case of clauses (i) and
(ii), to the absence of footnotes and to normal year-end audit adjustments; and
(iii) show all material indebtedness and other liabilities, direct or
contingent, of the Borrower and its Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness.

 

(c)           From
the date of the Audited Financial Statements
to and including the Closing Date, there has been no Disposition or any
Involuntary Disposition of any material part of the business or property of the
Borrower and its Subsidiaries, taken as a whole, and no purchase or other
acquisition by any of them of any business or property (including any Equity
Interests of any other Person) material in relation to the consolidated
financial condition of the Borrower and its Subsidiaries, taken as a whole, in
each case, which is not reflected in the foregoing financial statements or in
the notes thereto and has not otherwise been disclosed in writing to the Lender
on or prior to the Closing Date.

 

(d)           The financial statements delivered pursuant to Section 7.01(a) and
(b) have been prepared in accordance with GAAP (except as may otherwise be
permitted under Section 7.01(a) and (b)) and present
fairly (on the basis disclosed in the footnotes to such financial statements)
the consolidated and, in the case of annual financial statements delivered
pursuant to Section 7.01(a), consolidating, financial condition,
results of operations and cash flows of the Borrower and its Subsidiaries as of
the dates thereof and for the periods covered thereby.

 

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

 

6.06         Litigation.

 

There
are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of the Loan Parties after due and diligent investigation, threatened
or contemplated, at law, in equity, in 

 

30

 

arbitration
or before any Governmental Authority, by or against the Borrower or any
Subsidiary or against any of their properties or revenues that (a) purport
to affect or pertain to this Agreement or any other Loan Document, or any of
the transactions contemplated hereby or (b) could reasonably be expected
to have a Material Adverse Effect.

 

6.07         No Default.

 

                                                No Default has occurred and is continuing.

 

6.08         Ownership of Property;
Liens.

 

Each
of the Borrower and its Subsidiaries has good record and marketable title in
fee simple to, or valid leasehold interests in, all real property necessary or
used in the ordinary conduct of its business, except for such defects in title
as could not reasonably be expected to have a Material Adverse Effect.  The property of the Borrower and its
Subsidiaries is not subject to any Liens other than Permitted Liens.

 

6.09         Environmental Compliance.

 

(a)           The
Borrower and its Subsidiaries conduct in the ordinary course of business a
review of the effect of existing Environmental Laws and claims alleging
potential liability or responsibility for violation of any Environmental Law on
their respective businesses, operations and properties, and as a result thereof
the Loan Parties have reasonably concluded that such Environmental Laws and
claims could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

(b)           None
of the properties currently or formerly owned or operated by the Borrower or
any Subsidiary is listed or proposed for listing on the National Priorities
List under CERCLA or on the CERCLIS or any analogous foreign, state or local
list or is adjacent to any such property; there are no and never have been any
underground or above-ground storage tanks or any surface impoundments, septic
tanks, pits, sumps or lagoons in which Hazardous Materials are being or have
been treated, stored or disposed on any property currently owned or operated by
the Borrower or any Subsidiary or, to the best of the knowledge of the Loan
Parties, on any property formerly owned or operated by the Borrower or any
Subsidiary; there is no asbestos or asbestos-containing material on any
property currently owned or operated by the Borrower or any Subsidiary; and
Hazardous Materials have not been released, discharged or disposed of on any
property currently or formerly owned or operated by the Borrower or any
Subsidiary.

 

(c)           Neither the Borrower nor
any Subsidiary is undertaking, and has not completed, either individually or
together with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any Governmental
Authority or the requirements of any Environmental Law; and all Hazardous
Materials generated, used, treated, handled or stored at, or transported to or
from, any property currently or formerly owned or operated by the Borrower
or any Subsidiary have been disposed of
in a manner not reasonably expected to result in material liability to the
Borrower or any Subsidiary.

 

6.10         Insurance.

 

The
properties of the Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Borrower, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar
properties in localities where the Borrower or the applicable Subsidiary
operates.

 

31

 

6.11         Taxes.

 

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

 

6.12         ERISA Compliance.

 

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

 

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

 

(c)           (i) 
No ERISA Event has occurred or is reasonably expected to occur; (ii) no
Pension Plan has any Unfunded Pension Liability; (iii) no Loan Party or
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) no Loan
Party or any ERISA Affiliate has incurred, or reasonably expects to incur, any
liability (and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Section 4201 or 4243 of
ERISA with respect to a Multiemployer Plan; and (v) no Loan Party or any
ERISA Affiliate has engaged in a transaction that could be subject to Section 4069
or 4212(c) of ERISA.

 

6.13         Subsidiaries.

 

Set
forth on Schedule 6.13 is a complete and accurate list as of the Closing Date of each Subsidiary, together with (i) jurisdiction
of organization and (ii) percentage of outstanding shares of each class
owned (directly or indirectly) by the Borrower or any Subsidiary.  The outstanding Equity Interests of each
Subsidiary are validly issued, fully paid and non-assessable.

 

6.14         Margin Regulations;
Investment Company Act.

 

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

 

32

 

(b)           None
of the Borrower, any Person Controlling the Borrower, or any Subsidiary is or
is required to be registered as an “investment company” under the Investment
Company Act of 1940.

 

6.15         Disclosure.

 

No
report, financial statement, certificate or other information furnished
(whether in writing or orally) by or on behalf of any Loan Party to the Lender
in connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Loan Document (in each
case, as modified or supplemented by other information so furnished) contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that, with respect to projected
financial information, the Loan Parties represent only that such information
was prepared in good faith based upon assumptions believed to be reasonable at
the time.

 

6.16         Compliance with Laws.

 

Each
of the Borrower and each Subsidiary is in compliance with the requirements of
all Laws and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such requirement of
Law or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.

 

6.17         Intellectual Property;
Licenses, Etc.

 

The
Borrower and its Subsidiaries own, or possess the legal right to use, all of
the trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses and other intellectual property rights (collectively, “IP
Rights”) that are reasonably necessary for the operation of their
respective businesses.

 

6.18         Solvency.

 

The Loan Parties are Solvent on a consolidated basis.

 

6.19         Labor Matters.

 

There are no collective bargaining agreements or
Multiemployer Plans covering the employees of the Borrower or any Subsidiary as
of the Closing Date and neither the Borrower nor any Subsidiary has suffered
any strikes, walkouts, work stoppages or other material labor difficulty
in the five years preceding the Closing Date.

 

ARTICLE VII

 

AFFIRMATIVE
COVENANTS

 

                So long as the Revolving Commitment is
outstanding, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding, the Loan Parties
shall and shall cause each Subsidiary to:

 

7.01         Financial Statements.

 

Deliver
to the Lender, in form and detail satisfactory to the Lender:

 

33

 

(a)           as soon as available, but in any event
within ninety days after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal year, and the related consolidated statements of income or
operations, changes in shareholders’ equity and cash flows for such fiscal
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, audited and accompanied by a report and opinion of an independent
certified public accountant of nationally recognized standing reasonably
acceptable to the Lender, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be subject
to any “going concern” or like qualification or exception or any qualification
or exception as to the scope of such audit; and

 

(b)           as
soon as available, but in any event within forty-five days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower, a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, the related consolidated and
consolidating statements of income or operations for such fiscal quarter and
for the portion of the Borrower’s fiscal year then ended, and the related
consolidated and consolidating statements of changes in shareholders’ equity
and cash flows, setting forth in comparative form, as applicable, the figures for
the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail and
certified by a Responsible Officer of the Borrower as fairly presenting the
financial condition, results of operations, shareholders’ equity and cash flows
of the Borrower and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes.

 

As
to any information contained in materials furnished pursuant to Section 7.02(c),
the Borrower shall not be separately required to furnish such information under
clause (a) or (b) above, but the foregoing shall not be in derogation
of the obligation of the Borrower to furnish the information and materials
described in clauses (a) and (b) above at the times specified
therein.

 

7.02         Certificates; Other
Information.

 

Deliver
to the Lender, in form and detail satisfactory to the Lender:

 

(a)           concurrently
with the delivery of the financial statements referred to in Sections 7.01(a) and
(b), a duly completed Compliance Certificate signed by a Responsible
Officer of the Borrower;

 

(b)           at least 30 days prior
to the end of each fiscal year of the Borrower, beginning with the fiscal year
ending December 31, 2008, an annual business plan and budget of the
Borrower and its Subsidiaries containing, among other things, pro forma
financial statements for each quarter of the next fiscal year;

 

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

 

34

 

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

 

(e)           promptly,
and in any event within five Business Days after receipt thereof by the
Borrower or any Subsidiary, copies of each notice or other correspondence
received from the SEC (or comparable agency in any applicable non-U.S.
jurisdiction) concerning any investigation or possible investigation or other
inquiry by such agency regarding financial or other operational results of the
Borrower or any Subsidiary; and

 

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

 

Documents
required to be delivered pursuant to Section 7.01(a) or (b) or
Section 7.02(c) (to the extent any such documents are included
in materials otherwise filed with the SEC) may be delivered electronically and
if so delivered, shall be deemed to have been delivered on the date (i) on
which the Borrower posts such documents, or provides a link thereto on the
Borrower’s website on the Internet at the website address listed on Schedule
10.02; or (ii) on which such documents are posted on the Borrower’s
behalf on an Internet or intranet website, if any, to which the Lender has
access.

 

7.03         Notices.

 

(a)           Promptly
notify the Lender of the occurrence of any Default.

 

(b)           Promptly
notify the Lender of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect.

 

(c)           Promptly
notify the Lender of any material change in accounting policies or financial
reporting practices by the Borrower or any Subsidiary.

 

Each
notice pursuant to this Section 7.03 shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto.

 

7.04         Payment of Taxes

 

Pay
and discharge, as the same shall become due and payable, all its tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by the Borrower or such Subsidiary.

 

7.05         Preservation of Existence,
Etc.

 

(a)           Preserve, renew and maintain in full force and effect
its legal existence under the Laws of the jurisdiction of its organization
except in a transaction permitted by Section 8.04 or 8.05.

 

(b)           Preserve, renew and
maintain in full force and effect its good standing under the Laws of the
jurisdiction of its organization except in a transaction permitted by Section 8.04
or 8.05.

 

35

 

(c)           Take all reasonable action to maintain all rights, privileges, permits,
licenses and franchises necessary or desirable in the normal conduct of its
business, except to the extent that the failure to do so could not reasonably
be expected to have a Material Adverse Effect.

 

(d)           Preserve
or renew all of its IP Rights, the non-preservation of which could reasonably
be expected to have a Material Adverse Effect.

 

7.06         Maintenance of Properties.

 

(a)           Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear excepted.

 

(b)           Make all necessary repairs thereto and renewals and replacements
thereof, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.

 

(c)           Use the standard of care typical in the industry in the operation and
maintenance of its facilities.

 

7.07         Maintenance of Insurance.

 

                Maintain in full force and effect insurance
with financially sound and reputable insurance companies not Affiliates of the
Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable
Subsidiary operates.

 

7.08         Compliance with Laws.

 

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

 

7.09         Books and Records.

 

(a)           Maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of
all financial transactions and matters involving the assets and business of the
Borrower or such Subsidiary, as the case may be.

 

(b)           Maintain such books of record and account in material conformity with
all applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.

 

7.10         Inspection Rights.

 

Permit
representatives and independent contractors of the Lender to visit and inspect
any of its properties, to examine its corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its directors, officers, and independent
public accountants, all at the expense of the Borrower and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Borrower; provided, however,
that when an Event of Default exists the Lender (or any of its

 

36

 

representatives
or independent contractors) may do any of the foregoing at the expense of the
Borrower at any time during normal business hours and without advance notice.

 

7.11         Use of Proceeds.

 

Use
the proceeds of the Credit Extensions to finance short term working capital and
other lawful corporate purposes, provided that in no event shall the
proceeds of the Credit Extensions be used in contravention of any Law or of any
Loan Document.

 

7.12         Additional Domestic
Subsidiaries.

 

Within
thirty (30) days after any Person becomes a Material Domestic Subsidiary, cause
such Person to (i) become a Guarantor by executing and delivering to the
Lender a Joinder Agreement or such other documents as the Lender shall deem
appropriate for such purpose, and (ii) upon the request of the Lender,
deliver to the Lender such Organization Documents, resolutions and favorable
opinions of counsel, all in form, content and scope reasonably satisfactory to
the Lender.

 

7.13         Maintenace of Primary
Depository Accounts with the Lender.

 

Maintain the primary deposit accounts of the
Borrower and its Domestic Subsidiaries with the Lender.

 

ARTICLE VIII

 

NEGATIVE
COVENANTS

 

So long as the Revolving Commitment is outstanding,
any Loan or other Obligation hereunder shall remain unpaid or unsatisfied, or
any Letter of Credit shall remain outstanding, no Loan Party shall, nor shall
it permit any Subsidiary to, directly or indirectly, without the consent of the
Lender:

 

8.01         Liens.

 

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

 

(a)           Liens
pursuant to any Loan Document;

 

(b)           Liens
existing on the date hereof and listed on Schedule 8.01 and any renewals
or extensions thereof, provided that the property covered thereby is not
changed;

 

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

 

(d)           statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed by
law or pursuant to customary reservations or retentions of title arising in the
ordinary course of business, provided that such Liens secure only
amounts not yet due and payable or, if due and payable, are unfiled and no
other action has been taken to enforce the same or are being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established;

 

37

 

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

 

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

 

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

 

(h)           Liens
securing judgments for the payment of money (or appeal or other surety bonds
relating to such judgments) not constituting an Event of Default under Section 9.01(h);

 

(i)            Liens
securing Indebtedness permitted under Section 8.03(d); provided
that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (ii) such Liens attach to
such property concurrently with or within ninety days after the acquisition
thereof;

 

(j)            leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any Subsidiary;

 

(k)           any interest
of title of a lessor under, and Liens arising from UCC financing statements (or
equivalent filings, registrations or agreements in foreign jurisdictions)
relating to, leases permitted by this Agreement;

 

(l)            Liens deemed to
exist in connection with Investments in repurchase agreements permitted under Section 8.02;

 

(m)          normal and customary
rights of setoff upon deposits of cash in favor of banks or other depository
institutions; and

 

(n)           Liens of a collection
bank arising under Section 4-210 of the Uniform Commercial Internal
Revenue Code on items in the course of collection.

 

8.02         Investments.

 

Make
any Investments, except:

 

(a)           Investments
in the form of cash or Cash Equivalents;

 

(b)           Investments existing as of the Closing Date and set
forth in Schedule 8.02;

 

(c)           Investments in any Person that is a Loan Party prior to
giving effect to such Investment;

 

(d)           Investments
by any Foreign Subsidiary in any other Foreign Subsidiary;

 

38

 

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

 

(f)            Guarantees
permitted by Section 8.03; and

 

(g)           Investments of a nature
not contemplated in the foregoing clauses in an amount not to exceed $5 million
in the aggregate at any time outstanding.

 

8.03         Indebtedness.

 

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

 

(a)           Indebtedness
under the Loan Documents;

 

(b)           intercompany Indebtedness permitted under Section 8.02;

 

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

 

(d)           purchase money Indebtedness (including obligations in
respect of Capital Leases or Synthetic Leases) hereafter incurred to finance
the purchase of fixed assets, and renewals, refinancings and extensions
thereof, provided that (i) the aggregate outstanding principal
amount of all such Indebtedness shall not exceed $10 million at any one time
outstanding; and (ii) such Indebtedness when incurred shall not exceed the
purchase price of the asset(s) financed; and

 

(e)           Guarantees with respect to Indebtedness permitted under
this Section 8.03.

 

8.04         Fundamental Changes.

 

Merge,
dissolve, liquidate or consolidate with or into another Person, except that so long as no Default exists or would result
therefrom, (a) the Borrower may merge or consolidate with any of its
Subsidiaries provided that the Borrower is the continuing or surviving Person, (b) any
Subsidiary may merge or consolidate with any other Subsidiary provided that if
a Loan Party is a party to such transaction, the continuing or surviving Person
is a Loan Party, and (c) any
Subsidiary may dissolve, liquidate or wind up its affairs at any time provided
that such dissolution, liquidation or winding up, as applicable, could not have
a Material Adverse Effect.

 

8.05         Dispositions.

 

Make
any Disposition unless (i) the
consideration paid in connection therewith shall be cash or Cash Equivalents
paid contemporaneous with consummation of the transaction and shall be in an
amount not less than the fair market value of the property disposed of, (ii) if
such transaction is a Sale and Leaseback Transaction, such transaction is not
prohibited by the terms of Section 8.15, (iii) such
transaction does not

 

39

 

involve the sale or other disposition of a minority
equity interest in any Subsidiary, (iv) such transaction does not involve
a sale or other disposition of receivables other than receivables owned by or
attributable to other property concurrently being disposed of in a transaction
otherwise permitted under this Section 8.05, and  (v) the aggregate net book value of all of the assets
sold or otherwise disposed of by the Borrower and its Subsidiaries in all such
transactions in any fiscal year of the Borrower shall not exceed $5 million.

 

8.06         Restricted Payments.

 

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

 

(a)           each
Subsidiary may make Restricted Payments to Persons that own Equity Interests in
such Subsidiary, ratably according to their respective holdings of the type of
Equity Interest in respect of which such Restricted Payment is being made; and

 

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

 

8.07         Change in Nature of
Business.

 

Engage
in any material line of business substantially different from those lines of
business conducted by the Borrower and its Subsidiaries on the Closing Date or
any business substantially related or incidental thereto.

 

8.08         Transactions with
Affiliates and Insiders.

 

Enter
into or permit to exist any transaction or
series of transactions with any officer, director or Affiliate of such Person
other than (a) transactions between Loan Parties, (b) intercompany
transactions expressly permitted by Section 8.02, Section 8.03,
Section 8.04, Section 8.05 or Section 8.06,
(c) normal and reasonable compensation and reimbursement of expenses of
officers and directors and (d) except as otherwise specifically limited in
this Agreement, other transactions which are entered into in the ordinary
course of such Person’s business on terms and conditions substantially as
favorable to such Person as would be obtainable by it in a comparable
arms-length transaction with a Person other than an officer, director or
Affiliate.

 

8.09         Burdensome Agreements.

 

Enter
into, or permit to exist, any contract, agreement or other instrument that (a) encumbers
or restricts the ability of any such Person to (i) make Restricted
Payments to any Loan Party, (ii) pay any Indebtedness or other obligation
owed to any Loan Party, (iii) make
loans or advances to any Loan Party,
(iv) transfer any of its property to any Loan
Party, (v) pledge its property
pursuant to the Loan Documents or
any renewals, refinancings, exchanges, refundings or extension thereof or (vi) act as a Loan Party pursuant to the Loan Documents
or any renewals, refinancings, exchanges, refundings or extension thereof,
except (in respect of any of the matters referred to in clauses (i)-(v) above)
for (1) this Agreement and the other Loan
Documents, (2) any document or
instrument governing Indebtedness incurred pursuant to Section 8.03(d),
provided that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith, (3) any
Permitted Lien or any document or instrument governing any Permitted Lien, provided
that any such restriction contained therein relates only to the asset or assets
subject to such Permitted Lien or (4) customary restrictions and
conditions contained in any agreement relating to the sale of any property
permitted under Section 8.05 pending the consummation of such sale,
or (b) requires the grant of any
security in any property for any obligation if such property is given as
security for the Obligations.

 

40

 

8.10         Use of Proceeds.

 

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

 

8.11         Consolidated Leverage
Ratio.

 

Permit
the Consolidated Leverage Ratio as of the end of any fiscal quarter of the
Borrower to be greater than 3.75:1.0.

 

8.12         Organization Documents;
Fiscal Year.

 

(a)           Amend, modify or change
its Organization Documents in a manner adverse to the Lender.

 

(b)           Change its fiscal year.

 

8.13         Ownership of Subsidiaries.

 

Notwithstanding any other provisions of this Agreement
to the contrary, (a) permit any Person (other than the Borrower or any Wholly Owned Subsidiary) to
own any Equity Interests of any Subsidiary, except to qualify directors where
required by applicable law or to satisfy
other requirements of applicable law with respect to the ownership of Equity
Interests of Foreign Subsidiaries, or (b) permit any Subsidiary to
issue or have outstanding any shares of preferred Equity Interests.

 

8.14         Sale Leasebacks.

 

Enter into any Sale and Leaseback Transaction.

 

ARTICLE IX

 

EVENTS OF
DEFAULT AND REMEDIES

 

9.01         Events of Default.

 

Any of the following shall constitute an Event of
Default:

 

(a)           Non-Payment.  Any
Loan Party fails to pay (i) when and as required to be paid herein, any
amount of principal of any Loan or any L/C Obligation, or (ii) within
three days after the same becomes due, any interest on any Loan or on any L/C
Obligation, or any fee due hereunder, or (iii) within five days after the
same becomes due, any other amount payable hereunder or under any other Loan
Document; or

 

(b)           Specific
Covenants.

 

(i)            Any Loan Party fails to perform or observe
any term, covenant or agreement contained in any of Section 7.01 or
7.02 and such failure continues for five days; or

 

41

 

(ii)           Any Loan Party fails to perform or observe any term, covenant or
agreement contained in any of Section 7.03(a), 7.05(a), 7.10,
7.11 or 7.13 or Article VIII; or

 

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

 

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

 

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

 

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

 

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

 

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

 

42

 

third-party
insurance as to which the insurer has been notified of the claim and does not
dispute coverage), or (ii) any one or more non-monetary final judgments
that have, or could reasonably be expected to have a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any
creditor upon such judgment or order, or (B) there is a period of ten
consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or

 

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

 

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

 

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

 

9.02         Remedies Upon Event of
Default.

 

If
any Event of Default occurs and is continuing, the Lender may take any or all
of the following actions:

 

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

 

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

 

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

 

(d)           exercise
all rights and remedies available to it under the Loan Documents;

 

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

 

43

 

9.03         Application of Funds.

 

After the exercise of remedies provided for in Section 9.02
(or after the Loans have automatically become immediately due and payable and
the L/C Obligations have automatically been required to be Cash Collateralized
as set forth in the proviso to Section 9.02), any amounts received
on account of the Obligations shall be applied by the Lender in the order
determined by the Lender.

 

ARTICLE X

MISCELLANEOUS

 

10.01       Amendments, Etc.

 

No
amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by any Loan Party therefrom, shall be
effective unless in writing signed by the Lender and the applicable Loan Party,
and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

 

10.02       Notices; Effectiveness; Electronic Communications.

 

(a)           Notices
Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopier to the address or telecopier number specified for the applicable
Person on Schedule 10.02, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
telephone number specified for the applicable Person on Schedule 10.02.  Notices and other communications sent by hand
or overnight courier service, or mailed by certified or registered mail, shall
be deemed to have been given when received; notices and other communications
sent by telecopier shall be deemed to have been given when sent (except that,
if not given during normal business hours for the recipient, shall be deemed to
have been given at the opening of business on the next business day for the
recipient).  Notices and other communications
delivered through electronic communications to the extent provided in
subsection (b) below, shall be effective as provided in such subsection
(b).

 

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

 

(c)           Change
of Address, Etc.  Each of the Borrower and the Lender may
change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.

 

44

 

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

 

10.03       No Waiver; Cumulative Remedies; Enforcement.

 

No
failure by the Lender to exercise, and no delay by any the Lender in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder  or under
any other Loan Document preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided, and provided under each other Loan Document are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.

 

10.04       Expenses; Indemnity; and Damage Waiver.

 

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

 

(b)           Indemnification
by the Loan Parties.  The Loan Parties shall indemnify the Lender
and its Related Parties (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the fees, charges and
disbursements of any counsel for any Indemnitee), and shall indemnify and hold
harmless each Indemnitee from all fees and time charges and disbursements for
attorneys who may be employees of any Indemnitee, incurred by any Indemnitee or
asserted against any Indemnitee by any third party or by any Loan Party arising
out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties
hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Lender to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any
actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by a Loan Party or any of its Subsidiaries, or any
Environmental Liability related in any way to a Loan Party or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the 

 

45

 

foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by any Loan Party, and regardless of whether any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnitee or (y) result from a claim
brought by the any Loan Party against an Indemnitee for breach in bad faith of
such Indemnitee’s obligations hereunder or under any other Loan Document, if
such Loan Party has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction.

 

(c)           Waiver
of Consequential Damages, Etc.  To the fullest extent permitted by applicable
law, no Loan Party shall assert, and each Loan Party hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or
the use of the proceeds thereof.  No
Indemnitee shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed to such unintended
recipients by such Indemnitee through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby other than
for direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

 

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

 

(e)           Survival.  The
agreements in this Section shall survive the termination of the Revolving
Commitment and the repayment, satisfaction or discharge of all the other
Obligations.

 

10.05       Payments Set Aside.

 

To
the extent that any payment by or on behalf of any Loan Party is made to the
Lender, or the Lender exercises its right of setoff, and such payment or the
proceeds of such setoff or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such setoff had not occurred

 

10.06       Successors and Assigns.

 

(a)           The
provisions of this Agreement and the other Loan Documents shall be binding upon
and inure to the benefit of the parties hereto and thereto and their respective
successors and assigns permitted hereby, except that the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder or
thereunder without the prior written consent of the Lender.

 

(b)           The
Lender may at any time assign, or sell participations in, all or a portion of
its rights and obligations under this Agreement and the other Loan Documents to
any Person without the consent of the Borrower. 
The Borrower agrees that each Person acquiring a participation shall (x) be
entitled to the benefits of Sections 3.01  to
the same extent as if it were the Lender and had acquired its interest by 

 

46

 

assignment
and (y) to the extent permitted by Law, each Participant also shall be
entitled to the benefits of Section 10.08  as
though it were the Lender

 

(c)           Certain
Pledges.  The Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under the Note) to secure obligations of the Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release the Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for the Lender
as a party hereto.

 

10.07       Set-off.

 

If
an Event of Default shall have occurred and be continuing, the Lender and each
of its Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by the Lender or any such Affiliate to or for the
credit or the account of any Loan Party against any and all of the obligations
of such Loan Party now or hereafter existing under this Agreement or any other
Loan Document to the Lender, irrespective of whether or not the Lender shall
have made any demand under this Agreement or any other Loan Document and
although such obligations of such Loan Party may be contingent or unmatured or
are owed to a branch or office of the Lender different from the branch or
office holding such deposit or obligated on such indebtedness.  The rights of the Lender and its Affiliates
under this Section are in addition to other rights and remedies (including
other rights of setoff) that the Lender or its Affiliates may have.  The Lender agrees to notify the Borrower
promptly after any such setoff and application, provided that the
failure to give such notice shall not affect the validity of such setoff and
application.

 

10.08       Interest Rate Limitation.

 

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

 

10.09       Counterparts; Integration; Effectiveness.

 

This
Agreement may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof.  Except as provided in Section 5.01,
this Agreement shall become effective when it shall have been executed by the
Lender and when the Lender shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.  Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or other electronic imaging means shall
be effective as delivery of a manually executed counterpart of this Agreement.

 

47

 

10.10       Survival of Representations and Warranties.

 

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

 

10.11       Severability.

 

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

 

10.12       Governing Law; Jurisdiction; Etc.

 

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

 

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

 

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

 

48

 

IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.

 

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

 

10.13       Waiver of Right to Trial by Jury.

 

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

 

10.14       No Advisory or Fiduciary Responsibility.

 

In
connection with all aspects of each transaction contemplated hereby (including
in connection with any amendment, waiver or other modification hereof or of any
other Loan Document), each of the Loan Parties acknowledges and agrees, and acknowledges its Affiliates’
understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Lender are arm’s-length commercial
transactions between the Loan Parties and their respective Affiliates, on the one hand, and the Lender, on
the other hand, (B) each of
the Loan Parties has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (C) each of the Loan
Parties is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Lender is and has been acting solely as a
principal and, except as expressly agreed in writing by the relevant parties, has
not been, is not, and will not be acting as an advisor, agent or fiduciary for
the Loan Parties or any of their
respective Affiliates, or any other Person and (B) the Lender has
no obligation to the Loan Parties or any of their respective Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and (iii) the Lender and its Affiliates may be
engaged in a broad range of transactions that involve interests that differ
from those of the Loan Parties and their
respective Affiliates, and Lender has no obligation to disclose any of
such interests to the Loan Parties and their
respective Affiliates.  To the
fullest extent permitted by Law, each
of  the Loan Parties hereby waives
and releases any claims that it may have against the Lender with respect to any
breach or alleged breach of agency or fiduciary duty in connection with any
aspect of any transaction contemplated hereby.

 

10.15       Electronic Execution of Assignments and Certain
Other Documents.

 

The words “execution,” “signed,” “signature,” and words of like import
in any Assignment and Assumption or in any amendment or other modification
hereof (including waivers and consents) shall be 

 

49

 

deemed
to include electronic signatures or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as
a manually executed signature or the use of a paper-based recordkeeping system,
as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.

 

10.16       USA PATRIOT Act.

 

The
Lender hereby notifies the Borrower that pursuant to the requirements of the
USA PATRIOT Act (Title III of Pub.

L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow the Lender to identify the Borrower in accordance
with the Act.  The Borrower shall,
promptly following a request by the Lender provide all documentation and other
information that the Lender requests in order to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering rules and
regulations, including the Act.

 

[SIGNATURE PAGES FOLLOW]

 

50

 

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

 

	
  BORROWER:

  	
  CITI
  TRENDS, INC., a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Bruce Smith

  
	
   

  	
  Name:

  	
  Bruce
  Smith

  
	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  LENDER:

  	
  BANK
  OF AMERICA, N.A.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Stephen Price

  
	
   

  	
  Name:

  	
  Stephen
  Price

  
	
   

  	
  Title:

  	
  Senior
  Vice President

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